Dispute Res & Tort Flashcards
On 2 February [last year], the claimant first instructed solicitors concerning a breach of contract claim against the defendant.
Following the commencement of County Court proceedings, the defendant made a Part 36 offer to the claimant. The relevant period of that offer expired on 18 January [this year].
At trial, the claimant fails to obtain a judgment more advantageous than the defendant’s Part 36 offer.
Which of the following statements best describes the costs order that the court is most likely to make following judgment?
A-The defendant pays the claimant’s costs on the standard basis from 2 February [last year] to 18 January [this year] and interest on those costs at a rate not exceeding 10% above base rate. The claimant pays the defendant’s costs on the indemnity basis and interest on those costs at a rate not exceeding 10% above base rate from 19 January [this year] until judgment.
B-The defendant pays the claimant’s costs on the standard basis from 2 February [last year] to 18 January [this year]. The claimant pays the defendant’s costs on the indemnity basis and interest on those costs at a rate not exceeding 10% above base rate from 19 January [this year] until judgment.
C-The defendant pays the claimant’s costs on the standard basis from 2 February [last year] to 18 January [this year] and interest on those costs. The claimant pays the defendant’s costs on the standard basis and interest on those costs from 19 January [this year] until judgment.
D-The defendant pays the claimant’s costs on the standard basis from 2 February [last year] to 18 January [this year]. The claimant pays the defendant’s costs on the standard basis and interest on those costs from 19 January [this year] until judgment.
E-The defendant pays the claimant’s costs on the standard basis from 2 February [last year] to 18 January [this year]. The claimant pays the defendant’s costs on the indemnity basis and interest on those costs from 19 January [this year] until judgment.
Option D is correct. That makes all the other options wrong.
As the claimant has failed to obtain a judgment more advantageous than the defendant’s Part 36 offer, the CPR (it is rule 36.17(3)(a) and (b)) changes the normal costs outcome that the loser (the defendant) should pay the winner’s (the claimant’s) costs on the standard basis without interest being paid on those costs before judgment.
So, before the defendant’s Part 36 offer expired on 18 January [this year], the normal costs outcome applied, namely the defendant should be ordered to pay the claimant’s costs on the standard basis from 2 February [last year] (when those costs started) to 18 January [this year] when the relevant period of the defendant’s Part 36 offer expired. No interest is payable on those costs.
In addition, from 19 January [this year] to judgment the effect of CPR Part 36 is that the court should order the claimant to pay the defendant’s costs incurred up to judgment with interest payable on those costs. The CPR does not specify that costs should be payable on the standard basis but that has been established by case law. Also, note that the CPR does not specify any particular rate of interest that is payable on these costs but typically the court award a commercial rate. The CPR provision for a defendant’s successful Part 36 offer does not provide for interest on costs at a rate not exceeding 10% above base rate – that applies to a successful claimant’s Part 36 offer (it is r 36.17(4)(c).
The owner of a chain of luxury hotels in London redecorates the common areas and rooms of its hotels on a regular basis. The owner uses three different decorating companies to do so. The owner has a good relationship with all the companies, who are all employed on similar terms including price. The owner has other decorating contacts which it uses when required.
The owner recently used the defendant company. It is unhappy with the quality of the work which has been carried out. Attempts at negotiating a settlement of the dispute have failed.
A letter before claim has been sent to the defendant, who instruct solicitors. A response is received from them denying liability but suggesting that the parties mediate the dispute.
Should the owner accept the proposal to mediate the dispute?
A-Yes, because if the owner then chooses to litigate, the court could refuse to order interest on any sum awarded for a specified period.
B-Yes, because if the owner then chooses to litigate, it is likely to be ordered to attempt alternative dispute resolution during the litigation.
C-Yes, because mediation is a non-confrontational method of resolving disputes and it is important that the owner preserves its relationship with the defendant.
D-No, because the parties have already attempted negotiation and it is therefore unlikely that mediation will resolve the dispute.
