Incidental Procedure: Third Party Procedure Flashcards
Where are the rules for third party procedure?
Relevant rules in OCR Chapter 20 and Form O10
What is the basis idea of third party procedure?
The basic idea is that in a situation where defender says he has a claim against someone else arising out of pursuers action and pursuer is not brought into the action then the defender can bring that person into the action so it can all be dealt with in the same process. The idea is that all the issues arising from the dispute will be litigated at once
There has to be a connecting arising from the dispute with defender and pursuer however.
What is the procedure?
The application is made to the Court by motion for service of a third party notice
In contrast to a counter claim you do not need to ask for permission from the court, you can do it already. The Pursuer might say the counterclaim is irrelevant or not covered by rule in chapter 19 but in order to lodge a counter claim you put in defences or adjustments. If you do it by amendment then you need to ask permisison because all amendments require permission from the court.
With a third party notice you always ask for permission and it is up to the court to decide whether or not you have to do this.
The defender (defending counterclaim) or Third Party can also use the procedure.
Third party can also seek to arrest on dependence.
It is a matter which is completely in discretion of Court Rodgers v James Crow 1971 SC 155
- Applies to rules for sheriff court and court of session for counter claiming and third party procedure.
So in third party notice must specify what your contention is and specify in defences either in original defences or adjustments or amendments.
As well as the notice in Form O10 need to specify in defences, adjustment or amendment the basis of claim against the Third Party – also need to include appropriate plea or pleas in law directed against the third party.
Earlier you bring in a third party the better - so if you are seeking to bring in third party if you try to do this before proof will start you are unlikely to succeed as it will result in proof being discharged.
The third party will need to have opportunity to respond to averments of defender and pursuer and this will take some time.
The pursuer may have something to say about whether a third party should be allowed.
The pursuer can get decree against defender and defender can carry on against third party with pursuer no longer being involved. The point about earlier the better is that because it is in discretion of the court the sooner the defender seeks to bring in third party then the more likely it is that it will be granted by the court.
How can a third party be brought into proceedings?
The circumstances that a third party might be brought in are many and varied (Right of relief under chapter 20):
1. Defender claims he has in respect of the subject matter of the action a right of contribution, relief or indemnity against any person who is not a party to the action, e.g an injury at work.
- Defender claims a person whom the pursuer is not bound to call as a defender should be made a party to the action in respect that such person is
(i) solely liable or jointly or jointly and severally liable with the defender; or
(ii) a person may be liable to the defender in respect of a claim arising from or in connection with the liability, if any, of the defender to the pursuer.
Where two or more people have materially contributed to an accident then this means a third party was also hit. So the driver could sue first and second driver - joint and several liability) the accident couldn’t happen without them both being negligent. With joint wrongdoers where pursuer sues only one then others may be brought in as third party.
If the pursuer sues only one of the driver then that driver may bring in another driver as third party. This can arise where you have two defenders as well and one of this two defenders brings another party in. This can happen where you have an accident on a construction site where there are a number of different parties e.g. Sub contractors etc. All of whom have contributed to some extent to the accident.
Indemnity (e.g. defender has a contractual right of indemnity against third party)
Relief or contribution – e.g. pursuer sues guarantor and guarantor brings in debtor or co-obligant
Joint wrongdoers pursuer sues only one the other or others may be brought in as a third party
What does the Law Reform (MP) (SC) Act 1940?
Once a third party is brought in they are treated in a sense as the same as the defender. If the defender adopts a case against them.
This act provides that:
Where in any action of damages in respect of loss or damage arising from any wrongful or negligent acts or omissions, two or more persons are found jointly and severally liable in damages or expenses, they are liable inter se (between them) to contribute to such damages or expenses, in such proportions as the court may deem just
The pursuer may get decree against one but not the others or the court may find they are all liable inter se to the damages. The act allows the defender or defenders in third parties to ask the court to determine what apportionment may be made between them for the total amount of damages which the pursuer would be entitled to get.
How should pleadings be made?
Pleading - OCR 20.2
In terms of pleadings what you need to do is to have Appropriate averments and pleas in law setting out grounds on which defender maintains proposed third party is liable by way of contribution, relief or indemnity or a basis on which there should be a party to the action.
You can either do this in defences or adjustment or in a separate statement of facts 20.2 (1)
It is better to do it in the one document (defences)
The defender will set out after you say not known and not admitted, then you say explained and averred including your contention that the third party is to blame and you are entitled to some contribution or relief.
The decision whether or not to bring in a third party is tactical. There may be circumstances where it is not in defenders interest to bring in a third party as you are essentially seeing someone else and you are creating a liability of expenses if that third party is found not to be liable at the end of the day.
If the third party is exonerated then it will be the pursuer who has to pick up the tab for that.
But if you have a good defence against pursuer then there may be no point in bringing in a third party.
If the pursuer cannot establish defence against you then no point in brining in a third party.
There may be circumstances were you have no alternative but to bring in a third party where you are being sued and feel you are due a contribution from another party or if someone else is wholly to blame then bring them in
After record closes – amendment 20.2 (2)
What is an Example of how to make a Plea-in-Law Joint Wrongdoer?
The appropriate plea in law is to say:
Separatim, esto (separately, in the event that) the accident was caused to any extent by fault on the part of the defender (which is denied), it also having been caused by the fault of the third party, any liability to the pursuer in damages and expenses should be apportioned between the defender and the third party in terms of the Law Reform (MP)(Sc) Act 1940 s 3 (2).
