APPEAL JUDGE OVERTURNS REFUSAL TO EXERCISE SECTION 33 DISCRETION: DELAY AND PREJUDICE HIGHLY RELEVANT FACTORS

In Gregory v H J Haynes Ltd [2020] EWHC 911 (Ch) Mr Justice Mann overturned a judge’s decision not to exercise their discretion under Section 33 of the Limitation Act 1980.  The claimant had been guilty of culpable delay but that delay had not affected the possibility of a fair trial.

“If there had been any evidence of additional prejudice to the defendant arising out of that last period of delay, my decision would probably have been different; but in the absence of that additional prejudice I do not think the delay is quite bad enough to weigh down on the claimant in terms of the fairness of the relief sought.”

THE CASE

The claimant brought an action for damages for personal injury. He had been employed by the defendant from 1959 – 1971/2 and alleged he had been exposed to asbestos. The defendant had been dissolved in 1992. In 2009 the claimant had contacted solicitors with a view to making a claim.   The defendant was restored to the register in 2015. The claim form was received in July 2017.

THE DECISION OF THE DISTRICT JUDGE

The District Judge (exercising the jurisdiction of a Circuit Judge) declined to extend the limitation period. One part of the District Judge’s reasoning was there had been culpable delay from March 2009 – November 2014.  This “period of culpability” was a material part of the judge’s reasoning.

THE JUDGMENT ON APPEAL

Mr Justice Mann considered the issue of delay and prejudice.  He also considered the limit nature of the scope of the appeal judge to overturn the exercise a discretion.  Nevertheless he allowed the claimant’s appeal. There had been culpable delay, however this had not impacted upon the possibility of a fair trial.

“Prejudice

1. 1. The degree and nature of prejudice likely to be suffered by either party as a result of delay is actually a question of fact. The prejudice to the claimant in not being to bring his claim is obvious. The prejudice to the defendant in being deprived of a limitation defence is equally obvious though less relevant as a single factor. What is more significant is the prejudicial effect of the delays that have occurred in this matter.

   2. The main prejudicial effect is likely to be the loss of evidence over the years. In the present case such evidence as there was demonstrated, perhaps not surprisingly, that little evidence seemed now to be available to the defendant. The evidence of the defendant (through their solicitor Ms Manners) demonstrated that attempts had been made to contact those who had been directors of the defendant at the time of Mr Gregory’s employment and subsequently, and inquiries revealed that they were all dead or untraceable. Most of those who had died had done so even before 2008. No company documents have survived the dissolution of the company, and her efforts had apparently not revealed anyone who could give evidence of working practices at the time of Mr Gregory’s employment. That, of itself, gives rise to significant disadvantage to the defendant in meeting the claim. The judge made certain findings about this:

“27. The evidence of Ms Manners shows just how difficult it will be for the Defendants to muster any evidence either by witnesses or documents. In his skeleton argument… Mr Stewart points out that there are no longer any meaningful contemporaneous documents or witnesses available “to enable a fair trial to take place” and he goes on to argue in paragraph 21 that the Court, at any trial would be “quite heavily dependent” on the claimant’s account. In my judgement this is a double edged sword as it will not be plain sailing for the Claimant to adduce any independent evidence of the negligence alleged, or working practices that are allegedly in breach of the various statutory duties set out in the particulars of claim. The difficulty in proving the claim may be as great as the difficulty in defending it. Further, under this sub- section I have to ask myself whether or not the evidence to be adduced by either side is less cogent, and if so the extent to which it is less cogent, by reason of the failure to commence proceedings within the limitation period. In this respect I need to consider the position of both parties as at November 2011, the end of the limitation period. Liquidators were appointed in respect of a voluntary winding up in November 1985 but dissolution did not take place until December 1992, almost 7 years later. During that time I suspect efforts were made to liquidate the assets and I further suspect employees were laid off and I am aware that at least two directors died in this period. It is highly likely that by 1992 much of the evidence that either side would wish to adduce had ceased to be available. Even if the claimant had commenced the action before the expiry of the limitation period, there would have been evidential difficulties, which will have increased with the passage of time, but those difficulties would have been the same for both sides. The effect on the cogency of the evidence of the delay is therefore likely to be the same for both sides.”

