Home / Insight / Client Alert: Willis v Phillips, Court of Appeal, 22 March 2016

Client Alert: Willis v Phillips, Court of Appeal, 22 March 2016

11/04/2016

This was a case which began life in the MoJ portal process via Winn Solicitors. During the course of the claim personal injury damages were agreed leaving only the hire claim outstanding.

As the claim did not settle at Stage 2 the matter proceeded to Stage 3 with the appellant requesting an oral hearing in order that counsel for the respective parties could make submissions to the court.

The defendant had adduced no written or documentary evidence and their comments at Stage 2 stated that the only issue in dispute was rate of hire.

The claimant had adduced evidence as to the rate of hire at Stage 2, which was from a manager at On Hire.

The First Hearing

At court, prior to the Stage 3 hearing, the claimant’s and defendant’s respective counsel had agreed that the sole issue was one of rate, with impecuniosity having been conceded outside by the claimant.

District Judge Howard determined that he required to hear evidence from the claimant and removed the case from the portal process, allocated it to the small claims track and set out standard credit hire directions to assist with determination of all possible issues, not just the one which was requested to be determined before him.

Winn Solicitors appealed that decision and the matter went before HHJ Freedman in Newcastle.

The First Appeal – Tuesday 8th July 2014

HHJ Freedman correctly determined that the issue was about the applicability of CPR 8B PD7.2, dealing with the judge’s discretion to require further evidence and that the issue was not suitable to proceed in the portal. In HHJ Freedman's judgment, DJ Howard had been attempting to apply CPR 8B PD7.2, although he had not specifically stated this or referred to it in his judgment. On that basis, the order of District Judge Howard was upheld.

The Second Appeal

Winn Solicitors sought a further appeal for which permission was granted, on the basis that this case had significant importance to the portal process and the market. Permission for a second appeal will normally only be granted where it is considered there are wider implications than the facts of one particular case. Winns indicated that thousands of cases were affected by this decision.

Winns then sought to amend their Grounds of Appeal and skeleton argument so that by the time the matter came to be heard, they were on their third set of pleadings, changing their case dramatically from what was submitted to the court at the permission stage.

In a further twist, an offer was made by Winn Solicitors to compromise the matter, imposing a very short timescale for response. At the same juncture the respondent was in the process of changing counsel and a conference had to be arranged. Acceptance of the offer was then prohibited by Winns unless the parties (including the insurer concerned) agreed to a contract that would prohibit any claim from exiting the portal. This was of course an untenable position and an unreasonable stance for the appellants to take.

After the three amended Grounds of Appeal supplied by the appellant, the matter finally fell to be determined by the Court of Appeal’s bench of LJ Jackson, LJ Floyd and LJ Macur.

It was clear from the outset that the Court of Appeal felt that this case was on a “narrow compass” and that they were dealing with one issue only; whether the Judge had and should have applied CPR 8B PD7.2.

The appellant sought to argue that the judge had acted in a totally disproportionate fashion and that he had not made his decision with reference to CPR 8B PD7.2 and despite HHJ Freedman’s assessment that CPR 8B PD7.2 was at the forefront of the judge's mind, the judge went beyond his discretion under that part of the CPR in ordering that the matter exit the portal process.

There were overt attempts by appellant's counsel to obtain ratification from the bench of the Mullholland appeal (also in front of HHJ Freedman and which states that only issues put in dispute by the defendant at Stage 2 can be considered at any Stage 3 hearing) however those were given short shrift with the Court reiterating that they were dealing with this set of facts alone.

The respondent's arguments were based on the wide discretion of the Judge in case management and that he had the power to act as he did. The point of the respondent's argument was that prior to Stevens v Equity, the District Judge may well have concluded that he needed evidence to determine the correct rate to apply, but post Stevens it is clear that the test is purely objective. On that basis he had the power to do as he saw fit under CPR 8B PD7.2. If that were not enough then CPR8.13 would have been of assistance, as it is of similar function but drafted wider than the previous rule.

The respondent’s counsel then tried to deal with the wider issues and the apparent difference within the portal rules to opt for Part 7 proceedings when there are only additional damages left and the stipulation that there is no requirement to bring additional elements into the process when the personal injury claim settles within Stage 2.

Again Jackson LJ made it clear that there would be no wider thesis or, as he termed it, an “essay”on the protocol. The decision would deal with the particular facts of this case. Lady Justice Macur reiterated that the current Grounds of Appeal which were now being considered nor the submissions made on the day did not seek to argue for any wider implication.

The Judgment

Jackson LJ gave the lead judgment.

In short the District Judge did not have the discretion to require further evidence in the particular facts of this case. The dispute was for at best a thousand pounds. It was not proportionate to require the parties to attend a further hearing with a hearing fee. The District Judge had the evidence from the claimant and the defendant had not served any evidence within the portal. The rules in Part 8B, which deal with Stage 3 hearings, are clear. Unless evidence is filed in accordance with the CPR, the parties could not rely upon anything further. Both parties’ counsel were there ready to determine the matter, but they never got chance to make submissions. The judge’s decision was irrational and the appeal should be allowed.

In relation to costs the appellant submitted a costs schedule, on which Floyd LJ agreed with the respondent - that this was not a two-counsel matter given the very discrete issue involved. The respondent submitted that they had sought to avoid the appeal by agreeing the appellant’s proposal, however their response was to effectively seek a concession in full with the additional element of a confidential agreement to bind the insurer to a compromising position in the future.

In light of the submissions made, costs were summarily assessed and almost halved.

What does this mean for insurers?

The Court was at great pains to limit this case to the peculiar set of facts, accordingly from the respondent’s perspective, who had an objective of avoiding a judgment which said all hire claims MUST go through the portal, it was a successful outcome.

The judgment is limited to these facts only i.e. that the only issue between the parties was the applicable rate of hire and the Judge had the evidence before him to make a decision. Oral evidence from the claimant could have added little, if anything, to the position.

Any interpretation that all claims must go through the portal is inaccurate and wrong. The Court did suggest that there would have to be a significant issue or sum at stake for it to be exited but the rules are clear that there are circumstances where it would be a proper exercise of discretion for the claims to exit the portal process.

What is of importance for insurers is that the Court made it clear that an insurer’s Stage 2 responses are to be treated as pleadings and many insurer handlers are not used to drafting pleadings therefore it is likely that further training/guidance will be required in order to ensure insurers are “portal savvy”.

Keoghs has been working with many clients conducting workshops and assisting them in the development of their MoJ processes. If you would like more information, please contact Melanie Mooney.

Author

Melanie Mooney

Stay informed with Keoghs

Sign-up

Our Expertise

Vr

Claims Technology Solutions

Disrupting claims management with innovation & technology

 

The service you deliver is integral to the success of your business. With the right technology, we can help you to heighten your customer experience, improve underwriting performance, and streamline processes.