STAGE 3 PROCEEDINGS AND LATE SERVICE OF EVIDENCE: COURT OF APPEAL DECISION

The judgment of the Court of Appeal yesterday in Wickes Building Supplies Ltd v Blair [2019] EWCA Civ 1934  is an important one in relation to late service of evidence and Stage 3 of the Protocol.  It shows the importance of having completed evidence available and served in compliance with the requirements of Stage 3.  Late service of witness statements can cause considerable difficulties.

 

THE CASE

The claimant was injured and brought a claim for personal injuries. Liability was admitted.  The matter entered the Stage 3 procedure. The claimant served evidence later than the rules required by Stage 3. The judge disregarded that evidence and gave judgment for an amount of damages.  The claimant appealed.

THE RULES

The rules governing evidence in Stage 3 proceedings were set out in the judgment.
    1. Paragraph 5.1 of the Practice Direction provides that an application to the court to determine the amount of damages must be started by a claim form. The contents of the claim form are prescribed by paragraph 5.2. They include whether the claimant wants the claim to be determined by the court on the papers or at a Stage 3 hearing.
    2. Paragraph 6.1 identifies the documents which must be filed with the claim form, which in claims of the sort under consideration in this case are as follows:

(1) the Court Proceedings Pack (Part A) Form;

(2) the Court Proceedings Pack (Part B) Form (the claimant and defendant’s final offers) in a sealed envelope;

(3) copies of medical reports;

(4) evidence of special damages; and

(5) evidence of disbursements.

Paragraph 6.1A makes further provision for medical reports. Paragraph 6.3 provides:

“Subject to paragraph 6.5 [which relates to child claimants], the claimant must only file those documents in paragraph 6.1 where they have already been sent to the defendant under the relevant protocol.”

Paragraph 6.4 provides:

“The claimant’s evidence as set out in paragraph 6.1 must be served on the defendant with the claim form.”

    1. Paragraphs 7, 8 and 9 of the Practice Direction are central to the issue in this appeal. They provide as follows:

“Evidence – general

7.1 The parties may not rely upon evidence unless –

(1) it has been served in accordance with paragraph 6.4;

(2) it has been served in accordance with paragraph 8.2 and 11.3 [which relate to certificates of recoverable benefits, not relevant to this case]; or

(3) (where the court considers that it cannot properly determine the claim without it), the court orders otherwise and gives directions.

7.2 Where the court considers that –

(1) further evidence must be provided by any party; and

(2) the claim is not suitable to continue under the Stage 3 Procedure,

the court will order that the claim will continue under Part 7, allocate the claim to a track and give directions.
SERVICE OF THE EVIDENCE IN THIS CASE
    1. On 20 April 2017, Mr Blair submitted a CNF under the Protocol against his employers, Wickes Building Supplies Ltd. On 25 April 2017, Wickes admitted liability. Thereafter, the parties entered Stage 2 of the Protocol but were unable to agree damages and the case therefore moved to Stage 3.
    2. On 1 December 2017, Mr Blair filed a claim form under paragraph 5.1 of Practice Direction 8B, enclosing the documents required by paragraph 6.1. On 5 January 2018, solicitors for Wickes filed an Acknowledgment of Service in Form N210. That document was not included in the papers filed for the hearing of the appeal before us but filed at our request after the hearing. The solicitors ticked the box which states: “I intend to contest this claim”. They did not tick the box saying “I intend to dispute the court’s jurisdiction” or the box saying “I object to the claimant issuing under this procedure”. A Stage 3 hearing was then listed before District Judge James on 24 April 2018.
    3. At the outset of the hearing, a preliminary issue arose about a statement, dated 23 November 2017, signed by Mr Blair which, according to Wickes, had not been served in accordance with the Protocol and which they therefore asserted should not be considered by the court. Having heard argument from counsel on the issue, the district judge delivered a short judgment in which he concluded:

“In all the circumstances, I think it is more likely than not that the defendants did not have the statement of evidence in time, in accordance with the Protocol or otherwise, and accordingly it would be wrong to permit the claimant to rely on that statement of evidence.”

