ADAMS V OPTIONS UK PERSONAL PENSIONS LLP [2021] EWCA CIV 1188

HEADLINE SUMMARY

The Court of Appeal has held that a Part 36 offer can potentially leave more to be resolved than a contractual offer. 

COMMENTARY

The Court of Appeal accepted that a Part 36 offer was valid despite the terms of the offer not being clear about the way in which the settlement would be effected. Part 36 is a self-contained code and there is no requirement for an offer made under it to have the certainty of a contractual offer. CPR 36.8, which permits the offeree to seek clarification on the offer, confirms that a Part 36 offer can leave matters open to interpretation. There will be instances where a Part 36 offer is so lacking in certainty that it will be invalid, but a valid offer can leave some matters to be clarified, particularly the specifics of payment. Notwithstanding this decision, it is sensible for a party making an offer to ensure that the terms of a Part 36 offer are as detailed and certain as possible.

FACTUAL BACKGROUND

At trial the court found that a pension arrangement between Mr Adams and Options UK Personal Pensions LLP (Options), was unenforceable. The Court of Appeal was required to consider consequential matters including whether Mr Adams had made and 'beaten' a valid Part 36 offer.

It was conceded that Mr Adams' Part 36 offer satisfied the form and content requirements set out in CPR 36.5(1). However, Options' position was that the offer was not valid because, in its view, satisfying the terms of the offer would have resulted in pension funds being put directly into Mr Adams' hands, which Options said was unlawful. Further, the offer was silent as to how exactly payment would be made. In giving judgment Lord Justice Newey highlighted that no concerns on these two points had been raised by Options at the time Mr Adams made the Part 36 offer. The court considered the issues raised by Options but noted that the essence of the offer was the figure which Options was being asked to pay, not the mechanics of payment. The court was satisfied that the offer was valid and was in no doubt that it had been 'beaten'.

KEY LEGAL POINTS

This case serves as a reminder that offerees should carefully consider offers and if there are any queries or doubts as to validity, clarification should be sought under CPR 36.8. The time to do that is the time at which the offer is made, not when the terms of the offer are before the court for consideration on the question of costs.

Where a claimant 'beats' their own Part 36 offer then the court must, unless it considers it unjust to do so, order that the claimant is entitled to the four cost consequences set out in CPR 36.17(4). Only three of the four consequences were awarded to Mr Adams in this case – a useful reminder of the court's discretion in this regard.

Elizabeth Thompson 

SHILL PROPERTIES LTD V BUNCH [2021] EWHC 2142 (CH)

HEADLINE SUMMARY

A judge will assess the evidence, not the pleadings as served, when considering an application for summary judgment.

COMMENTARY

Summary judgment is a useful tool for those seeking a quick decision by a court, on either an entire claim or a particular issue, without the need for a trial. However, the court may only give summary judgment if it considers that the respondent has no real prospect of succeeding on/successfully defending the claim or issue. In addition, the court must consider whether there is a compelling reason why the case or issue should go to trial. 

This is quite a high threshold, and the decision in this case illustrates a further potential obstacle in the way of those seeking summary judgment. The court held, following the Court of Appeal decision of Bhamani v Sattar [2021] EWCA Civ 243 (Bhamani), that the defendant was entitled to rely on a draft defence as evidence in the application. This highlights that the court will be sympathetic to respondents who, based on the evidence, have a real chance of succeeding at trial, even if they haven't formally served a statement of case. It should not be assumed, therefore, that the state of a party's pleadings is the only factor to be taken into account when assessing whether or not a summary judgment application is likely to succeed.  

FACTUAL BACKGROUND

The Claimant (C) and the Defendant (D) entered into a contract for the sale of D's property ("the Contract"), which D failed to complete. C brought proceedings against D seeking specific performance of the Contract in addition to various consequential losses. 

D's defence originally alleged that D lacked capacity to enter into the Contract and that the Contract had been procured by undue influence and/or duress. This defence was later abandoned and, in a draft amendment, D set out a new defence of misrepresentation. However, no formal application to amend D's defence had been made. 

C applied for summary judgment pursuant to CPR 24.2. C argued that, when considering whether D had a real prospect of successfully defending the claim, D could not rely on its draft amended defence. Master Clark dismissed this argument, following Bhamani. Bhamani establishes that when evaluating whether the defence has a real prospect of success, the judge is entitled to look at the evidence irrespective of the state of the pleadings. 

