Anthony Reddiford appeared for the Claimant.
The Claimant worked in an old people’s home as a care assistant. Some of the residents of
the home were incontinent and frequently urinated on the floors of the home. In particular,
one corridor in the home was frequently soiled by a particular resident. The Claimant slipped
and fell in a pool of urine on the floor and suffered injury. The Claimant’s case included an
allegation that the floor was not of suitable construction for the purpose for which it was used,
contrary to regulation 12(1) of the Workplace (Health, Safety & Welfare) Regulations 1992,
because it did not provide slip-resistance when wet. The Defendant contended that regulation
12(1) governed only the permanent state of the floor’s construction and a floor could not
become of unsuitable construction simply because it became unsafe due to a transient
spillage upon it.
The Court of Appeal allowed the Claimant’s appeal. It held that, where the
floor is frequently in a state where it is transiently wet, the court should consider whether it is
of unsuitable construction because it does not offer slip-resistance when wet. On the facts of
this case, the floor was frequently wet with urine and the floor surface must, therefore, offer
slip resistance. The Defendant was in breach of the regulation.
On an ancillary point, the judge had declined to consider the Approved Code of Practice to
the Workplace (Health, Safety & Welfare) Regulations 1992 when construing regulation 12(1).
The Court of Appeal held that she was wrong to have done so and the ACOP was relevant to
(but not determinative of) the proper meaning of the regulation.
This is a significant decision which adds scope to the effect of Regulation 12(1). Cases of
spillages on a floor are often pleaded only under regulation 12(3) (duty to clear up spillages),
which is subject to a reasonable practicability defence. Regulation 12(1), which affords no
such defence, has been most used where the permanent state of the floor alone is criticised.
The Court of Appeal’s decision makes it plain that, provided spillages occur with sufficient
frequency, the floor’s susceptibility to become slippery when wet can put the employer in
breach of regulation 12(1).
Work Equipment Regulations – Duty to anticipate accidents
Robb v Salamis (M and I) Limited
House of Lords 13 December 2006
In September 1999 the Claimant had been at work on an oil and gas production platform
when he had attempted to descend from the top of a 2-tier bunk bed via a suspended ladder.
However, the ladder had not been properly engaged within its retaining bracket and it had
therefore fallen to the floor causing injury to the Claimant. At first instance the Judge had
held, on the basis that there was no evidence in respect of previous accidents of this type,
that it was not reasonably foreseeable by the Defendant that the ladder might not be fully
engaged within its brackets. He therefore concluded that although the ladder was “work
equipment” for the purposes of the Provision and Use of Work Equipment Regulations 1998
the ladder was in fact “suitable.” “Suitable” is defined under the regulations to mean “suitable
in any respect which it was reasonably foreseeable would affect the health and safety of any
The House of Lords held that when an employer was assessing risks to which his employees
might be exposed when using work equipment it had to consider not only the skilled and
careful man but also the contingency of carelessness and the frequency with which the
contingency was likely to arise: Hindle v Birtwistle  1 QB 192 and John Summers and
Sons Limited v Frost  AC 740 considered. The employer’s obligation was therefore to
anticipate situations that might give rise to accidents. The employer was not permitted to wait
for accidents to happen. Therefore, the Judge at first instance had misdirected himself.
This decision presents some assistance to the Claimant in cases where a Defendant relies
heavily upon the fact that an accident was the first of its type. The key issues appear to be (a)
the degree of risk that may arise in the event of carelessness and (b) the frequency of the
opportunity for such carelessness to arise. On the facts it appears also to have assisted the
claimant’s case that the ladders could have been made completely safe simply by fixing them
permanently to the bunk beds with screws. It could therefore be said that whereas the risk
may have been small, it would have been cheap and simple to eliminate it completely.
Buildings Regulations – Application
Moon v Garrett
Court of Appeal 28 July 2006
 EWCA Civ 1121
Selena Plowden appeared for the Claimant.
The Defendant, Mr Garrett, was carry out building works at his home. He had cleared a pit of
rubble and he was intending to lay concrete beams over the pit and build a garage. At the
time of the accident, the pit was just over 2m deep, and had a solid floor. The ground around
the pit sloped slightly towards the edge of the pit. The Defendant had erected a fence round
the pit that consisted of orange netting attached to metal stakes.
The Claimant was a delivery driver, who was delivering concrete blocks to the property. He
parked his lorry on the track leading to the property and began to unload the blocks. He was
about 6-10 feet away from the pit. As he was unloading the blocks, some of them became
unstable and fell from the lorry, causing him to step backwards, stumble and fall, and then roll
towards the pit. The netting offered no effective barrier. He fell in and suffered a serious
The Claimant brought his case in negligence/breach of the Occupiers’ Liability Act 1957, and
also under the Construction (Health, Safety and Welfare) Regulations 1996. At first instance,
HHJ Lambert found that the Defendant was negligent and/or in breach of his duty under the
Occupiers’ Liability Act 1957 in failing to foresee the risk that someone might stumble and fall
into the pit and in failing to guard against it by erecting a suitably strong fence around the pit.
He also held that the Construction Regs did not apply.
The Defendant appealed on the issue of negligence/breach of the Occupiers’ Liability Act
1957. The Court of Appeal dismissed his appeal.
However the Court of Appeal went on to consider, obiter, the Claimant’s cross-appeal on the
application of the Construction Regs. The question was whether the Claimant came within
the class of persons to whom a duty was owed. Reg 3(1) provides that “… these Regulations
apply to and in relation to construction work carried out by a person at work.” Reg 6(3), since
revoked, sought to protect “any person [who] is to carry out work at a place from which he is
liable to fall a distance of 2 metres or more…”. The Defendant argued that because the
Claimant was not himself engaged in construction work, he was not entitled to the protection
of the regulations. The Claimant argued that a person involved in any activity arising out of or
in connection with construction work was a person included within the definition of a “person
at work”. The Court of Appeal acknowledged the force of the Claimant’s submission and
expressed the view, obiter, that the Claimant was “a person at work” within Reg 3(1) and
therefore entitled to the protection of the regulations. The Court of Appeal gave, by way of
analogy, the example of a workman who was carrying tea to his fellow employees on a
construction site. Such a workman would also be entitled to the protection of the Regulations.
