CIVIL PROCEDURE BACK TO BASICS 54: SCHEDULES OF DAMAGES SHOULD NOT BE WORKS OF FICTION

Anyone drafting anything in the litigation process must remain acutely aware that there is real possibility that the document they are drafting will one day be read by a judge.  This is even more likely in relation to a schedule of damages.  It is prudent to avoid guesswork, and essential to avoid “fiction”.

THE SCHEDULE AS A WORK OF FICTION

Anyone responsible for drafting Schedules should read the judgment of  Mr Justice Langstaff in F and S -v- TH [2016] EWHC 1605 (QB).

The thrust of Mr Fewtrell’s cross examination was that the schedule was a fiction. I have little doubt that is the case.”

THE CASE

The claimants were bringing an action for sexual abuse, alleging they had been abused by a (now deceased) cleric.  The judge was considering the claimants application under Section 33 of the Limitation Act 1980.  The claimantsgave evidence.

THE JUDGE’S COMMENTS ON THE SCHEDULES

The defendant did not (indeed could not) challenge the evidence in relation to the alleged abuse. It concentrated upon the claimants’ claim for damages as evidence of prejudice arising from the delay.

  1. However, though the claim concerns sexual abuse, the claim is one for compensation. He put forward a schedule of special damage which initially came to a total of £353,704.60. It was revised in an updated schedule in 2015 to amount to £437,777.90. This included a past loss of earnings just short of £250,000. This was claimed on the basis that if he had not been abused he would in all probability have had a gross income which corresponded with average UK earnings. In support of this the schedule set out the average earnings for each tax year since the Claimant commenced employment, and set against it the income he had actually earned in that year. It claimed the balance. No documentation was provided to vouch any of the figures in respect of any of the income earned (save tax records in respect of one year only in the case of F). It became evident in cross examination that F could not sustain these figures. For instance, it was said that he earned £3,000.53 in the tax year 1985/1986. No document supports this. The fact that the figure descends to pence demonstrates the spurious accuracy being asserted. Between 1993-4 and 1994-5 the income earned was precisely the same in each year (£9,984). This is highly unlikely, particularly if the amounts have to be recollected from memory. Many years are simply labelled “USA” as if no income were forthcoming for the Claimant whilst he was in the USA during the year in question. The income attributed to 2000-1 (£11,700) was less than that which the Claimant had earned in 1996-7, which again was improbable particularly since the consistent evidence of the Claimant was that he had always kept himself busy in work.
  2. The thrust of Mr Fewtrell’s cross examination was that the schedule was a fiction. I have little doubt that is the case. Indeed, the point was recognised on behalf of both Claimants by Ms Gumbel QC who, on the morning after the cross examination in respect of the schedule of special damage in respect of F had concluded withdrew any reliance upon the detail of the schedule. Instead of a claim for over £400,000 in respect of F, and a similar calculation, which I suspect would have been exposed in the same way in respect of S, and which came to a total of over £800,000, she invited me to make the assumption that the abuse established must have been responsible for at least some damage to the ability of the Claimant to earn an income, and invited me to assess this as £25,000 in respect of the first Claimant, and £40,000 in respect of the second, for both past and future loss of earnings. She submitted those were more realistic figures than the figures which those assisting the Claimant had attempted to produce.
  3. F said that the figures were not his. The difficulty for him is that the claim is his. The documentation was verified with a statement of truth. I must take it that the schedule was prepared on his instructions and in accordance with them, and put forward with his authority. I had no evidence it was not.
  4. I cannot ignore the deliberate putting forward of a claim which was grossly inflated, if indeed there was a claim at all, on a basis which was spurious, as though it were true, and doing so in not just one but, in effect, two schedules prepared a couple of years apart. It gives me no confidence in the honesty and reliability of the claim as a whole.

THE CONSEQUENCES

The unreliability of the Schedules was one of the reasons the judge rejected the application under Section 33.

  1. In the light of this evidence, coupled with my view as to the unreliability of the schedule of damage as advanced, I would have found myself unable to award any financial losses directly arising from the abuse, if it occurred. There was no evidence sufficient to discharge the burden, resting on S, to show that he had probably suffered a real loss of income.

 

87… Further, if the claim had been advanced, there are the particular difficulties as to making any award for the financial losses claimed to which I have already pointed, as well as great difficulty assessing general damages for pain, suffering and loss of amenity. This would involve extracting the uncertain contribution made by any such abuse as might have occurred from other factors operating independently upon the mental state of the Claimants. Such are the problems of assessment, and of disentangling a tortious cause from one that involves no breach of duty, that a fair trial of those issues would in my view no longer be possible. Nearer the time it may have been.

 

THIS IS NOT AN AREA OF SATELLITE LITIGATION: SEE MRS JUSTICE YIP

Wright v Satellite Information Services Ltd [2018] EWHC 812 (QB) Mrs Justice Yip

The judge observed that the schedule was incomprehensible to the claimant.