E-No, because it would be better to arbitrate the dispute since this would allow the decision to be publicised.
Option A is correct. The parties are required to comply with the Practice Direction – Pre-action Conduct and Protocols. If a party unreasonably refuses ADR then the sanctions set out in paragraph 16 can be imposed, including refusing to order interest on sums awarded. The fact that negotiations have failed does not mean that mediation will not succeed; it has a high success rate. A refusal to mediate could be seen therefore to be unreasonable and sanctions could be imposed.
Option B is wrong. The court cannot order ADR; it can only provide encouragement to attempt ADR.
Option C is not the best answer. The fact pattern suggests that the owner will not be unduly troubled by losing this business relationship as there are other businesses who could supply a decorating service.
Option D is wrong. The fact that negotiations have failed does not mean that mediation will not succeed; it has a high success rate.
Option E is wrong. Arbitration is confidential.
A defendant is an architect who is being sued by a claimant for professional negligence in respect of a building that the defendant designed for the claimant. The defendant is in the process of preparing their standard disclosure list of documents.
One of the documents in the defendant’s control is a report by a building expert which was commissioned by the defendant’s solicitor for the sole purpose of the litigation. The report concludes that there were some of the flaws in the defendant’s design as alleged by the claimant. The defendant thinks that the expert’s conclusion is wrong. The defendant does not wish to use this report or the expert in the proceedings. The defendant does not want the claimant to see the report.
Which of the following statements best describes the advice you would give to the defendant in respect of the disclosure and inspection of the report?
A-The defendant does not need to disclose the report as they will not be relying on it, or the expert who made it, at trial.
B-The defendant does not need to disclose the report because it is privileged.
C-The defendant does not need to disclose the report because it is confidential.
D-The defendant must disclose the report but can claim that it is privileged from inspection.
E-The defendant must disclose the report and allow it to be inspected by the claimant.
Option D is the best answer.
First, the report must be disclosed as it falls within standard disclosure. Standard disclosure requires a party to disclose only (a) the documents on which they rely; and (b) the documents which (i) adversely affect their own case; (ii) adversely affect another party’s case; or (iii) support another party’s case. Here, “the report concludes that there were some of the flaws in the defendant’s design as alleged by the claimant.” So, it supports the claimant’s case of negligent design and adversely affects the defendant’s defence to that claim.
Second, the report is privileged from inspection. The report was commissioned by the defendant’s solicitor for the sole purpose of the litigation. Legal professional ‘litigation’ privilege therefore applies to it.
It can be seen that therefore option A is wrong. That the defendant will not be relying on the report, or the expert who made it, at trial is irrelevant to the question of disclosure.
Likewise, options B and C are wrong. That the report is privileged or confidential are irrelevant to the question of disclosure.
Option E is not the best answer. It is correct that the defendant must disclose the report but not that they must allow it to be inspected by the claimant.
A claimant company delivered goods to the defendant in performance of an oral contract. The defendant has failed to pay the agreed contract price of £50,000. The claimant sent a pre-action protocol letter of claim demanding payment of the contract price. As no response has been received, the claimant wishes to commence court proceedings.
Which of the following best describes whether and how the claimant should claim interest in its particulars of claim?
A-The claimant does not need to claim interest in the particulars of claim because the court will award interest at its discretion at the end of any trial.
B-The claimant should claim interest in the particulars of claim on the unspecified sum claimed.
C-The claimant should claim interest in the particulars of claim on the unspecified sum claimed, as well as statutory compensation for the inconvenience of having to recover that sum.
D-The claimant should claim interest in the particulars of claim on the specified sum claimed.
E-The claimant should claim interest in the particulars of claim on the specified sum claimed, as well as statutory compensation for the inconvenience of having to recover that sum.
Option E is the best answer. This is a claim for a commercial debt consisting of a specified sum of money, namely the agreed contract price of £50,000.