The case is also noteworthy on the question of costs. The Claimant had also sued his
employer. That claim was dismissed at first instance, with the first defendant being ordered to
pay the employer’s costs (a Sanderson order). The Court of Appeal upheld this costs order.
In doing so, it adopted passages from Irvine v Commissioner of the Police for the Metropolis
 EWCA Civ 129 which set out the relevant considerations, although it came to a
different result to the Court of Appeal in Irvine (which had ordered that the claimant pay the
costs of the successful defendants). In Moon the Court of Appeal said that these passages
demonstrate that there are no hard and fast rules as to when it is appropriate to make a
Sanderson or Bullock order. The question of who should pay whose costs is peculiarly one
for the trial judge. In Moon the trial judge had taken into account the manner in which the first
defendant had responded to the claim initially, misrepresenting that he had no insurance and
was a man of straw. The trial judge had also taken into account the fact that the first
defendant had sought to blame the employer. The trial judge concluded that the Claimant
had acted reasonably in joining in his employer and in all the circumstances, it was
appropriate that the first defendant should pay the employer’s costs.
Although obiter, the comments of the Court of Appeal may pave the way for a broader
application of the Building Regulations.
Whilst not relieving a claimant of the need to consider carefully whether or not to sue a
particular defendant, if that decision is a reasonable one then Moon provides some comfort
on costs in the event that the claim only succeeds against some of the defendants.
Asbestos – Pleural Plaques
Rothwell v Chemical & Insulating Co Ltd & Ors
House of Lords 17 October 2007
 UKHL 39
The long awaited decision of the House of Lords on the question of whether pleural plaques
caused by asbestos exposure are actionable, either on their own or when aggregated with the
risk of future disease and consequent anxiety. The House of Lords also considered whether
a different result ensued in the event that a claimant suffered not just anxiety, but a
recognised psychiatric illness in consequence of being told that his pleural plaques indicated
a significant exposure to asbestos and therefore a risk of future disease.
The House of Lords, dismissing the claimants’ appeals, held that:-
(i) Pleural plaques were not damage that could found a cause of action.
(ii) Neither the risk of future disease, nor anxiety about the possibility of that risk
materialising, amounted to damage for the purpose of creating a cause of action.
(iii) Although the law allowed the risk of future disease and consequent anxiety to be
taken into account in computing the loss suffered by someone who had actually
suffered some compensatable physical injury, in the absence of such
compensatable injury, there was no cause of action under which damages could be
claimed and, therefore, there could be no computation of loss in which the risk and
anxiety could be taken into account.
(iv) The pleural plaques did not amount to damage when aggregated with the risk of
future disease or anxiety. It was not possible, by adding together two or more
components, none of which in itself was actionable, to arrive at something that was
(v) The Supreme Court Act 1981 s.32A, which allowed a claimant to obtain provisional
damages where there was a chance that a serious disease would develop in the
future, did not support the aggregation theory. The provision made it clear that it
applied only where the claimant had a cause of action.
(vi) In the appeal where the claimant had developed a recognised psychiatric illness,
the claim failed on the ground that it was not reasonably foreseeable that the
creation of a risk of an asbestos-related disease would cause psychiatric illness to
a person of reasonable fortitude.
An Independent Contractor can owe a Duty of Care to Employees of its Sub-Contractor
Gray v Fire Alarm Fabrication Services and Others
Court of Appeal 10 November 2006
In approximately 2000 Thistle Hotels Limited appointed Humphries as the main contractor for
electrical work to be carried out in its hotel. Humphries subcontracted the installation of a fire
alarm system to Fire Alarm Fabrication Services (“FAFS”). In January 2001 Mr Gray, an
engineer employed by FAFS, fell through a skylight window and sustained fatal injuries. The
Claimant sued FAFS, and they in turn sought a contribution from Humphries and Thistle
The Court held that in certain circumstances both an independent contractor and an occupier
of a building could owe a duty of care to the employee of a subcontractor. Considering both
Ferguson v Welsh  1 WLR 1553 and Makepeace v Evans Brothers (Reading) 
BLR 737 the Court held that where an independent contractor had subcontracted work the
question of whether the independent contractor owed a duty of care to employees of its
subcontractor was one of mixed fact and law. However, it was unnecessary and unhelpful to
formulate any specific test for deciding when such a duty arose. Following Bottomley v
Todmorden Cricket Club  PIQR P275 the facts of each case were to be tested by
applying the range of tests for identifying legal duty of care which the House of Lords had
developed in the years that followed Ferguson v Welsh. On the facts of this case a duty of
care did exist because Humphries had agreed contractually with FAFS to carry out work with
close liaison with Humphries’ contracts manager. Humphries therefore had a right to
supervise the work in order to ensure it was carried out safely. That right imposed on
Humphries a duty of care which extended to the employees of FAFS.
However, on the facts it was found that neither Humphries nor Thistle were in breach of any
duty of care owed to the deceased. Accordingly, it was not necessary to decide whether
Thistle owed a duty of care.
This case will obviously be of significant interest to Defendants. Given the ever expanding
rigours of (for example) the Construction, Design and Management Regulations one is more
likely to find closer control provided for within a chain of contractors and subcontractors. In
some situations the degree of contractual control may give rise to a duty of care as outlined
above. In this situation claims for a contribution may be possible in order to defray the costs
of a claim.