1. 1. The judge returned to the question of prejudice in paragraph 38:

“However, I have to consider whether or not the Defendant’s ability to counter the allegations of the Claimant has been prejudiced by the undoubted delays, or if the defendant’s position now is no worse than it would have been in November 2011 when the limitation period expired. As at that date the Defendant had been dissolved for nineteen years. On the one hand almost certainly the records and documents would have long disappeared. But on the other hand, there may well have been former employees who could have been called to gainsay what the Claimant would say as to working conditions and practices, although I do take account of the evidence of Miss Manners which was that her enquiries were fruitless.”

In paragraph 43 the judge again dealt with the loss of evidence over time:

“True it may be that documents are long gone and witnesses may be untraceable, but those [are] evidential difficulties that would undoubtedly have been faced by the Defendant in November 2008 or 2011.”

And he came back to the same assessment as at the same time in paragraph 46:

“It is clear from the evidence of Miss Manners that the Defendant will not be able to adduce any or any sufficiently cogent evidence to answer the allegations contained in the particulars of claim. True it may be that there would have been such evidential difficulties if the claim had been started within the limitation period, but a delay of almost 9 years makes such difficulties greater.”

1. 1. The general thrust of this is, not surprisingly, that the evidential cases of both sides have been damaged by the delay. The judge suggested that the effect was equal. I tend to doubt that. I consider it more likely that the adverse effect of this will be suffered more by the defendant. The claimant at least has himself as a witness. It is not clear that the defendant will have any.

   2. However, again it is not appropriate just to consider the whole period as one period. In a case where the claimant could not reasonably be expected to have commenced a claim for a large part of that period, it is pertinent to consider the extent of this prejudice across elements of the period. It seems to me that the thrust of what the judge below found was that by the time one gets to 2011, or 2014, the damage to the defendant’s evidential case had been done in terms of lost evidence. There seemed to be no witnesses left. The judge’s paragraph 46 suggests a degradation in the last 9 years. That does not seem to be based on evidence. I suspect that it was more based on judicial instinct that another 9 years makes a bad position worse. Whether or not that is true depends on how bad the position was at the beginning of that 9 years, and the answer seems to be that it was pretty bad by then anyway.

   3. In any event, I do not think that the last 9 years is as significant a period as the period since 2014. If one asks the question whether there has been additional prejudice to the defendant in that more recent period (relevant because 2014 is the first point of a time at which one can fairly say the claimant ought to have sued) then I think the answer is that there has not been. By then the damage to the defendant’s evidential case has been done.

   4. There is one other area of evidence significant to the defendant, and that is Mr Gregory’s exposure to asbestos in the years after he left the employment of the defendant. He continued to work for almost 30 years. The defendant would be entitled to investigate what exposure had taken place in that period. Apparently Mr Gregory was self-employed in that period, so employer records would not be so available. However, again it is not apparent that an investigation into this area would be any more difficult than it already was by 2014.

   5. In summary, therefore, there was gathering prejudice in the form of diminishing evidence throughout the whole of the period since Mr Gregory’s exposure, but by the time of the identification of insurers all the real prejudice to the defendant had accrued. The same is true, probably, in relation to Mr Gregory’s evidential case.

Fair trial

1. 1. On the question of a fair trial, the judge below seems to have found that a fair trial was still possible:

“38… All the circumstances of the case include whether or not a fair trial is still possible. The fact that a fair trial is still possible is not determinative and a delay of nine years is not insignificant and should be brought into the balance. …”

1. 1. Mr Stewart said that that was not correct because the prejudice was caused by delay, but I consider that that takes the prejudice point too far. I accept the views of the judge below on this point.

Other matters

1. 1. Before turning to my final determination I should deal in terms with all the indicia in section 33(3), as indeed the judge below did.

(a) Length of, and reasons for the delay, on the part of the plaintiff – I have already expressed my views on that.

