WHAT CAN THE DEFENDANT ARGUE ABOUT DAMAGES AFTER A DEFAULT JUDGMENT 2: A CLINICAL NEGLIGENCE CASE
We have looked before at the question of what a defendant can argue in relation to damages after a judgment has been entered. A case reported today examines this issue in relation to judgment in a clinical negligence action.
SYMES -V- ST GEORGE’S HEALTHCARE NHS TRUST
Symes -v- St Georges  EWHC 2505 (QB) was a clinical negligence case arising from a failure to diagnose a lump on the face. The claimant had subsequently developed inoperable lung cancer and only has a short time left to live.
The defendant did not file a defence. Instead it filed a letter headed “limited admission” which admitted negligence but did not admit that the delay in treatment of 90 days had any major impact on outcome. Judgment was subsequently entered in default.
A counter-schedule was subsequently served which admitted causation in part but denied causation in relation to major aspects of the claimant’s claim.
The Master subsequently struck out the counter-claim in part as being incompatible with the claimant’s judgment.
REVIEW OF THE LAW ON THIS ISSUE
On appeal Simon Picken QC, sitting as a Deputy Judge of the High Court, reviewed the case law as to the effect of default judgment in some detail. He held that the principles in Lunnun -v- Singh  CPLR 587 applied, in essence “… on an assessment of damages all issues are open to a defendant save to the extent that they are inconsistent with the earlier determination of the same issue of liability…”
- As Carr J put it in New Century at , the starting point is to look at the Particulars of Claim, which are to be regarded as “a proxy” for the default judgment obtained on 2 July 2013, in order to work out what the default judgment is to be taken as having decided, and whether, therefore, the Defendant is trying to go behind the issues which that default judgment is to be taken as having determined. This approach is consistent with the need, identified by Viscount Radcliffe in Kok Hoong, to scrutinise a default judgment “with extreme particularity” (or, as Lord Maugham LC put it in New Brunswick, “with complete precision”) so as to ascertain “the bare essence of what” it “must necessarily have decided”.
- In answering this critical question, it seems to me that I am bound to follow the approach adopted in Turner and Lunnun , an approach which has been followed in various subsequent cases (specifically, Pugh,Enron, Carbopego, Strachan and New Century) and which is consistent also with the view expressed by Sir Richard Scott V-C in Maes Finance. To adopt any different approach is simply not open to me, any more than it was open to Master Roberts. These are all cases in which the same approach has been adopted, albeit with different outcomes. No case was cited to me where a different approach has been applied. Nor, specifically, I am bound to observe, was any case cited to me in which it has been held that a defendant could not challenge causation in the face of a judgment in default where damages have been ordered to be assessed. Turner and Lunnun (and Carbopego, a non-tort case) were, on the contrary, cases in which it was held that causation could be challenged notwithstanding the relevant judgment, whether a summary judgment (as in Turner) or a judgment in default (as in Lunnun and Carbopego). True, in Turner and Lunnun , the two tort cases, the defendants were precluded from being able to argue that no loss at all was sustained, because such an argument would be inconsistent with a judgment on liability in circumstances where, in a tort context, there has to be some damage caused by the tort for the cause of action to be complete. However, beyond this the defendants were permitted to take issue with causation. That was the actual decision in Turner and Lunnun , and it was also what Sir Richard Scott V-C made clear inMaes Finance, albeit when dealing not with causation but with the question of whether contributory negligence could be advanced in the context of an assessment of damages hearing, in the passage cited by Clarke LJ in Lunnun .
- I am clear, as I say, that, in such circumstances, I must apply the approach explained in Turner and Lunnun , both cases in which damage was a necessary ingredient of the claimant’s cause of action: in Turner, a claim in the tort of negligence; and in Lunnun , a claim in nuisance. Authorities such as Pugh and New Century, in contrast, were concerned with very different allegations made by the claimants (in each case, the claims were not in tort but for breach of contracts of employment), and the defendants were attempting to advance arguments which went to the question of breach of contract. They were not cases in which the issue was causation, nor were they tort cases where, without damage caused by the relevant breach of duty, there is no cause of action at all. These authorities are, therefore, of only limited assistance in relation to the question which I have to decide.