Having decided that D could rely on its draft defence, Master Clark went on to decide that D did have a real prospect of successfully defending the claim, and dismissed the application. 

KEY LEGAL POINTS

C attempted to distinguish Bhamani on the ground that the factual matters on which D was permitted to rely in that case were set out in D's original defence before the proposed amendment. Further, C submitted that the lateness of the new proposed amended defence should preclude D from being able to rely upon it. 

Master Clark rejected this argument. The question under CPR 24.2 is not the state of the pleadings but the position on the evidence. D's evidence resisting the application had been served in accordance with the rules, and C had not opposed its admission. As long as the evidence is before the court, and unless the court can rule out any possibility of a future amendment to the relevant statement of case, it is entitled to examine all the evidence. 

Master Clark added that granting summary judgment deprives a defendant of a trial, and should not be granted unless the court is satisfied that the defendant has no real prospect of success, having considered all the material before it. The evidence being properly before the court, it is wrong in principle to disregard it.

Reuben Gee 

LSREF 3 TIGER FALKIRK LTD I SARL AND ANOTHER V PARAGON BUILDING CONSULTANCY LTD [2021] EWHC 2063 (TCC)

HEADLINE SUMMARY

A £10 million claim sent by email to the defendant's solicitors was invalidly served as the solicitors had not been nominated by the defendant to accept service, nor had they formally stated that they would accept service of claims by email.

COMMENTARY

This decision highlights (i) the importance of compliance with the Civil Procedure Rules (CPR); and (ii) that service of a claim form should not be left to the last minute. It also shows the strict approach that will be taken by the court for failure to comply with the CPR, especially where there has been ample opportunity to do so. 

FACTUAL BACKGROUND

• The defendant's (D) solicitors had a footer to their emails stating that due to the pandemic, all service of documents and correspondence should be made by email only. 
• The claimant's (C) solicitors served the claim form and particulars of claim (Documents) on D's solicitors by email.  
• D pointed out that its solicitors were not authorised to accept service of the Documents on its behalf as D had not given its solicitors express authority to accept service in accordance with CPR 6.7 and CPR PD 6A. D applied for a declaration that the Documents had been invalidly served due to Cs non-compliance with the CPR.
• C applied for an extension of time and permission to serve by alternative means or to dispense with service (pursuant to CPR 6.15 and 6.16) as well as relief from sanctions. 

KEY LEGAL POINTS

Under CPR 6.7 a solicitor must have its client's express authority to accept service. The judge rejected Cs arguments that authority could be implied from a course of conduct and upheld the requirement of express authority.  Without it, solicitors could be exposed to regulatory action or a claim. Notwithstanding the footer in D's solicitors' emails, D had not given its solicitors express authority, nor had D provided its solicitors' address as one where the Documents could be served and had not notified C that it had instructed its solicitors to accept service. Therefore, CPR 6.7(1)(a) and (b) did not apply.

Additionally, C failed to comply with the relevant provisions of PD 6A when serving the claim form by email. Specifically, PD 6A para 4.2 states that "where a party intends to serve a document by electronic means … that party must first ask the party who is to be served whether there are any limitations to the recipient's agreement to accept service by such means…." This requirement was not met as C's solicitors had failed to ask D's solicitors whether there were any such limitations to the email footer e.g. that D had not instructed or provided its solicitors express authority to accept service.

C lost its application and the claim therefore failed altogether. The court did not deem there was good reason to dispense with service or to allow service by alternative means under the CPR. 

Roisin Ryan 

SCIPHARM SARL V MOORFIELDS EYE HOSPITAL NHS FOUNDATION TRUST [2021] EWHC 2079 (COMM)(UNREP)

HEADLINE SUMMARY

Attendance notes of negotiations between an employee of the Defendant (D) and the Claimant's (C) solicitors could be disclosed to D. This is because the notes had been referred to in a witness statement made on behalf of C. 

COMMENTARY

This decision does not change the protections given by the courts to privileged material. But it does underline how important it is to be thoroughly diligent when referencing documents in statements of case and witness evidence. Any direct or implied reference could lead to an unintended waiver of privilege. For future disputes, the decision provides guidance on what is a sufficient reference to a document, which may trigger the right to inspection. It also shows how the courts will exercise their discretion to order disclosure where privileged has been waived. The key issue is whether a document has been "deployed."