In PI cases, in the COs and the sh Ct we do not have pleas in law in the standard PI cases but look at pleas in law as it gives you precise indication as to proposition you are asking court to uphold at the end of the day.
What is an example of mployer’s Liability (Defective Equipment) Act 1969?
An example of how third party notice might arise in PI case.
This Act says that if an Employee suffers injury as a result of defective equipment provided by employer and the defect is attributable wholly or partly to the fault of a third party the injury deemed to be attributable to the employer.
The 1969 act means that the pursuer does not have to go anywhere else if employer says equipment was defective but it was the fault of the supplier etc. The employer would still be liable.
Pursuer sues the employer for PI and employer brings in supplier or repairer as third party. If third party is wholly to blame then the third party will pick up the whole tab. The pursuer will succeed against both and can get decree in full against both. So if defender went bankrupt you can get everything from third party even if liability was found to go 50/50 because the pursuer is entitled to go for the whole amount due.
In a situation where defender and third party are found liable the court will apportion blame and in first instance both will due whatever apportion is due in the first instance. Example in:
e.g. Yuille v Daks Simpson 1984 SLT 115
What is the procedure?
This is straight forward.
There is a Motion to allow service
Then third party notice (together with a copy of the pleadings) served on third party within 14 days
Third Party then has a period to lodges answers within the period specified in the Notice (usually 28 days)
Options Hearing fixed and rules in relation to that apply and court has discretion as to how it wants to deal with matters at that stage.
What are the rules on answers?
Answers OCR 20.5
You have to try to as a third party responding, make it clear whose averments you are dealing with at any particular point.
You are entitled to take issue with pursuer’s case against defender. You are entitled to adopt the pursuers position against defender or defenders position against pursuer. You are entitled to take up whatever position is appropriate in the circumstances. There are times when as a third party you would agree with some of the pursuers claims against defender but not in other aspects so must make this clear.
You may equally agree with what defender is saying against pursuer. You do this by saying: with reference to defenders….etc etc…with reference to defenders averments against pursuer, admitted, not known and not admitted, quad ultra denied.
Answer averments of the defender corresponding to the paragraphs of condescendence or to separate statement of facts and if wish averments of the pursuer
Appropriate pleas-in-law
What is adoption by the third party?
This means that you are agreeing with that sides contention against another.
Third party may dispute or adopt pursuer’s averments against defender or some of them
May dispute or adopt defender’s averments against the pursuer or some of them
You can take pursuer to debate against defender as, as a third party, if pursuer doesn’t succeed against defender then you have nothing to worry about, unless pursuer adopts the case of defender against you.
Preliminary pleas against either
What is adoption by the pursuer?
Third party could be in the position where the pursuer could lose against defender but still succeed against the third party. If you are pursuer and the defender brings in a third party and then if the pursuer wants to succeed against a third party you must adopt the case that the defender makes against the third party. If you don’t then you can’t succeed against the third party. If you are time barred then you can’t go against the third party either. Be careful about time limits.
If the pursuer wants to make a case against the third party he can amend to add a crave (or alter the crave against the defender) and add averments and pleas in law directed against the third party. Again, pleas in law do not apply to new personal injuries procedures.
The question as to whether or not to adopt the case is difficult.
If going to succeed against defender then no need to adopt a case against third party. Equally if you are going to lose then you are not going to win against third party either.
Only need to adopt if you are at risk of not succeeding against the defender but might still succeed against third party if you had a case against them.
It is this situation that you might consider adopting a case.
For example say pursuer originally sued the vehicle which slowed down suddenly and came to a stop if it turned out on the facts that a dog went out in front of the car which justifies the decision then you might want to adopt the case against the third party in order to be sure of succeeding against someone. Remember, if you want to get decree against a third party you need a joint and several crave and appropriate averments.
After answers are lodged an options hearing is fixed. At the options hearing the sheriff may grant decree or such other order as he thinks fit and the decision can be made then whether to separate proof e.g. Pursuer against defender and pursuer against third party. This does not happen often as usually similar evidence will be heard in both but could be appropriate if separate issues are involved. This allows flexibility for the court tot make a pragmatic decision about what would be sensible.
A decree against a third party is extractable in the same way. In other words in order to enforce the decree you still have to extract it and do diligence on it.
Decision needs consideration because if don’t then cannot obtain decree against third party but if do may have consequences in expenses
If going to succeed against defender then no need to adopt
If time barred, cannot adopt
Farstad Supply AS v Enviroco Ltd 2010 SC (UKSC) 87
In this case an oil rig supply vessel was damaged by fire. She was owned by pursuer and was under charter to the third party. The third party had engaged enviroco to clean out some tanks of the vessel. On third party’s instructions the master of the vessel started up engines and at same time employee opened valve releasing oil near hot machinery, it ignited and caused the fire. The pursuer sued the defender for negligence. The defender averred that if it was liable to the pursuer it was entitled to contribution from the third party under s3(2) of 1940 act. It was agreed that if the defender was entitled to such a contribution then the third party would at least be entitled to an indemnity from the pursuer under clause in charter party. The supreme court held that the question under s3(2) of 1940 act was whether if the third party had been sued by the pursuer, it would have been liable to the pursuer. The answer to this was the same as it would have been if the owner had sued both the defender and third party and the case had fallen within s3(1) rather than (2). The answer depended upon whether the third party would have had a defence under the claim to the charter party. Any liability of the third party to the pursuer in negligence or based on negligence was excluded by clause in charter party and therefore appeal was allowed.