- As I have pointed out, Mr Skelton himself recognises that, in the context of the assessment of damages phase of the proceedings, it is open to the Defendant to advance arguments that the Claimant ought not to be permitted to recover to the extent of the amounts claimed. His submission is that that type of causation point falls the assessment of damages side of the line, whereas other types of causation issue are part and parcel of liability and, as such, are caught by the default judgment. In advancing this submission, Mr Skelton is acknowledging that not all causation issues have been determined by the default judgment and that, to that extent, Mr Stagg’s argument is right. What Mr Skelton submits, however, is that it is not open to Mr Stagg simply to say (in an echo of Mr Exall’s successful submission in Lunnun ) that the default judgment is to be regarded as merely having determined that the Claimant suffered ‘some damage’ as a result of the Defendant’s negligence because nowhere in the Particulars of Claim in this case does the Claimant allege that he suffered merely ‘some damage’; on the contrary, the Particulars of Claim are specific as to the damage which the Claimant alleges that he has suffered. Therefore, Mr Skelton submits, viewing the Particulars of Claim as a proxy for the default judgment, the damage which is necessary in order for there to be a cause of action must be the damage alleged in the Particulars of Claim and not some vague (and, indeed, unpleaded) allegation that the Claimant suffered ‘some damage’.
- As a matter of principle, it seems to me that there is something to be said for this last submission. Matters might be different if the Particulars of Claim had not specified the consequences of the breaches of duty alleged by the Claimant. However, paragraphs 24 to 26 of the Particulars of Claim are specific. This is not, therefore, a case in which the Claimant can be taken as having alleged in the Particulars of Claim that he had suffered merely ‘some damage’. However, in my judgment, there are two difficulties with the submission which mean that it is not a submission which I can accept: the first a difficulty based on authority; the second a difficulty based on the fact that, in paragraphs 24 to 26 (specifically in paragraph 26 actually), the Claimant has alleged three consequences, the first of which (that the Claimant “would not have suffered the pain and discomfort associated with his developing tumour between then and his eventual operation 19th May 2009″: see sub-paragraph (a)) the Defendant accepts was caused by the breaches of duty alleged.
- As to the difficulty presented by authority, it was not stated in Turner by Simon Brown LJ that the “some injury” which a defendant “must acknowledge … to a plaintiff before judgment could properly be entered against” the defendant (Turner being a summary judgment case rather than a default judgment case) had to be the actual injury which the claimant was himself alleging. More significantly, however, given that Turner is only a brief judgment and was only concerned with an application for permission to appeal, in Lunnun Clarke LJ, having cited from Sir Richard Scott V-C’s judgment in Maes Finance, went on to say that “Moreover” the defendant may still argue that its acts or omissions were not causative of any particular items of alleged loss “even if the statement of the claim alleges a particular item was caused by the tort”. In other words, as I understand it, Clarke LJ was making the point that it does not matter that the claimant’s statement of case alleges that particular losses were caused: the defendant can argue that, whilst ‘some damage’ was caused, it was not the damage alleged by the claimant in his statement of case.
- It is notable, in this context, that Clarke LJ went on to explain how, on the facts of the nuisance case which he was considering, the defendant could not challenge that water and sewage had escaped into the claimant’s property and that damage had thereby been caused, but that the defendant could dispute how much leakage there had been, how much damage that leakage had caused, and what loss the claimant had suffered as a result. This is consistent, as I see it, with Clarke LJ adopting an approach which requires simply that the defendant recognises that ‘some damage’ has been caused, and not that the defendant should be taken as having accepted that the actual damage alleged by the claimant in his statement of case has been caused by the breach of duty alleged. Neither Jonathan Parker J nor Peter Gibson LJ suggested otherwise, and I consider that I am bound by what Clarke LJ had to say on this issue.
- I might add that I am not persuaded by Mr Skelton’s suggestion that Turner and Lunnun are authorities which do not apply in the clinical negligence context. Clinical negligence claims are claims in negligence. As such, damage is a necessary ingredient of the cause of action in a road traffic claim (as in Turner) just as much as (but no more than) in relation to a clinical negligence claim. I see no justification for treating the two types of negligence claims differently, and I decline to do so. Nor do I consider that Mr Skelton’s description of clinical negligence practice (a description which is, anyway, challenged by Mr Stagg) really assists me in relation to what is, in the context of the present issue, a question of what is required to make good a negligence claim as a matter of substance rather than as a matter of practice.
- Nor am I at all convinced by Mr Skelton’s point that the position described in Turner and Lunnun is no longer the position under the CPR since (as Master Roberts observed in the case of Turner: see his judgment at ) these are authorities which pre-date the introduction of the CPR. That plainly is not the case in view of various authorities which have followed Lunnun under the CPR regime: Pugh, Enron,Carbopego, Strachan and New Century being examples of such cases.