  1. The district judge then proceeded to hear submissions on the substantive issue, and delivered a further judgment ordering Wickes to pay the sum of £2000 by way of damages to Mr Blair, plus costs in the sum of £1080.

THE HEARING BEFORE THE CIRCUIT JUDGE

The claimant appealed and the Circuit Judge allowed the appeal.  However the grounds that the appeal was allowed were somewhat controversial.

“17. Therefore, the sanction to a claimant that has not followed the procedure or has filed and served new evidence or additional evidence that had not been provided under the relevant protocol, is that the claim will be dismissed, which has cost consequences. If the claimant wishes to start proceedings, then the Limitation Act may or may not apply.

18. In her submissions [counsel for Wickes] says that opposing the claim is not the same as objecting to the evidence. I take the view that the Practice Direction is not inconsistent. In this case, the first stage is that the district judge found (and there is no appeal from this) that the witness statement was served late in the sense that it was not served with the Protocol. That then meant that the evidence could not be relied upon in accordance with 7.1.

19. There was then a choice for the claimant. The evidence could be simply abandoned and the Stage 3 procedure would proceed with damages awarded on whatever evidence there was before the court, or the claimant could retain the evidence. This would result in the defendant continuing to oppose, because it would be the defendant’s case right from the start, that there was opposition to this evidence, so the claim would be opposed on the grounds that this evidence should not be admitted. In that event, the court should then proceed as directed by 9.1. I do not accept that there is some problem with using 7.1 and 9.1 in that fashion.

20. What happened in this case is neither the judge nor counsel applied themselves to the procedure that should be adopted in accordance with Practice Direction 8B. The entire proceedings became fatally flawed, and the adjudication was flawed, because it was not an adjudication in accordance with the Protocol. It was not an adjudication that abided by the terms, the mandatory terms, of the Practice Direction. It was instead, essentially, turned into a small claims case, and as such, the decision of the district judge cannot stand.”

  1. At the conclusion of the appeal hearing, Judge Hughes made an order allowing the appeal, setting aside the district judge’s order, dismissing the claim under the Protocol pursuant to paragraph 9.1 of Practice Direction 8B, reserving all questions of costs under the Protocol until the conclusion of Mr Blair’s claim under Part 7, ordering Wickes to pay Mr Blair’s costs of the appeal summarily assessed at £4,500, and directing that Mr Blair give credit in his Part 7 proceedings for all sums received from Wickes in the Protocol proceedings.