That makes options B and C wrong as both refer to an unspecified sum being claimed.
On the facts, the agreed price arises from an oral contract and nothing indicates any agreed interest rate payable on late payment. Therefore, it is in the best interests of the claimant to claim interest under the Late Payment of Commercial Debts (Interest) Act 1998. This provides for a higher rate of interest than under section 35A of the Senior Courts Act 1981 or section 69 of the Country Courts Act 1984. In addition, the claimant can claim statutory compensation under that Act for the inconvenience of having to recover the debt.
Option A is wrong. Whilst the court has a discretion over the award of interest, the CPR requires that the particulars of claim include whether interest is claimed under the terms of a contract or under an enactment such as section 35A of the Senior Courts Act 1981 or section 69 of the Country Courts Act 1984. Where a specified sum is claimed, additional particulars must be included, for example, including the percentage rate at which interest is claimed.
Option D is not the best answer. Whilst it recognises that the claim is for a specified sum, it omits the entitlement of the claimant to claim statutory compensation under the 1998 Act.
The defendant was driving his car on a public road when he lost control and collided with the claimant’s house causing damage which is estimated to be in excess of £10,000.
Without sending a letter of claim, the claimant starts proceedings in the County Court for damages. A claim form and particulars of claim were deemed served on the defendant on Monday, 1 August. It is now Tuesday, 16 August and no response has been received from the defendant.
What should the claimant be advised to do next?
A-The claimant should apply for summary judgment.
B-The claimant should apply for default judgment on a specified sum.
C-The claimant cannot do anything as the court will order a stay of the proceedings and require the parties to engage in the relevant pre-action protocol steps.
D-The claimant should apply for default judgment on an unspecified sum.
E-The claimant should wait until close of business, Monday 29 August to see if the defendant responds to the proceedings.
Option D is the best answer. Default judgment should be applied for as there has been no response to service of the proceedings and the deadline for such a response passed 14 days after deemed service. As the claimant is seeking damages, the default judgment should be entered for an unspecified sum of money (damages).
Option A is wrong. Summary judgment is not the correct procedure here. Summary judgment is a form of interim application used where either the claim or the defence has no real prospect of success and there is no other compelling reason why the matter should proceed to trial.
Option B is wrong. Whilst applying for default judgment is correct, it will not be for a specified sum of money but for damages as per the correct option D.
Option C is wrong. The fact that the claimant has not complied with any relevant pre-action protocol steps does not prevent the claimant from applying for default judgment should the defendant fail to respond to service of the particulars of claim within the relevant period(s). The court will not stay the proceedings in these circumstances but it may affect the decision on costs at the disposal hearing which will follow next.
Option E is wrong because the initial time limit for responding to the particulars of claim is 14 days from deemed service. This is only extended to 28 days if the defendant files an acknowledgement of service, which it has failed to do here.
A claimant company appointed the defendant to design and install equipment in its factory for storing and dispensing a heavy wax, which had to be liquefied under heat for the manufacturing process. The claimant alleges that as a result of the defendant’s negligence, both in designing and installing the heating system, a fire broke out which caused damage to the claimant’s building and stock. The evidence relating to the heating system is highly complex and technical in nature. After following the relevant pre-action protocol, and consulting with an expert, the claimant issued proceedings for professional negligence for the sum of £180,000. The defendant disputes liability and wishes to use its own expert to prove this.
Which of the following best describes the most likely way the court will deal with the issue of experts?
A-The court is likely to order that a single joint expert is appointed and for the issues to be resolved on the basis of a written report alone in order to save time and costs.
B-The court can only order that a single joint expert is appointed because this case will be allocated to the fast track.
C-The court is likely to make an order for the separate instruction of experts, who will be ordered to meet to identify the areas of agreement and disagreement and the judge will be made aware of those discussions.
D-The court will instruct a suitably qualified expert and raise questions of that expert as this case will be allocated to the multi- track.
