Julie Fisher: Legal expense guidance updated by Sheriff Appeal Court rulings

Julie Fisher: Legal expense guidance updated by Sheriff Appeal Court rulings

Julie Fisher

Two recent decisions of the Sheriff Appeal Court provide further guidance on the approach to awarding legal expenses depending on the outcome in potentially fraudulent claims, writes Julie Fisher.

In James Nelson v John Lewis Plc, the pursuer was on a nightshift, stacking shelves at Waitrose in Edinburgh. He was struck by a ball thrown at him by a colleague. He claimed the ball hitting him on the back of his head had caused deafness in his ear. The court was satisfied there had been a breach of duty of care. There was a history of employees at the store engaging in such “horseplay,” including throwing balls at each other. Complaints had been made and not enough had been done by the defenders to prevent further incidents occurring.

However, the claim failed. The pursuer failed to prove that this very minor head injury had caused his deafness. He had attended his GP two days after the incident, where he complained of having experienced sudden hearing loss two days before the incident. At no stage during appointments or examination did anyone consider the incident had caused the deafness. The timing of the onset of his symptoms of hearing loss was crucial and supported a diagnosis of sudden onset sensorineural hearing loss, which isn’t uncommon and can occur out of the blue.

The defenders sought to recover legal expenses, but the court did not consider the pursuer had made a fraudulent representation or had acted manifestly unreasonably. He had a basis of claim which he genuinely believed. He had just failed to prove his case. The pursuer then appealed, not to overturn the original findings, but to argue for a sum of damages based upon the very minor symptoms complained of due to being struck on the head by the ball. The appeal also failed, no reason to interfere with the original findings having been identified.

Similarly, in Manley v McLeese, the pursuer argued the defender had pulled out of a junction and into her path, striking her vehicle. The defender argued it was the pursuer who crossed the centre line and drove into his vehicle. After a hearing on the evidence, the pursuer was held to be an incredible and unreliable witness. The claim failed and full legal expenses of the action were awarded to the defender, as the sheriff held that the pursuer had been lying.

The pursuer appealed against the decision, seeking to challenge both the decision on the accident and award of legal expenses. The Sheriff Appeal Court considered that the original Sheriff had erred in not considering an expert report prepared for the pursuer, but that her reasoning on the evidence could not be considered “plainly wrong”.

The decision on the merits stood and no damages were awarded. However, it was considered a step too far to award legal expenses to the defender. While the pursuer had been found an unreliable witness, it was not felt she had behaved fraudulently or manifestly unreasonably. It was taken into account that she had obtained a supportive engineering report, even if this wasn’t enough for her case to succeed. So the pursuer was relieved of the obligation to pay the defender’s expenses.

As the body of decisions in this area continues to grow, there is clearer guidance for parties and practitioners alike. The test to establish fraud is one the courts understandably weigh up very seriously, but the protection for a pursuer against paying legal expenses has and will be removed where it is met.

Julie Fisher is a partner at Horwich Farrelly. This article first appeared in The Scotsman.

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