THE JUDGMENT OF THE COURT OF APPEAL: RESTORING THE ORDER OF THE DISTRICT JUDGE

The Court of Appeal held that the Circuit Judge’s approach was wrong.  Objecting to late service of evidence was not the same as objecting to the case proceeding under the Stage 3 Procedure.
    1. In my view, this appeal succeeds for the reasons articulated so clearly by Ms Cullen. The provisions of the Protocol are regrettably not drafted in a way which makes interpretation entirely straightforward. I am sure, however, that Ms Cullen’s submissions are correct.
    2. When, at the hearing before the district judge, Wickes objected to the court reading the additional statement filed by Mr Blair, it was not opposing the claim because the claimant had filed and served additional evidence, but, rather, objecting to the new evidence being considered by the court. I agree with Ms Cullen that paragraph 9.1 of Practice Direction 8B was not “triggered” in the situation at all. The district judge quite properly dealt with the matter by reference to paragraph 7 of the Practice Direction.
    3. Paragraph 9 addresses the situation where a defendant in his acknowledgement of service, or at a later stage, objects to the claim proceeding under the Protocol because the claimant has failed to comply with the procedure under the Protocol or has filed and served additional evidence with the claim form which has not been provided in accordance with the Protocol. But a defendant served with an additional statement not filed in accordance with the Protocol is not obliged to oppose the claim continuing under the Protocol. That situation must arise not infrequently in a process used by litigants in person. If all claims in those circumstances were removed from the Protocol process, it would deprive litigants of the benefits of the relatively inexpensive and speedy resolution of their claims which the Protocol provides. In my judgment, a defendant served with an additional statement not included in the material served under Stage 2 has the choice of opposing the claim proceeding under the Protocol or continuing with the process but objecting to the evidence being considered by the court. In this case, Wickes plainly chose the second option. It is crystal clear from the Acknowledgment of Service that Wickes was opposing the claim but not objecting to the use of the Stage 3 Procedure.
    4. In those circumstances, the issue fell to be considered by the district judge under paragraph 7 of the Practice Direction. Under that paragraph, the court at the hearing must disregard any evidence not served in accordance with the Protocol and the Practice Direction unless the court considers that it cannot properly determine the claim without it. If it does conclude that the proper determination of the claimant requires the evidence to be admitted, the court may allow the party to rely on the evidence and, if so, will give appropriate directions under paragraph 7.1(3). In this case, the district judge simply concluded that the statement should be disregarded and proceeded to make a decision on the level of damages. In taking that course, he was acting in accordance with the terms of the Practice Direction and the aims of the Protocol.
    5. I agree with Ms Cullen’s submission that, if Judge Hughes’ interpretation of paragraph 9.1 was correct, it would mean that, whenever a defendant objected to the late filing of evidence, the claim would be removed automatically from the Stage 3 Procedure. The court would essentially be deprived of any discretion to deal with the late service of evidence as it considers appropriate. Such a consequence would be contrary to the aims set out in paragraph 3 of the Protocol and may unfairly disadvantage the defendant. By contrast under paragraph 7.1, whilst the default position is that the evidence may not be relied upon, the court has a discretion to order otherwise under 7.1(3) if it considers that it cannot properly determine the claim without it.
    6. In this case, by appealing to the circuit judge, the claimant was seeking to overturn the order on the grounds that the district judge should have dismissed his claim as a result of his own failure to comply with the Protocol. As Ms Cullen says, this would allow the claimant to re-litigate the entire claim under Part 7 in the hope of getting a better result.
    7. The decision in Phillips v Willis is of no assistance to Ms Robson’s argument. Paragraph 8.1(3) is not disapplied from claims under the Practice Direction. Jackson LJ did not say that a judge conducting a Stage 3 hearing could not exercise the power under paragraph 8.1(3) to order the claim to continue as if the claimant had not used the Part 8 procedure. Rather, he said that, on the facts of that case, it would have been an impermissible exercise of the power to transfer the case out of Part 8 and into Part 7.
    8. In my judgment, the correct interpretation of these various provisions is as follows.
(1) At a Stage 3 hearing of a claim where the parties have followed the Protocol but are unable to agree the amount of damages, they may only rely on evidence as permitted under paragraph 7.1 of the Practice Direction.
(2) In the circumstances described in paragraph 9.1 of the Practice Direction, the court is under a duty to dismiss the claim under the Protocol. The claimant may then start proceedings under Part 7, provided the limitation period has not expired. If the claimant is ultimately successful in the Part 7 proceedings, the court under CPR r.45.24 may order the defendant to pay no more than the fixed costs in r.45.18 plus disbursements allowed under r.45.19.
(3) In the circumstances described in paragraph 7.2 of the Practice Direction, the court is under a duty to order that the claim will continue under Part 7. In that event, the claimant is not at risk of his claim being time-barred but under paragraph 7.3 the court will not allow the claimant to recover the Stage 3 fixed costs.
(4) In all other circumstances, the court considering a claim under the Stage 3 Procedure has a discretion under CPR paragraph 8.1(3) to order the claim to continue as if the claimant had not used the Part 8 procedure, but in exercising that power the court must comply with the overriding objective and the aims of the Protocol.
  1. The arguments before us were focused on the interpretation of the Protocol and Practice Direction summarised above which was the reason for Judge Hughes’ decision to allow the appeal from the district judge. Although Judge Hughes mentioned “oblique references” to the excluded statement in the district judge’s judgment, that point did not feature in Ms Robson’s argument to this court. For my part, I can see nothing in the district judge’s judgment to suggest that he relied on that statement in reaching his decision on the quantum of damages.
  2. For these reasons, I would allow the appeal and restore the order of the district judge.