- Even if all the above is wrong, however, and there is a need for the damage determined by the default judgment to have been damage which the Claimant has alleged in his statement of case (the proxy for the default judgment), and not merely that the Claimant has suffered ‘some damage’ without reference to how the Claimant has himself put his case, it seems to me that in the present case the answer, as far as the Defendant is concerned, is that the Defendant does accept that the Claimant has suffered at least some of the damage which the Claimant has himself alleged in the Particulars of Claim. This is because, as I have pointed out already, the Defendant does not take issue in its Counter-Schedule with the first of the causation contentions made in paragraph 26 of the Particulars of Claim, namely that the Claimant “would not have suffered the pain and discomfort associated with his developing tumour between” the date when his operation should have taken place (identified as mid-February 2009) “and his eventual operation 19th May 2009″ (see sub-paragraph (a)). This is apparent from the passage from the Counter-Schedule to which I have referred in paragraph 22 above, where the Defendant states that “save for any additional pain and suffering which the Claimant experienced during the period of 90 days that the surgery was delayed (and for which no analgesia was prescribed by the Claimant’s GP), no other loss or damage arises in consequence of the admitted delay”. Admittedly, the Defendant takes issue with the amount of damages which might be awardable in respect of this period, but that is an aspect which, even on Mr Skelton’s approach, it is open to the Defendant to maintain because it is, as he accepts, in the category of “causation issues that form part of the quantum case”.
- The significance of the Defendant’s acceptance that, by reason of its negligence, the Claimant has suffered not merely ‘some damage’ but some of the actual damage which the Claimant has himself alleged in the Particulars of Claim is that, as I see it, even if Mr Skelton is right and it is not open to a defendant to admit to damage which has not been alleged, this is, anyway, not such a case. In consequence, unless it can be said that the default judgment represents a decision that all of the damage alleged by the Claimant was suffered by him as a result of the Defendant’s negligence, as opposed to some of the damage alleged (as opposed to merely ‘some damage’ which has not been alleged by the Claimant), then, it must be open to the Defendant to advance its causation objections to the other aspects of damage alleged by the Claimant. However, I do not myself see any justification for a conclusion that the default judgment covers all the damage alleged in paragraph 26 of the Particulars of Claim, specifically in sub-paragraphs (b) and (c) (and, therefore, the matters listed by Master Roberts in his judgment at : see paragraph 49 above). Applying the Turner and Lunnun approach, and scrutinising the default judgment “with extreme particularity” and “with complete precision” so as to ascertain “the bare essence of what they must necessarily have decided”, as required by Kok Hoong and New Brunswick, I do not consider it appropriate to reach such a conclusion. It is sufficient that some of the damage alleged by the Claimant is damage with which the Defendant does not take issue, since this means that the liability alleged by the Claimant in the Particulars of Claim (and established in the default judgment using the Particulars of Claim as a proxy) has been made out. It is not necessary for liability to have been established that all the damage alleged in the Particulars of Claim should have been determined by the default judgment to have been sustained by reason of the Defendant’s negligence.
- I should say that I do not consider that this involves the Defendant (rather than the Court or the Claimant) having “the power to determine the ambit of the default judgment insofar as it determines issues of liability”, as Mr Skelton suggests. It seems to me that it is simply the consequence of having to use the Particulars of Claim to discern what the default judgment should be taken as having determined in relation to a claim in negligence which requires there merely to be ‘some damage’ for the cause of action to exist. It is worth having in mind, in this connection, that it would presumably have been open to the Claimant to have sought, by means of an appropriate application to Master Roberts, to define in the default judgment what damage was caused by the defendant’s breach of duty. Had that been done, there would have been what Mr Skelton describes as the “forensic certainty” which he suggests is necessary. This was not, however, done, and the consequence, as it seems to me, consistent with Turner and Lunnun , is that the default judgment should be regarded as having determined merely that there was ‘some damage’, whether (as I am inclined to think ought to be the case, purely as a matter of principle and, I stress, were I viewing matters free from authority) that is in the categories of damage alleged in the Particulars of Claim or (in line with Turner and Lunnun , and so applying the approach which, in my view, authority demands) that is any damage (whether alleged in the Particulars of Claim or not).
- In these circumstances, and for these reasons, I conclude that the Defendant’s submissions in relation to this issue are right, and that Master Roberts was wrong to have reached the conclusion which he did. This is, therefore, a case in which CPR 52.11(3)(a) applies. However, this does not entirely dispose of the appeal because it is apparent from his judgment that Master Roberts based his ultimate conclusion not only on the effect of the default judgment but also on his view that the Defendant had acted in breach of the CPR and contrary to the Overriding Objective. It is this matter which I now come on to address.
THE CIVIL PROCEDURE RULES
The Master held that the judgment was definitive because a defendant was obliged to file a comprehensive defence to all alelgations and had failed to do so. Further the defendant’s failure led to case management and costs budgeting implications. The judge considered this issue.