  1. It seems to me that the importance of the schedule of loss is frequently overlooked. This is, or should be, the document that draws together the presentation of the claim. It ought to be presented in an accessible and easy to follow format. The fact that the schedule of loss is required to be supported by a statement of truth highlights the need for it to be readily understandable by the claimant. It also sets out the claim for the defendant and for the trial judge who will come to the case afresh and ought to be able to follow the case from the schedule. This means that it should not simply be a series of calculations. It needs to be supported by sufficient narrative to explain the case being presented by the claimant.
  2. With the exception of the claim for loss of earnings the schedule in this case did not serve that purpose. I note that the Claimant said in cross-examination that he regarded the schedule as similar to a set of accounts prepared by an accountant that he would sign in reliance upon the professional expertise of the drafter. I have some sympathy with that position given the format of the schedule here. However, that is not the right approach. Claimants will be fixed with knowledge of and taken to have certified the truth of the contents. It is very important that lawyers draft the schedule in such a way that the facts to which the client is attesting are clear. Failing to do so is failing in their duty both to the client and to the court.
  3. I note the contrast between the schedule and the counter-schedule in this case. It was immediately apparent to me that the counter-schedule was a well drafted document clearly setting out the Defendant’s case. I note that the counter-schedule was drafted by Ms Foster who was trial counsel. It properly fulfilled its purpose. It does need to be appreciated that schedules and counter-schedules are an essential part of the advocacy in a case. In my view, they need to be drafted by lawyers with sufficient experience and skill to properly present the claim as it will be presented at trial, particularly in a contentious case such as this. This claim and the appeal highlight the dangers of treating the schedule as little more than a number-crunching exercise.

COMPARE AND CONTRAST…

It is interesting to draw a comparison to the judgment of Mr Justice Jay in Hayden -v- Maidstone & Tunbridge Wells NHS Trust [2016] EWHC 3276 illustrates this point. The judge was determining damages for personal injury. He commented on the Schedule and Counter-Schedule.

“The final updated Schedule extends to 89 pages and is far too long. It contains unwarranted discussion, argument and submission. On the other hand, the Defendant’s Counter-Schedule, dated 15th November 2016, is unduly Spartan, and only addresses the Defendant’s best case”

GUIDANCE FROM THE RULES

Guidance is fairly scant. At  PD.16

The Schedule

“4.2  The claimant must attach to his particulars of claim a schedule of details of any past and future expenses and losses which he claims.”

The Counter-Schedule

“12.2  Where the claim is for personal injuries and the claimant has included a schedule of past and future expenses and losses, the defendant should include in or attach to his defence a counter-schedule stating:

(1) which of those items he –

(a) agrees,

(b) disputes, or

(c) neither agrees nor disputes but has no knowledge of, and

(2) where any items are disputed, supplying alternative figures where appropriate”

 

UNRELIABLE SCHEDULES ARE POSITIVELY DAMAGING

Mr Justice Stuart-Smith in Arroyo -v-Equion Energia Limited [2016] EWHC 1699 TCC commented on the claimants’ schedules in a major test case:

“In the event, the Original Schedules of Loss were shown to be quite unreliable and, in many respects, bore little or no relation what had happened or the evidence of the Claimants…
When Snr Mesa (LC54) was asked if he had known that, by his Original Schedule of Loss, he had claimed COP 3.9 billion (roughly equivalent to £1-1.3 million) the look of astonishment on his face was real and unforgettable. His immediate reaction was that perhaps the COP 3.9 billion was “a group loss” and not his loss alone {Day7/25:3}. He was clear in his evidence that he had not known that such sums were being claimed in his name. I accept that evidence. It raises the wider question how the Original Schedules of Loss came to be prepared…
“In the light of the extent to which the case on quantum as set out in the Original Schedules of Loss has been shown to be inaccurate and the ready explanation for such inaccuracies which Leigh Day’s letter provides, I am unable to place any weight upon the Original Schedules of Loss as being an accurate reflection of any losses that the Claimants may have suffered or the causation of those losses, despite the fact of their having been incorporated as part of the Claimants’ pleaded case, backed by a statement of truth. It does not reflect adversely upon the Claimants themselves, since they were not involved in and were not personally responsible for the construct that was placed upon the information they provided or for the fact that the Schedules were put forward as real statements of the Claimants’ factual case and losses.”

Unchecked schedules of damages

NO INSTRUCTIONS FROM THE CLIENT (AND YET THE SOLICITOR SIGNED THE SCHEDULE)

This matter was considered on a much different scale in Brown -v- Haven a case where a solicitor was ordered to pay wasted costs.

The solicitor who had signed the schedule produced a witness statement and was cross-examined on the signature to the Schedule. The judge observed:-

16. It is crystal clear that certainly at the time this lady signed the updated schedule of damages and the statement of truth that she did not have specific instructions. It is clear on the balance of probabilities that the procedure in both Bollin and Amanda Cunliffe is to get a general form of authority from the client and then to sign any documents that they consider to be appropriate and tell the clients that they have done it thereafter. That was the clear evidence I had before me today.