Ashley and Another v Chief Constable of Sussex Police
Court of Appeal 27 July 2006
The claim arose out of the fatal shooting of James Ashley by the Sussex Police on 15
January 1998. The police defended the claim for battery (the shooting) on the basis that the
officer involved was acting in self defence. The question then arose in respect of whether the
burden of proving self defence was on the Claimant or the Defendant. The Court held that
whereas the criminal law had been reformed following the Criminal Law Revision Committee’s
14th Report “Offences against the Person” 1980 in fact the civil law has remained unchanged.
Accordingly, in criminal proceedings the burden of negativing self defence was on the
Prosecution, whereas in civil proceedings the burden was on the Defendant to establish self
defence. In criminal proceedings a Defendant who mistakenly but honestly believed that it
was necessary to act in self defence was entitled to be judged on the basis that his mistaken
belief was true. In civil proceedings, however, his belief had to be both honestly and
reasonably held. The action taken in self defence has to be reasonable in both criminal and
civil proceedings but, in judging what was reasonable, the Court had to have regard to all the
circumstances of the case, including the fact that the action might have to have been taken in
the heat of the moment.
Uninsured Driver – Knowledge – Motor Insurers Bureau
Phillips v Rafiq and Another
Court of Appeal 14 February 2007
The claim emanated from a road traffic accident whereby the Deceased’s widow brought a
claim under the Fatal Accidents Act 1976 following the death of her husband. The Deceased
was killed in a road traffic accident when he knew the driver of the vehicle was not insured.
The Claimant brought a claim against the MIB under the Motor Insurers Bureau (Uninsured
Drivers) Agreement 1999. The MIB resisted the claim on the basis that clause 6 provided an
exception to liability given the state of the Deceased’s knowledge.
The Court observed that the wording of the 1999 agreement differed from that of the 1988
agreement in that the 1988 agreement had excepted the Bureau from liability where the
person suffering death had allowed himself to be carried in an uninsured vehicle whereas the
1999 agreement contains different wording, namely “by a Claimant who, at the time of the use
giving rise to the relevant liability was voluntarily allowing himself to be carried in the vehicle.”
Clearly, in a derivative claim such as a Fatal Accident Act claim the “Claimant” was a person
other than the “person suffering death.” The Court concluded that the crucial differences in
the language introduced by the 1999 agreement showed that the parties to the agreement
had clearly wished to make a different provision. Accordingly, the exception did not apply on
the facts of the case.
This case represents a serious problem for the MIB (unless, of course, the MIB intended the
wording of their agreement to reflect this result!) because a significant number of fatal road
traffic accidents are likely to result in a situation whereby the dependants bringing the claim
under the 1976 Act will not have had knowledge of the driver’s insurance status. Remember
also that following White v White  UKHL 9 the words “knew or ought to have known that
the driver was uninsured” are not sufficient to accept a passenger who gave no thought to the
question of insurance or who was careless or negligent in respect of this issue.
Withdrawal of Pre-Action Admission of Liability
Walley v Stoke on Trent City Council
Court of Appeal 31 July 2006
Following Sowerby v Charlton  1 WLR 568 CPR 14.1(5) (which provides that the
permission of the Court is required to amend or withdraw an admission) only applies to
admissions made in the course of proceedings and not pre-action admissions.
However, the Court did have power in circumstances where a Defendant wished to withdraw
a pre-action admission once proceedings had commenced, to strike out a Defence under
CPR 3.4(2) as an abuse of process or as being otherwise likely to obstruct the just disposal of
For a Claimant to show that the withdrawal of an admission would amount to an abuse of
process of the Court it would usually be necessary to show that the Defendant has acted in
bad faith. In order to show that the withdrawal was likely to obstruct the just disposal of the
case it would usually be necessary for the Claimant to show that he would suffer some
prejudice which would affect the fairness of the Trial.
On the facts of Walley the Claimant was not able to establish abuse of process or any
prejudice. Accordingly, the Defendant had given permission to withdraw the admission.
The decision in Sowerby provoked considerable controversy because it permitted a defendant
to withdraw a pre-action admission upon commencement of proceedings without needing the
permission of the Court even though the Claimant had (a) relied on the admission; (b)
therefore not investigated the issue of liability and (c) thereby sustained significant prejudice
as a result of the delay. Claimants were put in the invidious position of having to investigate
liability even though it had been admitted knowing that in most cases a Defendant would
argue that such costs were not reasonably incurred in the face of the admission.
Fortunately, on 6 April 2007 rule 14.1A was inserted into the CPR dealing expressly with preaction
admissions. However, the rule is not retrospective and therefore the decisions in
Sowerby and Walley continue to apply to pre-action admissions made before 6 April 2007.
For admissions made after this point in time a Defendant may only withdraw an admission by
agreement or with permission of the Court. Paragraph 7.2 of the Practice Direction to part 14
sets out a checklist of factors (including “all the circumstances of the case”) which the Court
must take into account in exercising its discretion.
Expert Evidence in Low Velocity Road Traffic Collision Cases
Casey v Cartwright
Court of Appeal 5 October 2006
In Kearsley v Klarfeld  2 All ER 303 the Court of Appeal provided guidance in relation to
low velocity road traffic collisions where the Defendant contended that no injury could have
been sustained in the face of a claim where whiplash was alleged. Following on from this
decision the Court of Appeal provided further guidance in relation to the use of expert
The question of whether expert evidence on causation should be admitted only arose where a
Defendant contended that the nature of the impact was such that it was either impossible or
very unlikely that the Claimant could have sustained a significant injury. If a Defendant
wished to raise that issue he should:
(a) Within 3 months of the letter of claim notify all the other parties that he intended to do
(b) The issue should be expressly identified in the Defence which should be supported
as usual by a statement of truth.