- Master Roberts was wrong to take the view that the Defendant had acted in breach of the CPR and contrary to the Overriding Objective by, in particular, not serving a Defence setting out its case on causation. Although I am clear that the situation which has arisen in the present case is very much to be regretted, and should be avoided in the future, nevertheless I do not consider that this is a case in which it is right to characterise the Defendant as having acted in breach of the CPR or contrary to the Overriding Objective.
- As to the CPR, in view of the conclusion which I have reached in relation to the effect of the default judgment, it follows that, unless there is anything in the CPR which precludes the Defendant from contesting issues of causation in the context of an assessment of damages hearing after a default judgment on liability has been obtained, there can be no non-compliance with the CPR in the Defendant doing what it has done in the present case. In this regard, Mr Stagg rightly points out that CPR 12.5(3) and CPR 12.7(2) say absolutely nothing about a defendant being so precluded.
- It follows also from the conclusion which I have reached in relation to the effect of the default judgment that there was no obligation on the part of the Defendant to serve a Defence setting out its case on causation because the Defendant is entitled to advance that case, without having previously pleaded causation in a Defence, in the context of the assessment of damages process which Master Roberts directed should follow entry of the default judgment. In such circumstances, there being no obligation to serve a Defence, it seems to me that Mr Skelton’s (and Master Roberts’s) reliance on CPR 16.5 and 16PD12.1 is misplaced: if it is open to the Defendant to advance its causation case in the context of the assessment of damages phase (post-default judgment), such that there was no necessity for the Defendant to serve a Defence, then, what a Defence, had one been served, should have contained is neither here nor there. In the circumstances, I do not consider it right for Master Roberts to say, echoing what Carr J had to say in New Century at , that the Defendant has acted in a manner which “is tantamount to an abuse of process by way of a back door attempt to challenge the judgment” (Judgment, ): the Defendant was not obliged to serve a Defence and so it is not appropriate to speak in terms of abuse of process, or of ‘back door’ attempts having been made by the Defendant, or of the Defendant having sought to act in a way which is “contrary to natural justice” (as suggested by Mr Skelton in paragraphs 42 and 43 of his Skeleton Argument).
- As to Mr Skelton’s reliance on what he describes as the practice in the field of clinical negligence, Mr Stagg does not accept that what Mr Skelton had to say was the universal practice adopted by practitioners. Mr Skelton himself acknowledges that there is no evidence, as such, before me either way. It seems to me, in any event, that what I need to consider is not a (disputed) description of practice, but what the CPR require since the CPR contain the regime which the Rules Committee have required parties to abide by. Unless and until revisions are made to the CPR in order to reflect what Mr Skelton suggests is clinical negligence practice, in my view, it would be wrong for me to look elsewhere for assistance on the current issue.
IT WOULD, HOWEVER, BE PREFERABLE IF A DEFENCE HAD BEEN SERVED
- I should make it clear that I speak above in terms of there being no necessity for the Defendant to have served a Defence in the present case because it seems to me that it is only if it was necessary that the Defendant should have served a Defence, or if there was an obligation on the part of the Defendant to serve a Defence, that CPR 16.5 and 16PD12.1 come into play. I should, however, observe that it would have been more sensible in this case if the Defendant had served a Defence. Had this been done, despite the fact that it was not necessary for it to have been done, then the difficulties which have arisen would have been avoided. Specifically, it would have been apparent to Master Roberts, when deciding whether to enter the default judgment and anyway when considering what directions were appropriate last October, that the Defendant was advancing a causation case which, in the event, did not emerge in any Court-related document until service of the Defendant’s Counter-Schedule earlier this year. (I leave aside, for present purposes, the point that the Claimant’s solicitors knew that the Defendant was under the impression throughout that the causation case was open to it, and that they believed that the Defendant was making a mistake in not serving a Defence).
- In short, whatever the formal position, in terms of whether the Defendant was obliged to serve a Defence, in my view, the better course would have been to have served a Defence. That, it seems to me, is what ought generally to happen in cases such as the present – not because it is strictly necessary that this be done, but because it avoids the type of difficulties which have arisen in this case and about which Master Roberts was understandably so concerned. The fact that these difficulties have been caused in the present case by the Defendant not serving a Defence does not mean, however, that the Defendant has acted in breach of the CPR by not serving a Defence. If and insofar as Master Roberts was suggesting otherwise at , ,  and  of his judgment, then, in my judgment, he was mistaken.
