PROVING THINGS 69: SOLICITORS EVIDENCE OF (THEIR OWN) LOSS “WHOLLY INADEQUATE”: IMPORTANT POINTS ABOUT DELAY TOO

October 31, 2017 · by · in Avoiding negligence claims, Civil evidence, Damages, Witness statements

This blog often reports on cases where a party fails to appreciate the scope and depth of evidence needed to prove a claim for damages. This issue arose in the judgment today in  Hersi & Co Solicitors, R (On the Application Of) v The Lord Chancellor [2017] EWHC 2667 (TCC).  The assertion of a loss, without evidence or documentation, meant there was no basis on which the court could have awarded damages.

 

“With considerable understatement, Mr Westgate described the evidence referred to above as “concise”. Given that there was no other evidence on damages, I would describe it in a rather different way: in my view, it was wholly inadequate to support the pleaded damages claim. Thus, there was no evidence before the court at the time of the trial which could have supported any special damages claim whatsoever. There was therefore nothing for the court to adjourn to a later date.”

“In my view this litigation has been conducted in an abysmally slow and haphazard fashion. No regard has been had to the orders of the court, or to the CPR (which contrary to the belief in some quarters, applies to the Administrative Court just as it applies to all other parts of the High Court). The claimant has been in breach of both court orders and the rules.”

THE CASE

The claimant firm of solicitors was seeking a judicial review of the decision not to award it a contract for immigration and asylum work.  Part of the claim included a claim for damages.  The claimant failed on the judicial review application, however Mr Justice Coulson commented both on the paucity of evidence in relation to the claim for damages and the delay there had been in conducting the claim.

THE CLAIM FOR DAMAGES: UNSUPPORTED BY EVIDENCE

10. DAMAGES
  • “On the first day of the trial, which had been set down to deal with all issues of liability and damages, Mr Westgate asked me to rule that the trial be concerned with liability only, with damages being left over to another date. I said that, given that this case had started seven years ago, it was an extraordinary thing for the court to be asked, on the first day of trial, and for the first time, to put off any consideration of damages. I indicated, however that, if this was an agreed course, I would not interfere.
  • I was not told during the trial that this course of action had been agreed; indeed, Mr Taylor had made some strong points about quantum in his written opening. After I had provided the parties with a copy of this Judgment in draft, which dealt with certain points of principle in connection with the damages claim, I was told that an agreement had been reached between the parties outside court just before the start of the trial, although this was ‘subject to the court’s determination’.
  • This is obviously an unfortunate situation and I have considered it carefully. It seems to me that it would be contrary to the overriding objective to leave unanswered the principal issues on damages, provided of course that the claimant would not be prejudiced by my doing so. In my view, the claimant cannot be prejudiced by the observations that follow, because all the points I make arise out of the claimant’s own evidence.
  • First, it should be stressed that, but for the existence of what the claimant must have considered to be an arguable claim for damages, there would have been no purpose or point to these proceedings in the first place. The proceedings were not conducted with sufficient speed to have had any effect upon the procurement exercise itself, so this was always a claim for damages only.
  • Secondly, the damages claim was pleaded by leading and junior counsel (who did not appear at the trial). It is extremely terse. Paragraphs 34 and 35 of the Amended Grounds of Claim allege:
“34. The claimant’s turnover for publically funded cases in the year und eth contract that ended in 2010 was £390,000 from 175 matter starts: £2,228.57 per matter start.
35. The 2010 contracts ran from November 2010 to April 2013, a period of just over two years and four months (2.3 years).
36. The claimant therefore estimates its lost income at £2,228.57 x 850 x 2.33 = £4,413,685.71, at least 50% of which would have been profit.”
  • Thirdly, the only evidence in support of that claim for over £2.2 million can be found in the fourth witness statement of Mr Ahmed Hersi dated 9 August 2013. At paragraph 17 he said:
“Hersi & Co bid for 850 cases. It was expecting to earn about £2300.00 from each case. Therefore, the loss to Hersi & Co is approximately £1.95 a year. For a contract duration of 2.33 years that would be £4.5 million. This is to be reduced by the fact that not all of it would have been profit. And further to be reduced by the fact that not every firm got what it bid for.”
There was no other witness evidence in support of the damages claim. In addition, no documentation of any sort has been disclosed to make good any of the component figures within the claim.
  • With considerable understatement, Mr Westgate described the evidence referred to above as “concise”. Given that there was no other evidence on damages, I would describe it in a rather different way: in my view, it was wholly inadequate to support the pleaded damages claim. Thus, there was no evidence before the court at the time of the trial which could have supported any special damages claim whatsoever. There was therefore nothing for the court to adjourn to a later date.
  • On receipt of the draft judgment, Mr Westgate complained that, if the claimant had known that damages were going to be dealt with, Mr Hersi could have given oral evidence and been cross-examined. That is incorrect for a variety of reasons: not only had the parties agreed well in advance of the trial (and therefore in advance of the conditional agreement) that there would be no oral evidence, but the absence of any detail and any documents to support any of the claimed figures would have been fatal to the damages claim in any event. Mr Hersi could not have given oral evidence in chief on any matter that went beyond his (inadequate) witness statement, so there would have been no need for Mr Taylor to cross-examine him, and nothing to cross-examine him on.”