E-The court is likely to make an order for separate instruction of experts and give additional directions for the exchange of reports, additional questions, discussion and a written joint statement.
Option E is correct because the complex and technical nature of the dispute warrants the use of separate experts. The option also sets out the likely directions the court would make.
Option A is wrong because the complexity of the matter and the sums involved are likely to warrant the instruction of separate experts.
Option B is wrong because this case would be allocated to the multi-track given the value of the claim significantly exceeds £25,000.
Option C is wrong because such discussions between experts would be held on a without prejudice basis.
Option D is wrong. The court will not instruct the expert(s) needed; this is something the parties have to do.
On the day of the accident a farmer and his older brother had been together in a pub opposite the farmer’s fields. The farmer had been drinking spirits all day; his brother however was not drunk. The farmer telephoned a labourer he employed to bring the tractor with a trailer to collect them from the edge of the farmer’s field opposite the pub. The farmer had to be helped out of the pub by his brother, but once outside the farmer insisted on driving the tractor back across his fields to the farmhouse and told his brother and the labourer to sit on the seats in the trailer. Both the farmer’s brother and the labourer were hesitant about getting on board with the farmer driving, but, as the farmer insisted, they did so.
The farmer drove the tractor erratically and just inside his second field he failed to avoid the wheels hitting an open drain. As a result, the trailer toppled over, and both passengers were thrown out and caught underneath the trailer. Each suffered broken bones. A fireman, who was on the way back to his station, went to help. Both he and the farmer lifted the trailer off the two passengers to release them. In doing so the trailer landed on the fireman’s foot breaking three of his toes.
Which of the following statements best describes against whom, if anyone, the farmer may be able to successfully use the defence of voluntary assumption of risk (‘volenti’)?
A-No one; the defence cannot be successful in the circumstances.
B-The labourer, the fireman and the farmer’s brother.
C-The labourer and the farmer’s brother.
D-The farmer’s brother only.
E-The fireman only.
Option D is correct because only the farmer’s brother has been with the farmer throughout the day and seen his drinking and he had to help the farmer out of the pub. So he is the only claimant involved who may have known the nature and extent of the risk and voluntarily agreed to it (Morris v Murray [1991] 2 QB 6).
Option A is wrong because whilst the defence may not be successful for the farmer (Dann v Hamilton [1939] 1 KB 509), it is too strong to suggest that it cannot be successful in respect of the farmer’s brother’s claim. His brother was with him in the pub all day, had to help him out of the pub, and could have refused to get on board the trailer when asked to do so.
Option B is wrong because whilst the labourer may have been aware that the farmer was intoxicated, he would not have been aware of the extent of the farmer’s drinking and it is unclear if he saw the farmer being assisted out of the pub by his brother. In addition, the labourer was an employee of the farmer and his actions are therefore unlikely to been seen as truly voluntary as his boss insisted that he got on board the trailer (Smith v Charles Baker & Sons [1891] AC 325). The defence will also not be successfully used against the fireman as he was a rescuer and as such his actions were not truly voluntary as per Baker v TE Hopkins [1959] 1 WLR 966.
Option C is wrong because the labourer would not have been aware of the extent of the farmer’s drinking and it is unclear if he saw the farmer being assisted out of the pub. In addition, as an employee the labourer’s actions are unlikely to been seen as truly voluntary as his boss insisted that he got on board the trailer (Smith v Baker).
Option E is wrong as the fireman was a rescuer and as such his actions were not truly voluntary as per Baker v TE Hopkins.
The claimant in a breach of contract claim has applied for a freezing injunction against the defendant. The application is being made without notice to the defendant. The claimant’s witness statement in support of the application exhibits documentary evidence that the defendant has made large payments to overseas bank accounts during the last 6 months and the claimant relies on this evidence to demonstrate that there is a real risk that the defendant will dispose of its assets so as to defeat the enforcement of any judgment.
