CASES MUST BE DECIDED ON EVIDENCE RATHER THAN PREJUDICE: JUDGE TELLING COUNSEL TO “GET A LIFE” MAY INDICATE PREJUDGMENT

In Vassilliou -v- The NFU Mutual Insurance Society Limited (Central London County Court 9th July 2018) Mr Recorder Cohen Q.C. allowed an appeal by a claimant.  He held that issues of mitigation of loss can only relate to matters that have arisen since the accident.  He expressed significant concerns about the way in which the claim had been conducted by the Deputy District Judge that conducted the original hearing.

“all litigants are entitled to a fair hearing of their cases which must be decided on the evidence rather than prejudice.

THE CASE

The claimant was driving a hire vehicle which was damaged in an accident. The claimant was liable, under the hire agreement, to pay the hirer the hire charges even when the hire car was off the road. He sought to recover those charges from the defendant negligent driver.

THE FINDING OF THE DISTRICT JUDGE

The District Judge found for the defendant on the grounds that the claimant should never have entered into this term of the hire agreement (for the car he was hiring that was damaged by the defendant).  The judge found that the claimant had failed to mitigate his loss by entering into that agreement, or failing to challenge the validity of that agreement.

THE RECORDER’S OBSERVATIONS ON APPEAL

On appeal the Recorder considered the law relating to mitigation of loss and the burden of proof.

18. In my judgment, the following propositions are correct:
i) First of all, where a mitigation argument is raised, the onus in respect of that mitigation argument to prove that the conduct of the claimant was not reasonable is on the party that raises it, that is the defendant. The onus is not upon the claimant. I have put this proposition to counsel and both, as they must, accept that it is correct. This proposition of itself leads to an extraordinary feature of the defence. The defence was not complaining about conduct of Mr. Vassilliou in actions taken between the date of the negligence and the defence being served. It was actually complaining about the entry into the Hire Contract which had been done before the tort was committed. It was not complaining of any action of or failure by Mr. Vassilliou in his conduct up until notice was given of these points, that is to say on the date the Defence was served. The mitigation allegedly required must have been after the Defence and before the trial.
ii) Secondly, the ordinary principle of mitigation by which the court will be guided is that where a party says, “You have failed to mitigate because you have failed to litigate”, the victim generally will not be required to enter into hazardous or costly litigation at all. This is not a rule of law but an example of the principle that a party is only required to do what is reasonable in the circumstances to mitigate and a requirement to litigate is not usually regarded as reasonable. Perhaps it may be otherwise if what is proposed can fairly be regarded as simple and clear litigation or if an indemnity is proffered by the party that says that ought to be pursued. Even in those circumstances, it does not necessarily follow that it is the duty of a victim of a tort to litigate; it is circumstance dependent. I remind myself that there may be exceptions where well-resourced parties such as banks or building societies may be obliged to enter into straightforward, routine litigation such as possession proceedings on a mortgage. But if the litigation is characterised by the court as difficult or not routine, it must be a very rare case in which the court will say that there has been a failure to mitigate because there has been a failure to litigate.

 

THE DISTRICT JUDGE’S FINDINGS: “YOU ARE HAVING A LAUGH”: JUDGE SHOULD HAVE BASED FINDINGS ON EVIDENCE AND NOTHING ELSE

The Recorder also consider the District Judge’s assessment of the “evidence” in relation to the claim.

26. In the District Judge’s judgment, to which I have been referred, I have found no basis in the evidence on which the District Judge was able to find, as he did in paragraph 12, that “I am of the clear view that the rate was disproportionate, that being the contractual rate”. He gave reasons, one of them being, “You are having a laugh”. As I see it, the evidence before the District Judge was that Mr Vassilliou as a hirer at arm’s length in a hire contract which pre-dated and had nothing to do with the commission of this tort, had entered into this contract. It entirely the wrong approach for the District Judge to have said, both from his own personal knowledge and from sitting on hundreds of these cases, that it would be wrong to conclude otherwise than that the rate was vastly inflated. It is a fundamental principle of our system of justice that cases are decided on the evidence which is actually before the court and not on the basis of what the judge “knows” or even from the evidence adduced in hundreds of other cases. This approach would lead to decisions which are not based on the evidence before the court and are therefore fairly described as prejudiced or biased.
27. As long ago as the 1860s the House of Lords pointed out in rather graphic language that even a robber is entitled to a fair trial and is not to be robbed. In this case there is no criticism of Mr. Vassilliou himself or of his conduct which I see as proper. I cannot accept paragraph 12 of the District Judge’s judgment as being support by the evidence before him.