Schedules of Damages, wasted costs and the statement of truth.

SCHEDULES SHOULD HAVE BEEN SORTED IN ADVANCE OF TRIAL

In Redd Factors  -v- Bombadier Transportation [2014] EWCH 3138 (QB) this process clearly went awry.  It illustrates the importance of taking steps, and obtaining directions, which allow the issues in dispute to be identified prior to the trial starting.

THE ISSUES

The action concerned a dispute between two companies about the amount of and liability under invoices and whether there could be a set-off against those invoices.

(The reference to “FIM” is a reference to “Free Issue Material”

tween two companies about the amount of and liability under invoices and whether there could be a set-off against those invoices.

(The reference to “FIM” is a reference to “Free Issue Material”

THE JUDGMENT

Procedural matters
  1. It might have been thought, given the nature of the disputes about invoices and costs incurred in obtaining FIM, that the parties needed to co-operate in the preparation of the case to: identify a list of issues; produce a schedule setting out their respective cases on each disputed invoice; and produce a separate schedule setting out their respective cases on the relevant claims for FIM.
  2. None of these steps had been taken before the trial, and issues wholly unknown and unknowable to the other party surfaced for the first time in cross examination on both sides. The fact that the parties had not any realistic idea of the issues which were going to be raised at the trial was part evidenced by the fact that the time estimate given for the trial was “5 to 10 days“.
  3. In my judgment both sides were to blame for this state of affairs. This is because neither side had suggested, let alone made an application to the Court for: a further case management conference in circumstances where the issues had not crystallised before the previous case management conference; the production of relevant schedules; and a list of issues. It is right to record that the Claimant had requested further information from the Defendant, and had obtained an order to that effect, but the request had not identified the critical need for both parties to set out their respective cases on each relevant disputed matter. It should also be recorded that the Defendant had simply served bundles of invoices (forming 15 of the 26 bundles before me) to evidence the FIM claim.
  4. In these circumstances the only realistic options available to me were either to adjourn the trial and list it again in the future, which would have inconvenienced other Court users and caused further delays for these parties, or to attempt to do the best that I could in the time allowed for the hearing. As it was I took the latter course and I made a number of orders providing for a list of issues and the production of relevant schedules. I also permitted a witness to be recalled to enable him to deal with matters which had arisen in the trial. I also directed the parties to attempt to agree various matters, or produce short submissions setting out their respective contentions. An example of this related to the date on which train seats had been delivered by Primarius to Bombardier, which was relevant to certain claims, and which had not been addressed in the evidence of either party.
  5. In the event the case had been listed to be heard over 8 days, and this meant that it was possible for the parties during the trial to do the work that should have been done before the trial, and for the real issues to be identified. In my judgment permitting the parties to deal with issues in this way was consistent with the approach to the Civil Procedure Rules suggested in Denton v TH White Limited and other cases [2014] EWCA Civ 906 because it enabled the real issues to be identified in circumstances where both parties had been at fault in the pre-trial preparationWhatever the final result there are likely to be costs consequences of the approach taken by the parties to the preparation of this trial.

    Sorting major problems out in the middle of a trial: Schedules and statement of issues should be prepared in advance not during a trial.

THE BEST GUIDANCE GOING

Useful guidance (of universal applicability) can be found in Duncum -v- Churm (HH Judge Harris QC, Oxford County Court 12th September 2014, transcript available on Lawtel).  That case is about costs and Part 36.  Matters did not turn out well for the claimant who turned down a Part 36 offer and was penalised with costs when it was accepted late.  The judge’s observations on the role of those putting forward claims for damages are essential reading.

 It is appropriate to observe that, when composing schedules of damages in personal injury cases, the authors of such schedules will of course put the case towards the top end of the bracket which it may legitimately inhabit. It is tactically unsound to cast a case too low at an early stage and all professional litigators clearly understand that reductions are likely to be necessary from theoretically arguable calculations in order to quantify a realistic view of the value of the claim, in order to negotiate productively, and in order to appear reasonable and thus persuasive should the case come to trial. But there must be a sound and honest evidential basis for an initial schedule. It is not appropriate, as a tactic, to quantify, for example, a case with a true worth of £200,000 at £1,000,000, five times as much. This is because questions of honesty apart, which are of course important, such a discrepancy will be unsupported by evidence and will go far beyond putting a valuation at the top end of a legitimate bracket, and because such an approach is likely to produce an unfruitful negotiation and an unnecessary trial. A Defendant might quite understandably say, well if that is what you are after, there is no point in our talking. Another consequence, though not an inter-parties matter, is that an honest Claimant is likely to be acutely disappointed.”

Proportionality and survival for litigators 4: Claim only what you can prove.