(c) Within 21 days of serving the Defence the Defendant should serve on the Court and
other parties witness evidence identifying the grounds on which the issue was raised.
If satisfied that the issue had been properly raised the Court could then give permission for
the Claimant to be examined by the Defendant’s medical expert. If the medical evidence then
showed that the Defendant had a real prospect of success on the issue of causation the Court
would generally give the Defendant permission to rely on it at Trial. However, permission
might be refused if the overriding objective required it. Permission would generally be refused
if the issue was not raised within 3 months of the original claim or if there was a factual
dispute whose resolution was likely to resolve the causation issue so that the expert evidence
would serve little purpose. Permission might also be refused where the injury alleged and the
damages claimed were disproportionately small compared with the extent and complexity o
(a) The Claimant’s personal knowledge of the seriousness of the injury.
(b) The inhibiting and other consequences of the injury for the Claimant (including, for
example, the psychiatric repression of memories) but thereafter
(c) In the light of the subjective issues to consider whether from an objective point of
view whether he should have considered it sufficiently serious to justify the institution
Please note, however, McCoubrey v MOD decided only nine weeks later below which doubts
Limitation – Knowledge
McCoubrey v Ministry of Defence
Court of Appeal 24 January 2007
 EWCA Civ 17
The MOD appealed against the decision that the Claimant had brought a personal injury claim
in time pursuant to section 11(4) (b) of the Limitation Act 1980. In 1993 the Claimant
sustained hearing loss when a thunder flash exploded near him. This was confirmed by an
audiogram in 1994. Subsequent audiograms showed that the damage remained consistent.
However, this did not affect his career until 2001 when he was temporarily downgraded. He
was formally downgraded in 2003 and told that he was likely to be permanently excluded from
active service. In 2004 he issued proceedings. The Claimant relied on both section 11(4) (b)
(date of knowledge of significant injury) and section 33 (disapplication of limitation period) of
the Limitation Act 1980. The Judge at first instance held that the effect of the Claimant’s
injuries did not have a significant impact on him until the MOD restricted his activities in 2001.
Held the law had changed. The test under section 14(2) was substantially objective and not
the mixture of subjective and objective in the way in which the analysis of Lane LJ in
McCafferty v Metropolitan Policed District Receiver  1 WLR 1073 indicated. The
question of whether an injury was “significant” within section 14(1) (a) as expanded by section
14(2) was to be decided by reference to the seriousness of the injury and not by reference to
its effect on the Claimant’s private life or career and still less by reference to its subjectively
perceived effect on the Claimant’s private life or career. Catholic Care [Diocese of Leeds] v
Young  EWCA Civ 1534 and Adams v Bracknell Forest BC  UKHL 29 applied,
KR v Bryn Alyn Community Holdings Limited  EWCA Civ 85 doubted.
Accordingly, section 14(2) had a comparatively limited application. Given the power of
section 33 to extend the limitation period section 14(2) should be relatively narrowly
The person contemplating section 14 was a person who was in the same position, in objective
terms, as the Claimant. That test was objective but it did not prevent the objective
circumstances of the Claimant being taken into account, as opposed to personal
characteristics like intelligence, ambition and personality which could not be taken into
account. The proper approach to the question raised by section 14(2) was to consider the
reaction to the injury as opposed to its possible consequences of a reasonable person in the
objective circumstances of the actual Claimant while disregarding his actual personal
attributes. The Judge below had therefore been in error and the case would be remitted for
him to consider the application under section 33.
Limitation – MIB Uninsured Drivers Agreement
Richardson v Watson and Another
Court of Appeal 6 December 2006
The Claimant brought a personal injury action against an uninsured driver but failed to give
necessary notice to the MIB pursuant to clause 9. The MIB relied upon the failure to give
notice and accordingly the Claimant discontinued the claim and commenced a fresh action
outside the limitation period. The Court held that there could be no objection in principle to a
claim of discontinuing proceedings and commencing a fresh action in these circumstances so
long as timely notice was given to the MIB in the second action. Given that the MIB
agreement required notice in order to avoid the entry of default judgment rather than to
prevent stale claims, the giving of notice in the second action would remove any prejudice the
MIB might otherwise suffer as a result of the late notice.
Of course the second action was subject to the Limitation Act 1980. However, the Court held
that it would be equitable not to apply the limitation period but to allow the Claimant’s action
nonetheless to proceed by exercising the Court’s discretion under 33 of the 1980 Act.
Fatal Accidents Act 1976 Section 4 – Death in Service Benefits – Benevolence of Third
Arnup and Arnup v M W White Limited
QBD 27 March 2007
 EWHC 601
The Claimant pursued damages for dependency and other losses under the Fatal Accidents
Act following the death of Mr Arnup. Liability was admitted. However, the Claimant
contended that two payments were benefits accruing as a result of Mr Arnup’s death so that
by section 4 of the Act they should not be accounted for in assessing damages. The first
payment of £129,600 had been paid to the Claimant in respect of Mr Arnup’s death benefits
scheme. The second amount of £100,000 had been paid in respect of benefits received
under a life policy from the Defendant’s employee benefits trust.
Held: the essential question in the instant case was whether either or both payments accrued
as the result of Mr Arnup’s death. That was a question of causation.
The £129,600 had become payable under the death in service policy on Mr Arnup’s death but
payable to the Defendant not the Claimant. Under the scheme rules the Defendant could not
keep the sum but had to pay it out. In the circumstances, what had caused the payment of
£129,600 to the Claimant was the decision of the Defendant to pay that sum to her and not
the death of Mr Arnup. Accordingly, it could be taken into account.