 

DELAY

Earlier in the judgment the judge commented

 

  1. “I do not propose to set out the procedural history at this stage because, ultimately, it is irrelevant to any consideration of the merits of the claimant’s claim. However, I do deal with it in Section 11 below, in the hope that, in setting out the sorry saga of this case between 2010 and 2016 (when the case was transferred to the TCC), it will come to be regarded as an example of how not to conduct a public procurement challenge.”

This was expanded later in the judgment.
“11. THE PROCEDURAL HISTORY
  • I said at paragraph 3 above that I would return to the procedural history. That is for two reasons. First, it seems to me that the delays in this case were inexcusable; secondly, and more importantly for this purpose, I consider that the claimant’s conduct of this case was wholly unsatisfactory. It cannot be right that in the modern age, a case of this kind can be allowed to take seven years to get to trial.
  • These judicial review proceedings began in November 2010 in the Administrative Court. The claim was attached to, and then uncoupled from, a number of the other cases arising out of the legal aid procurement exercise to which I have referred. Although this is a regular practice in the Administrative Court, in my experience it often causes more trouble than it is worth. I note that, in the end, none of the seven reported cases involving this public procurement were dealt with or heard together.
  • The issue of permission in this case was not dealt with until March 2013, two and a half years after the proceedings began. Even then, Blake J refused permission to bring these proceedings on all grounds except inequality of treatment and the Tideland principle, but he did not grant permission on those grounds either. Instead, he adjourned the permission hearing until after disclosure.
  • A PTR was held in July 2013 and the court made an “unless” order requiring the claimant to file amended proceedings by 2 August 2013. The claimant failed to provide its amended pleading by that date. On one view, the claim should have been struck out then because of the failure to comply with the “unless” order. It appears that no-one even raised that possibility.
  • Thereafter, the claimant did nothing for almost 3 years. In February 2016 the defendant sought to strike out the proceedings. On 2 March 2016, following the hearing of that application in the Administrative Court, the claim was not struck out, although the reasons for that are not clear from the papers I have. Permission to bring judicial review proceedings was granted on that occasion, almost six years after the claim had been commenced. Again, I do not understand how such a delay was permitted to arise. The case was then transferred to the TCC.
  • At the PTR in July 2017, O’Farrell J ordered that a Scott Schedule of the claimant’s comparators be provided by 11 September 2017. The claimant had to provide the relevant information first. It failed to do so. In the end, the Scott Schedule was not provided until 12 October, rendering it all but useless, because neither party had been able to refer to it in their written openings.
  • At the PTR, the claimant was ordered to prepare a trial bundle by 25 September 2017. Again, it failed to do so. Much of that work was instead done by the defendant. Because there was no Scott Schedule, the original trial bundle included the 19 files said to be relevant to the claimant’s comparison exercise.
  • To compound matters, the claimant’s opening should have been provided by 2 October 2017. It was not provided then, although the defendant did provide a helpful opening that far in advance of the trial. The date was subsequently re-jigged by the parties to 12 October 2017, but the claimant’s opening was not provided to the court on that date either. In fact, a copy of it had to be obtained by my clerk from defendant’s counsel on 13 October 2017, the last day before the trial. This was despite the fact that my clerk had sought the claimant’s opening earlier in the week, so everyone knew that the court was keen to see it as soon as possible.
  • In my view this litigation has been conducted in an abysmally slow and haphazard fashion. No regard has been had to the orders of the court, or to the CPR (which contrary to the belief in some quarters, applies to the Administrative Court just as it applies to all other parts of the High Court). The claimant has been in breach of both court orders and the rules. I very much hope that no case ever comes to trial in the TCC again with a 6 year procedural history.”

 

RELATED POSTS: THE PROVING THINGS SERIES

Tags: , , ,