The day before the hearing of the application the claimant receives evidence that many of the defendant’s payments to overseas bank accounts during the last 6 months relate to legitimate business expenses.
Should the claimant bring this new evidence to the court’s attention at the application hearing?
A-Yes, because the claimant has a duty of full and frank disclosure.
B-No, because it is not in the claimant’s best interests to do so.
C-No, because it is for the defendant to do so.
D-Yes, because the evidence concerns the defendant’s assets that have been transferred out of the jurisdiction.
E-No, because the evidence is not relevant to the court’s decision.
Option A is the best answer. The application is made without notice, so the claimant has a duty of full and frank disclosure. The claimant must draw the court’s attention to evidence and arguments which it reasonably anticipates the defendant would wish to make.
Option B is wrong. It is in the best interests of the claimant to act in accordance with its duty of full and frank disclosure, as explained in the feedback to the correct option A.
Option C is wrong. The application is made without notice, so the defendant will not be present at the hearing and the claimant must not take advantage of the defendant’s absence. The claimant must comply with its duty of full and frank disclosure, as explained in the feedback to the correct option A.
Option D is not the best answer. The new evidence concerns not only that the defendant has transferred assets out of the jurisdiction but it undermines the basis of the application that there is a real risk that the defendant is disposing of its assets so as to defeat the enforcement of any judgment.
Option E is wrong. The new evidence is relevant to the question of whether there is a real risk that the defendant will dispose of its assets so as to defeat the enforcement of any judgment.
Quick Q:
A man is crossing the road outside his house when he is hit at speed by a cyclist riding in the road. The man is badly hurt and there is lots of blood on the pavement where he lands. A woman, who lives a couple of doors away from the man, happens to be walking home and witnesses the collision from 10 metres away. She then gives the man first aid and calls an ambulance. The woman is very disturbed by the collision and the injuries sustained to the man and she is subsequently diagnosed with Post Traumatic Stress Disorder as a result.
Does the woman have a claim against the cyclist?
A-Yes, because harm is foreseeable to the woman, she has a proximate relationship as the neighbour of the injured man, and it would be fair, just and reasonable for her to be able to proceed.
B-No, because the woman is solely a witness and she is not involved in the area of danger.
C-Yes, because the cyclist is a road user and as such the woman, as a pedestrian, would be able to bring a claim.
D-No, because the woman did not suffer any physical injury as her condition came on simply as a result of what she saw.
E-No, because the woman does not have a close relationship of love and affection with the man.
Option E is correct because this is a case of pure psychiatric harm, as the woman suffered psychiatric harm without physical impact. She is a secondary victim as she was not in the area of danger (Page v Smith [1996] AC 155) and as such she needs to satisfy the control mechanisms for a duty to be owed to her by the cyclist as set out in the case of Alcock v Chief Constable of South Yorkshire [1992] 1 AC 310. This includes establishing that there was the necessary ‘proximity of relationship’ between her and the immediate victim. She cannot satisfy the close tie of love and affection part of that test.
Option A is wrong as this is the Caparo test which is not the relevant test here, as clearly there is an established duty between a cyclist and a pedestrian walking close by. Secondly, even if this were a relevant test to be applied, the question about proximity of relationship would be between the cyclist and the woman, not the injured man and the woman.
Option B is wrong because the fact the woman is only a witness and not involved in the area of danger simply means that she is a secondary victim (Page v Smith), to whom a duty might still be owed if she can satisfy the Alcock control mechanisms.
Option C is wrong because although a road user, such as the cyclist, does owe a duty of care to a pedestrian (Nettleship v Weston [1971] 2 QB 691), such as the woman, the test is more detailed here as the woman suffered pure psychiatric harm. She was a secondary victim, thus the Alcock control mechanisms need to be satisfied.
Option D is wrong because in fact the woman is suffering from a medically recognised condition as a result of a sudden shocking event and thus application of the Alcock control mechanisms will decide whether or not a duty is owed.