The £100,000 also became payable under the life policy on the death of Mr Arnup to the
employee benefit trust. The trust did not have to pay the money on to anyone. It could have
added it to the trust fund. The £100,000 had been paid as a result of the trust’s decision to
pay that to the Claimant. Accordingly, that also was not a payment that accrued as a result of
Mr Arnup’s death. However, the payment of £100,000 did fall within the scope of the
exception for benevolent payments. The trust was a third party independent of the Defendant
with an unfettered discretion as to how to deal with the assets of the trust fund. Accordingly,
the £100,000 would not be taken into account.
This case demonstrates that in respect of payments made as a result of someone’s death it is
often fruitful to examine in detail the precise mechanism of the payment and the background
of the cause of the payment. Crucially, on the facts there was no evidence that the Claimant
himself had contributed towards the cost of the death in service benefit or the life policy
otherwise the Claimant could have claimed that she was entitled to benefit from that contract
of assurance without those sums being taken into account to offset the Defendant’s liability.
Periodical Payments – Appropriate Indexation Section 2 Damages Act 1996 – five
further decisions following Flora v Waykom
Thompstone v Tameside and Glossop Acute Services NHS Trust
 EWHC 2904
QBD Manchester (Swift J) 23 November 2006
The Claimant suffered spastic quadriplegic cerebral palsy as the result of oxygen deficiency
at birth. The NHS admitted liability and agreed lump sums in settlement of all heads of
damage save losses of earnings and care costs. The Claimant argued for periodical
payments linked not to the retail price index but to the average earnings index or the Annual
Survey of Hours and Earnings (ASHE): median earnings level index or the ASHE: occupation
earnings for care assistants and home carers index (ASHE 6115) because those indices
more accurately reflected increases in wages payable to carers.
The NHS argued that the burden of proof lay on the Claimant, that a periodical payments
order linked to the RPI was appropriate and that indexation to other indices would result in
The Court held that its duty was to decide what form of order would best meet the Claimant’s
needs and so far as sections 2(8) and 2(9) of the Damages Act were concerned to determine
what was appropriate, fair and reasonable. Those questions did not lend themselves to
determination by way of the burden of proof. If the Claimant did bear a burden of proof it was
an evidential one – namely an obligation to adduce evidence sufficient to establish that the
RPI was an inappropriate indexation and that there was at least one alternative more
appropriate measure available. Further, there was a strong possibility that the earnings levels
of the type of carers who would care for the Claimant would grow at a significantly faster rate
than the RPI. Therefore, indexation of care costs to the RPI was unlikely to meet the
Claimant’s needs and could not be described as fair, reasonable or appropriate. However,
use of the average earnings index would be likely to lead to overcompensation. Use of the
ASHE would be likely to reduce in overcompensation albeit to a lesser degree than the
average earnings index. In the circumstances, indexation by reference to ASHE 6115 would
provide a reasonable and accurate indicator of the growth of the earnings of the Claimant’s
carers. It would be appropriate, fair and reasonable under section 2(9) to modify the effect of
section 2(8) by providing for the amount of payments to vary by reference to the 75th
percentile of ASHE 6115. Flora v Waykom (Heathrow) Limited  EWCA Civ 1103
John Corbett v South Yorkshire Strategic Health Authority
The health authority admitted liability and agreed all heads of loss save care and case
management in respect of a claim brought by the Claimant who sustained brain injuries at
birth. The Claimant required almost constant supervision given that he did not have an
established sleep pattern. The health authority contended that:
(1) The Claimant’s care should be provided by two live-in carers provided through an
agency who would work alternative periods of a week or more with respite care for
3hrs a day provided by another carer.
(2) That the future periodic payments for the cost of this care regime should be indexed
by reference to the Annual Survey of Hours and Earnings 6115 earnings related
index rather than the retail price index.
(3) That the Court has no power under section 2(8) and 2(9) of the Damages Act 1996 to
use an indexation measure other than the RPI. Further, it contended that periodical
payments linked to an earnings related index would unduly impact upon NHS patients
given the local authority’s limited resources.
The Court held:
(1) The regime favoured by the Claimant (a team of support workers) was appropriate for
the Claimant. (It is interesting to note that the Court appears to have preferred the
Claimant’s regime not only because the Defendant’s regime involves the carers
working significantly long hours which was a regime viewed as not being in the
Claimant’s best interests but also because the Defendant’s regime conflicted with the
Working Time Regulations 1998. The Defendant did not adduce evidence that there
was a collective or workforce arrangement (side-stepping the Working Time
Regulations). Accordingly, the Courts concluded that the Defendant’s regime could
not be implemented within the law).
(2) Section 2(9) of the Act did include the power to dis-apply the indexation provision
otherwise the words in section 2(9) would be without reference (Flora v Wakom
(Heathrow) Limited (2006) EWCA Civ 1103 and Thompstone v Tameside and
Glossop Acute Services NHS Trust (2006) EWHC 2904 applied.
(3) It was not just or practicable for the Court to adopt different approaches to the
appropriate indexation measure by reference to the identity of the Defendant. Such
an approach was contrary to authority: White v Chief Constable of South Yorkshire
 2 AC 455 and McFarlane v Tayside Health Board  2 AC 59 considered,
Heil v Rankin  QB 272 applied. The Defendant’s argument based upon
competing resources breached the principle that damages should be calculated to
achieve as closely as possible full compensation for the Claimant therefore the Court
selected as an appropriate index 70% of the ASHE index rather than the RPI.
Sarwar v Ali and MIB
 EWHC 1255
A 17 year old was severely injured in a road traffic accident. Liability was agreed 75/25 in his
favour. The court was asked to assess his losses. S contened for a lump sum award but, if a
periodical payments order was to be made it should be linked to an index other than the RPI.