FACTUAL BACKGROUND

This dispute involved an allegation by C that D had breached the terms of a pharmaceutical development agreement. C stated that D had breached the terms of the agreement by losing its good manufacturing practice status. One of C's witnesses, Mr Becker had referred in his witness statement to a work-sharing agreement and to conversations between C's solicitor and one of D's employees, Ms Beveridge.

D argued that, although there was no express reference in the witness statement to any document recording them, by mentioning the discussions between C's solicitor and Ms Beveridge there was necessarily an allusion in the witness statement to attendance notes recording these. D applied for disclosure of those notes under CPR 31.14. D argued that it would be unfair for the court to deny disclosure because Ms Beveridge had earlier provided a witness statement on behalf of D, which contradicted the witness statement made on behalf of C.

KEY LEGAL POINTS

The court spent time assessing whether an allusion to a meeting, which would then in the normal course have been recorded in an attendance note, was sufficient to trigger a right to inspect under CPR 31.14. There was no explanation as to how the information about the meeting came to be included in the witness statement. As the conversations had taken place some years ago, it was blatantly implausible for the information about the meeting to have solely come from Mr Becker's memory. On this basis, the court was able to infer the only remaining likely option, which was that the information was based on attendance notes. 

Once the court was satisfied that there must be a note of the meeting it went on to consider whether there should be disclosure of a document (meeting notes) which otherwise would plainly be protected by litigation privilege. The court held that it would be unfair to allow C to rely on the submissions in the witness statement without disclosure of the underlying documents. This was because the content of the witness statement [about what had happened at the meeting] contradicted the witness statement made by Ms Beveridge.

James Cooper 

ROGERSON (T/A COTTESMORE HOTEL, GOLD AND COUNTRY CLUB) V ECO TOP HEAD & POWER LTD [2021] EWHC 1807 (TCC)

HEADLINE SUMMARY

As a condition for being allowed to change its expert witness, the defendant (D) was required to waive privilege in relation to attendance notes in which its first expert (X) expressed an opinion on the case, despite instructing its first expert at the pre-action stage. In this case, the court required D to disclose material which evidenced an opinion which was potentially harmful to its case. 

COMMENTARY

Historically, where a party has applied to change an expert witness who has been instructed to give evidence at trial, the courts have required that party to disclose the previous expert's report. This decision shows that that requirement may extend to experts instructed pre-action, and that materials other than a formal expert report may have to be disclosed. Such orders to disclose are possible because CPR 35.10(4) expressly provides that instructions to an expert to prepare a report and to give evidence at trial are not privileged. 

Although X was instructed pre-action, it was held that it was reasonable for the judge to infer that X was instructed as D's expert in prospective litigation. In coming to this conclusion, the court took into account that;

• Pre-action, D sent litigious correspondence to the claimant (C), and, significantly, had referred to X as its expert;
• During the initial investigation, X took a collaborative approach to working with the other parties' experts; and
• D failed to provide evidence showing that X was not instructed for the purposes of litigation

FACTUAL BACKGROUND

D was engaged as a building contractor installing windows at C's hotel. C alleged that a fire at the hotel was caused by D, either as a result of a discarded cigarette or a spark from an angle grinder. D instructed X as a fire investigator, who then carried out site visits and conducted witness interviews jointly with experts appointed by C and C's insurer. C claimed that X agreed with other experts that the fire was probably started by a cigarette. An attendance note of a subsequent meeting between D and X recorded X's opinions on the source of the fire.

Once proceedings had commenced D sought permission to rely on the expert evidence of a second expert (Y). C argued that D should only be permitted to rely on Y's evidence if D waived privilege in respect of materials relating to X's instruction.  D had claimed that X was not instructed as an expert for litigation, only in respect of its pre-action investigations.

KEY LEGAL POINTS

Parties should be aware that not only written reports fall within CPR 35.10(4), so other documents may need to be disclosed as a condition of changing experts; attendance notes (which may not be a verbatim record of an expert's opinion) may constitute instructions to the expert under that provision. The court did not consider the fact that X had not produced a written report to be a hurdle to the requirement to waive privilege.

Parties should consider the case a warning against using a "behind the scenes expert" publicly. It was held that the X was instructed as an expert under CPR 35, despite being so instructed before any proceedings had commenced. A letter of instruction to a purely advisory expert should therefore make it clear that the expert is not being instructed to give evidence in litigation. There was no such limit on the instructions to the expert in this case, so D was not able to show that the expert's instructions fell outside the scope of CPR 35. 

Erin Broughton