(b) The extent to which delay has rendered evidence less cogent – I have expressed my views on that.

(c) Conduct of the defendant after the cause of action arose – nothing arises under this head, as the judge below found.

(d) Duration of disability of the claimant – not applicable, as the judge found.

(e) The extent to which the claimant acted promptly on acquiring knowledge of his condition. He acted promptly in the early periods of the claim, but not subsequently, as appears above.

(f) The steps taken by the claimant to get medical, legal or other advice and the nature of the advice received. Under this head Mr Gregory was subjected to criticism by the judge below in respect of the medical report that was not obtained until 23rd October 2016. He points out that no explanation was given for the failure to get medical evidence in support of his claim in 2009 when he consulted solicitors., and the claimant’s steps to obtain medical evidence were few and leisurely. Mr Stewart adopted this point. I consider this criticism to be largely misplaced. Mr Gregory had sufficient medical information to instruct his solicitors in 2009. It is true that the later medical report (produced without seeing him, but on the basis of other material) was produced when it was, but that seems to me to be largely immaterial to the present matter. I think that this indicium relates to something else. What Parliament requires to be taken into account is a failure to get advice promptly so as to reduce the delay in making a claim. If a claimant does not make a claim as early as he might because he does not obtain prior advice as early as he might, then that is a factor to be taken into account. The significance of producing a “late” (whatever that may mean) medical report in this case is of much less significance.

Conclusion

1. I now draw all those strands together. Although what matters is the position as at the ultimate date of the issue of the claim form, I prefer to approach the matter in a couple of stages in order to identify where the real issue lies. No limitation point would have arisen if Mr Gregory’s solicitors had managed to identify insurers (and therefore arrange for a restoration of the defendant to the register) between 2008 and 2011. However, he could not do so. If he had sought to commence his proceedings in 2014, or even at the beginning of 2015, and made his current application then, then I consider it highly likely his application would have succeeded. He would have made it at what can broadly be regarded as the first reasonably available opportunity,and while the defendant would have been prejudiced in the manner identified above, the balance of fairness would clearly have favoured a claimant who sued at the first reasonably available opportunity, taking into account all the matters debated above. The defendant had been identified before then, but the insurers had not. Once they had been, it would have been unfairly harsh on the claimant to say it was still too late, even if the defendant’s ability to defend itself had been significantly diminished by the passage of time.

2. That being the case, what should the effect of the passage of another 2 years or more be? So far as the defendant is concerned, its evidential position is probably not worsened by that passage of time. It had had an opportunity to conduct its researches at the beginning of the period when the letter of claim was made, in any event. Nonetheless the claimant (or rather his solicitors) delayed in pursuing the claim for no good reason. In my view it can be said that it will normally behove a claimant who discovers a late claim to get on with its pursuit. Even if things are so delayed already that additional delay does not cause any identifiable prejudice, a claimant cannot expect to be able to delay as long as he/she likes on that basis. There will come a point at which the claimant’s own delay, in those circumstances, will make it unfair to extend the period. Apart from anything else, the good discipline which delays in a claim really requires would be compromised if parties and their solicitors could just become lazy on the footing that it does not really matter any more in terms of prejudice to the defendant.

3. In my view this case comes close to that, but not quite close enough. Bearing in mind that the delay was apparently attributable to the solicitors and not dilatoriness on the part of the claimant himself, I do not think it is quite enough to deprive the claimant of the disapplication of the limitation period to which he would have been entitled in 2014, or perhaps 2015. It may or may not be the case that if I refused the disapplication because of the delays of the solicitors then Mr Gregory would have had a cause of action against his solicitors, but even if he had that right I do not think it fair to confine him to it in all the circumstances of this case. If there had been any evidence of additional prejudice to the defendant arising out of that last period of delay, my decision would probably have been different; but in the absence of that additional prejudice I do not think the delay is quite bad enough to weigh down on the claimant in terms of the fairness of the relief sought.

4. In the circumstances, therefore, I shall allow the appeal and disapply the limitation period as asked.