The court held that all heads of loss should we awarded by way of a lump sum save future
losses of earnings, care and case management. When allowance was made for contributory
negligence this method was more likely to secure the claimant’s position. S was assessed as
someone who would have become a professional with average lifetime earnings of around
£55,000 per annum and who would have retired at 68. Following Flora v Wakom (Heathrow)
Limited (2006) EWCA Civ 1103 the court used as an index the ASHE aggregate for male fulltime
employees at the 90th percentile. In respect of care ASHE 6115 would be utilised, again
at the 90th percentile.
RH v United Bristol Healthcare NHS Trust
 EWHC 1441
The claimant suffered brain damage at birth. Liability was admitted and the quantum of the
claim, if assessed on a lump sum basis, was agreed. However, if part of the award was to be
made by way of periodical payments order the parties could not agree the appropriate
indexation to be used. The Defendant contended for the RPI and the claimant for either the
average earnings index, ASHE or ASHE 6115.
Applying Thompstone, and considering Corbet and Sarwar the court held that it was
compelled to find a more suitable index than the RPI and therefore applied ASHE 6115 (at
80th percentile for ages 6-19 and 75th percentile from 19 onwards.
It appears that the tide is flowing against defendants on the issue if the appropriate indexation
for periodical payments for care. It remains to be seen whether, in the light of these
decisions, a further case will be taken to the Court of Appeal. Given some of the comments
made in Flora (Brooke LJ) many take the view that a more restrictive interpretation of s. 2 of
the Damages Act is unlikely.
Costs Successful Party’s Dishonest Conduct – Appropriate Deduction
North Star Systems Limited and Seaquest Systems Limited and Ultraframe (UK) Limited v
Fielding and Others
Court of Appeal 6 December 2006
2006 EWCA Civ 1660
Ultraframe appealed a costs order made in proceedings where Fielding had been successful
but had also been found guilty of serious dishonesty by attempting to maintain forged
documents. Ultraframe considered that by reason of Aaron v Shelton  EWHC 1162,
 3 All ER 561 it would be precluded from referring upon detailed assessment to the
finding of dishonesty when the costs incurred by the dishonest party fell to be considered.
The Court of Appeal held, doubting Aaron v Shelton, that where a paying party had in his
favour a finding that the successful party had been dishonest and raised that factor as a
ground for a reduction of costs at the end of the Trial and the Judge ordered a reduction, the
natural construction of that order, unless the contrary was expressly stated, was that the
party guilty of dishonesty should not be entitled to argue on assessment that the costs
incurred in seeking to make a dishonest case could be taken as reasonably incurred because
the Judge had made a reduction. Consideration of a party’s conduct should normally take
place both at (a) the stage when the Judge was considering what orders for costs he should
make and, also (b) during assessment. However, the dishonest party should not be
susceptible to double jeopardy and it would therefore be advisable for a Judge to make clear
whether he was making the order on the basis that the paying party would still be entitled to
raise the dishonesty point on assessment.
The decision in Aaron v Shelton has led many Defendants to insist that (whether a costs
order is made by a Trial Judge following Trial or simply between parties as part of a
compromise agreement) that it is necessary within the Order or settlement agreement to deal
with the question of conduct or otherwise expressly reserve it for the detailed assessment.
This decision appears to clarify the position. However, claimants facing such arguments
should be careful to ensure that they do not suffer a double reduction – a percentage
reduction and the disallowing of the costs of an issue when in reality both penalties cover the
Conditional Fee Agreements – Enforceability – Loss to Client not Required
Garrett v Halton Borough Council
Myatt and Others v National Coal Board
Court of Appeal 18 July 2006
In Garrett the Deputy District Judge at first instance found that the solicitors when
recommending after the event insurance had failed to inform the Claimant that they had an
interest in doing so contrary to regulation 4(2) (e) (ii) of the Conditional Fee Agreement
In Myatt Master Wright in assessing costs on a detailed assessment found that the Claimants’
solicitors had not informed the Claimants whether they considered that the Claimants had
relevant before the event legal expenses insurance cover in breach of regulation 4(2) (c) of
the Conditional Fee Agreements Regulations 2000.
Giving the Judgment of the Court Lord Justice Dyson held that there were two questions to be
answered. These were:
(1) Did the test in Hollins v Russell  1 WLR 2487 (paragraph 107) “has the
particular departure from a regulation … had a materially adverse effect either upon
the protection afforded to the client or upon the proper administration of justice?”
require the Court to consider whether the solicitors client had suffered actual
prejudice as a result of an alleged failure to satisfy the conditions? and
(2) Was a conditional fee agreement’s enforceability to be judged by reference to the
circumstances existing at the time when it was entered into or to those existing when
the question arose?
In stark contrast to the Claimant friendly decision in Hollins it was held that the language of
section 58(1) and (3) of the Courts and Legal Services 1990 Act was clear and
uncompromising – if one or more of the conditions was not satisfied the conditional fee
agreement was unenforceable. It would be fallacious to say that a breach was trivial or not
material simply because it did not in fact cause loss to the client in a particular case. Further,
there was no reason to depart from the general rule that the legal character of a contract must
be determined at its commencement and subject to the principle of de minimis non curat lex a
breach was a breach even if it caused no loss.
Accordingly, in Garrett the solicitors were found to be in breach of regulation 4(2) (e) (ii)
(which provides that the solicitors should have informed the Claimant whether the solicitors
had an interest in recommending a particular contract of after the event insurance) because
(a) the solicitor was on the insurers “panel” and there was therefore an interest to the solicitor
in recommending the insurance because it assisted in maintaining a flow of work to the
solicitor and (b) the solicitors gained a commission on the insurance premium. Accordingly,
the solicitors had not disclosed the real financial interest they had in recommending a
particular policy and they were rightly found in breach of regulation 4(2) (e) (ii).