- I consider that the same applies to Master Roberts’s reliance on the Overriding Objective, and Mr Skelton’s similar reliance on the Overriding Objective in argument before me. I readily acknowledge that, as Mr Skelton rightly points out, the Overriding Objective requires that cases are dealt with justly and at proportionate cost (CPR 1.1(1)), and that this includes enforcing compliance with rules, practice directions and orders (CPR 1.1(2)(f)). However, in the light of my conclusion in relation to the effect of the default judgment and in view also of my further (related) conclusion that the Defendant was under no obligation to serve a Defence in this case, I struggle to see how it can be right to conclude that the Defendant has acted in a way which is contrary to the Overriding Objective, in particular in the various respects identified by Mr Skelton. This applies also to Mr Skelton’s reliance on CPR 1.3 (the requirement that parties should help the Court to further the Overriding Objective), as well as CPR 1.4(1) and CPR 1.4(2) (identification of the issues in dispute in the context of active case management).
- In the present case, the Defendant was under the impression that it had done what was required and, in particular, that the directions which were agreed with the Claimant, and embodied in the consent order made by Master Roberts on 18 October 2013, covered the issues which the Defendant believed were in dispute after the obtaining of the default judgment. Strictly, as I have held, the Defendant was right that those issues included the causation issues which were later identified in the Counter-Schedule, and the Claimant was wrong to think otherwise. It is regrettable, in such circumstances, that a list of issues was not prepared for the purposes of the October CMC, since such a list would have highlighted that there was a difference in view between the parties as to what the outstanding issues were, but I was told by Mr Skelton that no such list was prepared given that the parties had managed to agree directions (without, in doing so, discussing, at least with any precision, what the outstanding issues were), and so no hearing actually took place before Master Roberts. Be that as it may, in the circumstances, I do not consider that the criticism levelled at the Defendant by Mr Skelton (and Master Roberts) is justified.
- The position might be different if this had been a case in which the Defendant had done nothing at all and had, instead, simply allowed the default judgment to be entered without engaging with the Claimant, whether before or after commencement of proceedings: if, as Master Roberts put it in the judgment at , the Defendant had simply ignored the Particulars of Claim. In the present case, however, there was what Mr Stagg described as a “history”, in which Bevan Brittan had sent their “LIMITED ADMISSION” letter on 10 October 2011 (well before proceedings were commenced) and in which there had been a telephone conversation between solicitors on 5 June 2013, which specifically concerned the defendant’s intended response to service of the proceedings and in which (consistent with the “ADMISSION” letter the same day, albeit that that was apparently not received) Bevan Brittan had made it clear what the Defendant’s position was and, in particular, although in general terms, that the Defendant intended running the case which ultimately came to be set out in the Counter-Schedule served earlier this year.
- Had none of this happened, and the position had been that the Defendant had simply said and done nothing, so that the Claimant was wholly in the dark as to what its stance was, there might be more substance in the criticisms made by Mr Skelton and Master Roberts. That is not, however, what happened. In fact, as Mr Skelton very candidly and fairly admitted, the Claimant’s solicitors knew all along that the Defendant intended running a causation case like that set out in the Counter-Schedule and that the Defendant was under the impression throughout that that causation case was open to it; apparently Cogent considered that the Defendant was making a mistake in choosing, in such circumstances, not to serve a Defence. Although I recognise that it was not for Cogent to tell Bevan Brittan how to conduct their client’s (the Defendant’s) case, this does nevertheless serve to underline the fact that the Defendant’s Counter-Schedule was not some sort of unexpected ambush.
- As I see it, the fact that Cogent knew that the Defendant was under the impression that it was open to it to advance the causation case which ultimately came to be set out in the Counter-Schedule also somewhat undermines Mr Skelton’s point that the Defendant is to be criticised for not helping the Court further the Overriding Objective (CPR 1.3) and not assisting in the identification of the issues in dispute in the context of active case management (CPR 1.4(1) and CPR 1.4(2)). It seems to me that these are criticisms which, if they have validity as against the Defendant, might very well also have validity as against the Claimant. The Claimant, after all, knew that the Defendant was intending to advance a causation case which, according to the Claimant (or his solicitors at least), it was not open to the Defendant to put forward. Effective case management in this case could, and would, in the circumstances, have been achieved had both parties identified for Master Roberts’s benefit what, specifically, were the issues in dispute. This was, regrettably, not done by either side – with the consequences which have ensued, including, most sadly, the fact that the Claimant, who has limited time to live, remains in doubt as to what the outcome of these proceedings will ultimately be.
- This illustrates the point that a judgment is not definitive on all issues relating to damages (and even contributory negligence).
- It would be prudent for a defendant admitting liability, but disputing issues of causation, to file a defence setting out what its case is.