Personal injury litigant found liable for whole expenses of successful first defender partially successful in reducing expenses due

Personal injury litigant found liable for whole expenses of successful first defender partially successful in reducing expenses due

A woman who was found liable for the legal expenses of an insurance company following the settlement of a personal injury claim made to the All-Scotland Sheriff Personal Injury Court has been partially successful in an appeal against the decision to the Sheriff Appeal Court.

Pursuer Mary Young reached a settlement with second defender Axa Insurance UK Plc, which left the sheriff to determine who would pay the expenses of the first defender, Aviva Insurance Ltd, who did not contribute to the settlement amount. She argued that the first defender had not complied with the Personal Injury Pre-Action Protocol and this ought to have been recognised in the sheriff’s decision.

The appeal was heard by Sheriff Principal Nigel Ross. The pursuer was represented by Conway, solicitor, the first defender by Gardiner, advocate, and the second defender by Miller, solicitor.

Blamed each other

The action arose out of a spinal injury suffered by the pursuer while she was in the passenger seat of her sister-in-law’s car when a van collided with the open driver’s side door and caused a sudden jolt. The first defender was the insurer of the van driver and the second defender the insurer of her sister-in-law. After giving no initial response to a claim form dated 14 October 2020, the first defender denied liability in its skeleton defences but later adjusted its defences to blame the pursuer’s sister-in-law for opening the door.

At a pre-trial meeting in May 2022, quantum was agreed. On 6 June 2022, the second defender offered to settle at the full agreed sum. A joint minute was lodged in July 2022 agreeing decree of absolvitor in favour of both defenders, finding the second defender liable in respect of the pursuer’s expenses but reserving the question of the first defender’s expenses.

The sheriff founded on the general rule that the pursuer pays the expenses of the successful defender and reasoned that the pursuer had not vindicated her claim against the first defender. However, he did note that it was unsatisfactory at the least that the first defender had not responded to the initial claim form of October 2020.

It was submitted for the pursuer that the sheriff had failed to recognise the importance of the Personal Injury Protocol and other considerations to avoid unnecessary litigation. Had the first defender blamed the second defender from the outset, the action against the former would not have been avoided because the defenders blamed each other. In these circumstances, the unsuccessful defender ought to have been liable for the other’s expenses.

No principled reason

In his decision, Sheriff Principal Ross began by noting: “On a plain understanding of events, this action was raised because the first defender did not engage with the Protocol. Had they engaged with the Protocol, the parties would have engaged in meaningful communication. The first defender would have investigated the incident. It would have sent a reply within three months, stating whether liability was admitted or denied, and giving reasons, including any alternative version of facts relied upon.”

He continued: “Non-engagement meant an action was raised. Expense started to be incurred. The aims of the Protocol were completely defeated by the first defender. There is no principled reason the first defender should receive any form of contribution towards their expenses for this part of the action.”

On whether the sheriff ought to have reflected this in his decision, Sheriff Principal Ross said: “Once the sheriff was satisfied that Ordinary Cause Rule 3A.3(1)(a) applied (as the post script made plain that he was), he was obliged to consider the remainder of the Rule. The sheriff did not carry out this exercise, but rather noted the parties’ failures without considering consequential sanction, or the Rule 3A.3 procedure. In omitting to do so, he erred. This was an error of law, rather than in exercise of a discretion.”

He went on to say: “There is no principled reason for any award of expenses up to and including the amendment procedure itself. It was only as a result of that procedure that the action was placed back to where it should have been prior to the raising of the initial writ. The award of expenses will be varied to remove the entitlement to expenses prior to the end of the amendment procedure introducing the second defender.”

Addressing expenses following the addition of the second defender, the Sheriff Principal concluded: “The pursuer submitted that the sheriff erred in law in considering that the pursuer should have convened the second defender from the outset. The pursuer also submitted that the sheriff did not consider the correct chronology. In my view that submission does not meet the high test for reducing a discretionary decision.”

Sheriff Principal Ross therefore recalled the sheriff’s interlocutor insofar as reducing the order of expenses in favour of the first defender up to 1 March 2022 and found of new that the pursuer was liable to the first defender for expenses of process from that date onwards.

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