In Myatt the solicitors had asked their clients (ex-miners) to decide whether they had before
the event insurance which would cover legal expenses. The solicitors should have taken
reasonable steps themselves to ascertain the true insurance position so as to be able to
inform their clients whether they considered that the risk was already insured (regulation
4(2)(c) requires that the client must be provided information about whether the legal
representative considers that the client’s risks of incurring liability for costs…is insured against
under an existing contract of insurance). Accordingly, the solicitors had asked the wrong
question and had thereby failed to provide the appropriate information. Vitally, even though
none of the miners in question had before the event insurance the Court held that there was
nonetheless a material breach of regulation 4(2)(c).
On the question generally of the steps required of a solicitor in ascertaining whether before
the event insurance exists in respect of a client the Court held that it was not possible to give
rigid guidance. Guidance had already been provided by the Court of Appeal in Sarwar v Alam
 1 WLR 125 but solicitors were not required slavishly to follow that guidance. In
determining what was reasonably required of a solicitor a number of factors could be relevant
including (a) the nature of the client; (b) the circumstances in which a solicitor was instructed;
(c) the nature of the claim; (d) the costs of the after the event insurance; (e) if the issue had
been referred to solicitors who were on a panel, the fact that the referring body had already
investigated the question of the availability of before the event insurance.
There can be no question that this decision marks a softening of approach by the Court of
Appeal to arguments advanced by Defendants in relation to the enforceability of CFA
agreements. The decision in Hollins (Brooke, Hale and Arden LLJ) held expressly that in
determining whether the 2000 regulations had been satisfied it was appropriate to consider
whether any alleged breach had a materially adverse effect upon the protection afforded to
the client or upon the proper administration of justice. It is difficult to see how in
circumstances where a particular Claimant does not have before the event insurance failure
to advise him of this fact can have led to such a result. For example, a memorable sentence
from Hollins is “in future District Judges and Costs Judges must be equally astute to prevent
satellite litigation about costs from being protracted by allegations about breaches of the CFA
Regulations where the breaches do not matter…”
It is also important to remember that the Conditional Fee Agreements Regulations 2000 do
not apply to conditional fee agreements entered into after November 1 2005. However, that
will still leave for many Claimant solicitors a substantial number of cases in progress where
these points may be taken. Of particular concern are cases which were handled by claims
management companies in the early stages, particularly where the pre-CFA inquiries were
carried out by these entities.
Indemnity Principle not Applicable to Fixed Recoverable Costs
Butt v Nizami; Butt v Kamuludn QBD 9th February 2006
Mr Butt (the defendant at first instance) appealed against a Cost Judge’s decision that
entitlement to fixed recoverable costs under CPR 45.9 and a success fee under CPR 45.11
did not depend on the existence of an enforceable conditional fee agreement. CPR 45.9
relates to fixed costs allowed in road traffic accident cases where damages of less than
£10,000 are agreed. Mr Butt’s Solicitors were concerned that the Claimant’s Solicitors had
failed to make appropriate inquiries about the availability of before the event insurance and
sought a direction that the Claimant’s Solicitors certify compliance with the Conditional Fee
Agreement Regulations 2000.
It was held that the intention of CPR Part 45 was to provide an agreed scheme of recovery
that was certain and easily calculated by providing fixed levels of recovery which might over
reward in some cases and under reward in others but which were regarded as fair when
taken as a whole. It was therefore clear that the indemnity principle should not apply to the
figures that were recoverable and there was therefore no reason why the indemnity principle
should have any application to CPR 45.9 and 45.11. In seeking costs under CPR Part 45 the
receiving party had only to demonstrate that the conditions laid down under the rules had
been complied with. It did not have to demonstrate a valid retainer between Solicitor and
Costs – Conditional Fee Agreements – Fixed Success Fees – CPR 45.16
Lemont v Burton
Court of Appeal 9 May 2007
 EWCA Civ 429
The Claimant bought a claim following a road traffic accident. His Solicitors were instructed
under a conditional fee agreement which provided for a success fee. The Defendant admitted
liability and advanced a Part 36 payment which was not accepted by the Claimant. At Trial
the Claimant secured a sum less than the Part 36 payment. Accordingly, the Judge awarded
the Claimant his costs up until the latest day upon which the Part 36 payment could have
been accepted. However, pursuant to CPR 45.16 (fixed percentage increases in road traffic
claims) the Judge awarded the Claimant’s solicitors a 100% success fee. It was agreed that
the Claimant’s claim had concluded at Trial and the issue was whether the 100% success fee
was mandatory in all cases or whether there was a discretion to vary it. The Defendant
argued that although CPR 45.16 did not itself give the Court jurisdiction to allow a different
percentage it was a pre-condition to the application of CPR 45.16 that the Court should have
first exercised its discretion under CPR 44.3 (Court’s discretion and certain circumstances to
be taken into account when exercising its discretion as to costs). Where a Claimant has
failed to better a Part 36 offer or payment the Court should award a success fee no greater
than it would have been under CPR 45.16 had the offer been accepted, namely 12.5%.
Held: the court could not use CPR Rule 44 to circumvent the mandatory provisions of CPR
Rule 45. It could neither directly award a different success fee nor award a Claimant a
proportion of his costs calculated for the purpose of awarding a different success fee.
Otherwise, the whole of the Part 45 scheme would be unraveled.
In common with Butt v Nizami this is an example of the rigorous application of Part 45 such
that it produces an unfair result in an individual case. Could the Defendant have avoided this
difficulty? It seems not.