THE DISTRICT JUDGE’S FLAWED REASONING IN RELATION TO MITIGATION OF LOSS

8. I should mention one other thing. The argument which was being raised before the District Judge was effectively one of a failure to mitigate. This was dealt with really inside two or three lines of paragraph 14 of the District Judge’s judgment where he says, after saying he would dismiss the claim,
“There has been a total failure by the claimant to mitigate or indeed address the issues of mitigation. He simply said, ‘I think  it is all right. I am going to pay it’. His solicitors appear to have said, ‘That is fine. You get on and do it’ and he is not able to do that. He cannot pay more than is appropriate. He has to mitigate and he has not, I am afraid, done so.”
29. The problems with this reasoning are these:
i) First of all, there is no reference to the principles of mitigation as I have already set them out. Mitigation was a matter on which the onus was squarely on the defendant to show that reasonable steps had not been taken to reduce or avoid the loss. I cannot see that any fair assessment of the suggested litigation for Mr Vassilliou to have commenced or conducted by way of mitigation can have been regarded as reasonable, the more so in the absence of an offer of an indemnity. There was no weighing of the effect on reasonableness that, as the District Judge himself said, Mr Vassilliou was acting on legal advice.
ii) Secondly, the District Judge’s concerns seem to have been based on the view that the hire contract should never have been entered into. The extraordinary thing is that this is the most atypical case that I can remember seeing. The hire contract already existed at the date of the tort so that its entry had nothing to do with mitigation. The mitigation defence was not complaining of anything which had been done or had been failed to be done between the tort and the date of the defence. It was effectively saying, “Here is an argument for you. Raise it now and litigate it hereafter against your contracting party.”
iii) Thirdly, none of this explains why the District Judge has not awarded the damages which he thought would be proper for the hire charges incurred by Mr Vassilliou at a rate which he thought was reasonable. The reason can only be that there was no evidence on what was a reasonable rate. This is the very reason he could not properly have concluded that the contractual rate was unreasonable. The onus to show that was on the defendant insurer as the party alleging a failure to mitigate

CONCERNS ABOUT  THE DISTRICT JUDGE’S CONDUCT OF THE PROCEEDINGS

The Recorder set aside the judgment and awarded damages in the full sum claims. The judgment contains an extraordinary “coda”

32. I regret that before leaving this judgment that I must return again to the significant concern that I have already expressed about the District Judge’s conduct of the proceedings before him. I have read the transcript of the proceedings in full. The District Judge’s manner of dealing with the matter has caused me considerable concern in several respects. The District Judge appears to have wanted the claimant to give evidence when, very sensibly, neither party thought it was necessary and indeed it is difficult to see why, in the absence of a pleaded factual point on mitigation which required his evidence, that he should have done so. The District Judge expresse himself in intemperate and unfortunate terms at various stages of the hearing. I quote one of them at page 7 of the transcript as an illustration. When addressing counsel for the claimant he said:
“Get a life. I mean, who would sign an agreement like this knowing that they had to pay? Nobody would.
33. A remark by a judge telling counsel to “get a life” is not to be expected from a judge in a court room. A court might, of course, be entitled to take the view that the hire agreement could not have been sensibly signed after it had heard evidence and after it had heard argument on a point properly before the Court. No such point was before the Court and there was absolutely no evidence from the defendant insurer to be considered. Even the way in which the substantive point was expressed by the District Judge might well be considered to be indicative of pre-judgment, the more so when taken in the context of the offensive remark to counsel which preceded it.
34. The passage just quoted was at an early stage of the proceedings and it advanced a view which is found elsewhere both in the transcript and in the judgment that there was something wrong with Helphire. The District Judge on this occasion, I am sorry to say, had forgotten that all litigants are entitled to a fair hearing of their cases which must be decided on the evidence rather than prejudice. In starting without evidence or argument or even a pleaded point that Helphire and its contracts were disreputable, the District Judge was stepping outside the evidence and was deciding the case on the basis of prejudice or bias. I am not satisfied that a fair trial occurred on this occasion.
35. As I have already indicated, I am not allowing the appeal on these process grounds because, in the event, I am able, without sending the matter back for a fresh trial, to decide the matter. But I feel bound to say that I am sorry to have read the judgment and transcript of the proceedings.