Quick Q:
The claimant was paddle boarding on a well-maintained ornamental lake at a beauty spot. It was open to the public free of charge and owned by a local land-owner. The claimant fell off his board and broke his ankle and damaged the paddle board. The land-owner had displayed in the car park of the property, three signs saying “Hazard – Do not use the lake”. The lake was fenced and gated.
Which of the following statements correctly identifies whether the land-owner may be liable to the paddle boarder?
The paddle boarder was an unlawful visitor as he exceeded his permission by paddle boarding. The warning notices in the car park and the fencing are sufficient to discharge any duty the land-owner may owe him.
Option D is correct because the land-owner displayed signs warning people not to use the lake; by exceeding his permission the claimant became an unlawful visitor. Under s.1(5) of the Occupiers’ Liability Act 1984 warning signs and discouragements may be sufficient to discharge the duty of care owed by the land-owner to see that any unlawful visitor does not suffer injury on the premises by reason of any danger concerned. As the lake was fenced and gated it is reasonable to assume that the signs were sufficient
Small claims track:
up to £10,000.
Fast track:
over £10,000 and
up to £25,000.
Multi-track:
over £25,000.
Part 36 Offers Formalities
-Must be in writing
-Deadline for acceptance (not less than 21 days from deemed served)
-Consequences of acceptance by deadline and after deadline
Quick Q:
A company which manufactures and sells machine tools is in dispute with a customer concerning an unpaid invoice. The amount in dispute is £20,000. County Court proceedings are being defended on the basis that the machine supplied by the company to the customer was not of satisfactory quality.
The interest claimed on the unpaid invoice in the particulars of claim totals £2,150. The company’s legal costs to date are £5,760.
Both parties have completed their directions questionnaire. These reveal that the parties have instructed separate expert engineers who they wish to call to give oral evidence at trial. Both parties believe the trial of the action could last more than one day and should be allocated to the multi-track.
Which of the following best summarises the approach the court will take to allocation and case management directions in this case?
The court is likely to allocate the case to the fast track in view of the financial value of the case but before doing so it will take account of the views of the parties and the likely length of the trial given the issue in dispute and the any need for expert evidence to resolve it.
Option C is the best answer. Whilst the financial value of the case is a key factor in determining to which track a case should be allocated, here the court will take into account, amongst other matters, the extent to which expert evidence may be necessary, whether the trial is likely to last more than a day and the views of the parties. Fast track trials are normally conducted with a single joint expert but that is not an inflexible rule and it is possible that the case could still be conducted in a day if the experts’ reports are received in writing and the experts do not give oral evidence at trial.
****Standard vs indemnity basis
There are two key differences between the bases.
*When assessing on the standard basis, the court will only allow those costs that
are proportionate to the matters in issue. There is no test of proportionality on the
indemnity basis.
*Any doubts are resolved in favour of the receiving party on the indemnity basis, and the paying party on the standard basis.
DEFENDANTS OFFER IS ALWAYS ON THE STANDARD BASIS (NO INDEMNITY):
I.e. for example:
- C wins on liability at the trial and is awarded judgement which is more advantageous than D’s offer
-C wins on liability at trial and fails to obtain judgement which is at least as advantageous than C’s own offer
-C loses
(look at mind map)
C’s OFFER
-C wins on liability at trial and is awarded judgement which is at least as advantageous as C’s owns offer = ONLY PLACE INDEMNITY IS USED
-C wins on liability at trial and fails to obtain judgement which is at least as advantageous than C’s own offer
C loses on liability (D wins) (claimant will pay the defendants costs on the standard basis)
**Part 36 Offer Summary (who gets what, standard or indemnity)
DEFENDANTS OFFER = NO INDEMNITY BASIS
Appears interest is only applied from day 22 onwards
*******4.30pm Rule
Rules of deemed service check
4.30pm rule = if email sent before 4.30 it’s deemed as served on that day