Costs – dishonest conduct – assessment
Lahey v Pirelli Tyres Limited
Court of Appeal 14 February 2007
 EWCA Civ 91
The Claimant accepted within the relevant time limit a Part 36 payment of £4,000 in
compromise of his personal injury claim. The Defendant served points of dispute asserting
that the Claimant’s original claim relying on a competitive strain injury had been abandoned
and that the Defendant had made an offer of £5,000 before proceedings had been issued.
The Defendant asked the Costs Judge to make an Order that the Claimant should be
awarded only 25% of his assessed costs. The Costs Judge refused.
On appeal it was held that the Costs Judge did not have jurisdiction to make a percentage
reduction of assessed costs given the mechanics of Part 36. Upon acceptance of a Part 36
payment a Costs Order was deemed to have been made on the standard basis. Accordingly,
the Claimant was entitled to 100% of his assessed costs and the Court had no power to vary
that Order. That situation was unlike the situation where under Part 3.1(7) the Court had the
power to vary an existing Order – that power was only exercisable in relation to an Order that
the Court had previously made and not in relation to a deemed Order by operation of the
rules. In any event, it was unnecessary to give the Costs Judge jurisdiction to reduce costs in
this way because he had power in an appropriate case to disallow entire sections of a bill of
This case is like Walker Residential Limited v Davies and Another (Chancery Division 9
December 2005) – a warning to Defendants of the risks of exposing themselves to a Costs
Order by virtue of the acceptance of a payment into Court or Part 36 offer. Should a
Defendant wish to argue separately for a non-standard Costs Order it is therefore necessary
specifically to state the terms of the Costs Order in advancing a proposal for settlement. Of
course, in some cases this may fail to lead to the compromise of an action and on grounds of
risk it may therefore be prudent to allow the Claimant to accept an offer (and thereby gain the
advantage of a Costs Order for 100% of his costs) and thereafter to argue conduct at the
Effect of Dishonesty on Recovery of Damages
Churchill Car Insurance v Victor Kelly
QBD 8 February 2007,  EWHC 18
At first instance a Claimant who had been injured in a road traffic collision produced a letter
purporting to show that he had been dismissed by his employer because of his accident
related injuries and non-attendance at work. He also alleged that the employment tribunal
had considered his dismissal. The Defendant was ordered to pay damages to the Claimant
including a sum for loss of earnings. The Defendant was refused permission to appeal but
thereafter obtained fresh evidence demonstrating that the Claimant had been dismissed due
to theft of a tax disc. In addition, there had been no employment tribunal proceedings and the
letter of dismissal was a forgery. The Defendant applied for permission to appeal and adduce
fresh evidence and argued that because the tax disc had been used by the Claimant when
the collision had occurred he was driving unlawfully and he should not be able to rely on his
unlawful conduct as a basis for a claim.
Held although permission to appeal would be granted and it was obvious that the Claimant
had embarked on a calculated and dishonest scheme to obtain money from the Defendant by
fraud which involved giving perjured evidence, those facts did not disentitle the Claimant in
law from recovering heads of loss that were indisputably made out. Justice could be
achieved by varying or setting aside the appropriate findings of the Court on the respective
heads of damage and penalising the Claimant in costs.
This case must be contrasted with Molloy v Shell UK Limited  EWCA Civ 1272 often
cited in the face of dishonest Claimants wherein Lord LJ stated: “…Until he was found out the
Respondent’s approach to this action had been nothing short of a cynical and dishonest
abuse of the Court’s process. For my part I entertain considerable qualm as to whether,
faced with manipulation of the Civil Justice on systems on so grand a scale, the Court should,
once it knows the facts, entertain the case at all save to make the dishonest Claimant pay the
Defendant’s costs…” The decision in Kelly provides a potential fallback from this otherwise
draconian sanction. Of course, these cases are fact sensitive and it would be correct to
observe that whilst in some cases a Claimant’s damages may be pared down, in other cases
it may still be found appropriate to strike the claim out completely.
Costs Capping Orders
Brenda Willis v Neil Nicholson
Court of Appeal 13 March 2007
 EWCA Civ 199
The Appellant, Willis, appealed against the refusal of a Costs Judge to make a Costs Capping
Order. On three occasions the Respondent had provided estimates of costs, the most recent
being an estimate of £459,496 for the future costs of the action bringing the total costs for the
whole claim to £959,342. The Judge refused to make a Costs Capping Order ordering
instead that future costs of the action should not exceed £459,496. The Appellant submitted
that the Judge should either have ordered a lower limit than the estimate or should have
remitted the case to a Costs Judge for him to set such a cap.
The Court of Appeal held that the Judge’s decision could not be disturbed. In addition, the
Court made general observations about Costs Capping Orders. First instance Judges had
made Orders in limited circumstances, for example Smart v East Cheshire NHS Trust 
EWHC 2806. On the other hand, there have been indications from the Court of Appeal
encouraging the use of such orders – see Griffiths v Solutia (UK) Limited  EWCA Civ
736, Leigh v Michelin Tyre Plc  EWCA Civ 1766 and King v Telegraph Group Limited
 EWCA Civ 613. The difference of opinion expressed in these decisions was in need of
resolution. However, the Court expressed serious doubt as to whether further guidance on
costs capping if it were to be given at all should emanate from the Court rather than the Civil
Procedure Rule Committee. It would be for the committee to decide whether to take up the
issues that had been raised.
It appears that obtaining a Costs Capping Order may in future (in the absence of further
guidance from the Civil Procedure Rule Committee) be difficult. However, the same (albeit
less potent) result can be achieved by securing an Order that a party be held to its costs
estimate. This decision may therefore lead to future applications for Costs Capping Orders
being advanced in this way and, possibly, more ambitious estimates of costs being advanced
in high cost cases