Injured HGV driver allowed to continue claim against employer after Sheriff Appeal Court rules in his favour

About this case:

• Citation:
  [2022] SAC (Civ) 35
• Judgment:
  External link
• Court:
  Sheriff Appeal Court
• Judge:
  Sheriff Principal Turnbull

Thomas Ward was employed by ADR Network, the second defender and respondent, as a driver working in vehicles operated by the first defender, who was not a party to the appeal. He argued that the settlement reached with the first defender did not represent the totality of his claim.

The appeal was heard by Sheriffs Principal Craig Turnbull and Nigel Ross, along with Appeal Sheriff Brian Mohan. Hofford KC appeared for the appellant and Tosh, advocate, for the respondent.

Correct question

Terms of settlement had previously been agreed between the pursuer and the first defender at a Pre-Trial Meeting attended by all parties. The respondent lodged a minute contending that the entire case had been settled by way of compromise, which was opposed by the pursuer. It was agreed by both parties that, under the terms of settlement, the first defender had agreed to pay the pursuer £110,000 net of CRU, and that at an early stage of the meeting counsel for the appellant indicated that in his opinion the full value of the claim was above £360,000.

In reaching his decision the sheriff placed reliance upon the terms of the joint minute entered in to between the appellant and the first defenders, in terms of which they concurred in stating to the court that the action as directed against the first defender had settled extra-judicially. He addressed himself to the question of whether the sum agreed represented satisfaction of the appellant’s claim as pled on record. However, shortly after he issued his note, the Inner House issued its decision in Kidd v Lime Rock Management LLP (2021), in light of which parties agreed that the correct question was different.

It was agreed that the correct question was whether the settlement agreement, when viewed in its surrounding circumstances, indicated that the appellant accepted the sum in full and final satisfaction of all his claims for the harm allegedly done by the negligence, not only against the first defender but also against the respondent. Counsel for the appellant submitted that it did not, as the wording of the settlement was specifically directed against the first defender and there was nothing to justify an inference that the terms represented the full measure of his claim.

Counsel went on to submit that it was for the respondent to establish that the appellant had already been fully indemnified, and settlement at approximately one-third of the valuation was inconsistent with that position. There was no basis in law for the settlement of a claim at one-third of the appellant’s loss, reflecting the chances of success against a first defender and other circumstances, to impose a ceiling on the damages recoverable against the respondent.

Not full value

Delivering the opinion of the court, Sheriff Principal Turnbull began by noting: “In our view, nothing turns on the formulation of the question the sheriff asked himself. He carried out a thorough assessment of the authorities quoted. The sheriff’s reasoning proceeds upon two separate considerations: first, the joint minute as between the appellant and the first defender; and, second, the sum agreed as a compromise.”

He continued: “The sheriff’s conclusion that the paragraph within the joint minute as between the appellant and the first defender that dealt with expenses was ‘a clear agreement to pay the whole expenses of the action, as taxed, not simply the expenses quoad the first defender’ is one we cannot support. On any view (quite understandably) that paragraph did not address the expenses of the respondent. The whole expenses of the action were not, as a matter of fact, provided for.”

Applying the test in Kidd, Sheriff Principal Turnbull said: “The terms of the settlement agreement, viewed in its surrounding context, did not indicate that the appellant accepted the sum in full and final satisfaction of all his claims against both the first defender and the respondent. In finding that the terms of settlement agreed between the appellant and the first defender also disposed of the appellant’s case against the respondent, the sheriff erred.”

He concluded, allowing the appeal: “The fact that the settlement with the first defender was for around one-third of the valuation given to the claim by the appellant in his statement of valuation of claim is, in our view, not neutral. There can be many reasons why a pursuer may elect to accept less than the full amount claimed in settlement. The appellant did not receive the full value of his claim from the first defender. The appellant expressly did not accept the settlement in full satisfaction of his claim. The onus was upon the respondent to establish that the appellant had been fully indemnified. The material before the sheriff was insufficient to discharge that onus.”

The case was thereafter remitted to the sheriff to proceed as accords.