PROVING THINGS 178: PROVING PREJUDICE: THE NEED FOR SPECIFIC EVIDENCE

There is another aspect of the Court of Appeal decision in Cable v Liverpool Victoria Insurance Co Ltd [2020] EWCA Civ 1015 that justifies closer examination.  That is the court’s observations on the judge’s finding of prejudice.  The Court of Appeal was categorical in its rejection of the defendant’s arguments that the claimant’s conduct had caused it prejudice. It serves as a reminder that anyone alleging “prejudice” has to do so by the provision of specific evidence and not general assertions.  This has important practical ramifications across a whole range of applications that fall to be considered by the courts.

“… she was not entitled to find prejudice where it was not alleged. If there had been a failure to set a proper reserve in this case, or if the misrepresentation that this was a low value RTA claim had given rise to particular issues or difficulties for the respondent insurer, then there needed to be specific evidence of that before she could make the finding she did. There was no such evidence. In my view, this was not a matter to which the DJ should have had any regard.”

THE CASE

The decision at first instance was looked at in a previous post.  The claimant was injured in a road traffic accident in September 2014. The claimant’s solicitor notified the defendant of the claim on the MOJ Portal. It turned out the case had much higher value.   The claimant’s case was struck out as an abuse of process by the District Judge and this decision was upheld on appeal by the Circuit Judge.  The Court of Appeal overturned the striking out.

THE JUDGMENT ON PROVING PREJUDICE

Lord Justice Coulson considered the defendant’s arguments that it had been prejudiced by the claimant’s conduct.

8.2 The Prejudice to the Respondent
    1. The first way in which it is said that the respondent was prejudiced arose from the failure to use the PI Protocol. As both DJ Campbell and Judge Wood QC made plain, the PI Protocol is very different from the RTA Protocol. It requires a completely open approach in respect of medical treatment, experts and rehabilitation, none of which is reflected (for obvious reasons of proportionality) in the RTA Protocol[5]. It is said that the respondent was deprived of these benefits because the PI Protocol was not used.
    2. There are two answers to that. First, for the reasons that I have given, I consider that the focus must be on the lost year between autumn 2017 and autumn 2018. Prior to that, the use of the ‘wrong’ Protocol was much more debateable (because it was not apparent at the outset or for some considerable time thereafter that the claim was obviously unsuitable for the RTA Protocol), and the process was taking place within the limitation period anyway. So the best that the respondent can say is that, if a proper Part 7 claim had been made in the summer/autumn of 2017, as it ought to have been, they might have agreed to a stay so that the matter could have proceeded under the PI Protocol from then on.
    3. Secondly, I do not accept that, if the PI Protocol had been followed a year earlier, the evidence suggests that anything significant would have been done differently. By reason of the size and complexity of the claim, the parties would always have had their own experts. This was a multi-track claim and as such, as paragraph 7.2 of the PI Protocol suggests (paragraph 11 above), it would not have been appropriate for a single joint expert. It has not been suggested that any other aspect of case management (save in respect of experts) might have been done differently if a Part 7 claim had been made in autumn 2017 under the PI Protocol.
    4. The respondent makes a fair general point about medical examinations and rehabilitation. Earlier compliance with the PI Protocol would have led to an earlier examination of the appellant by the respondent’s experts. But there was nothing to suggest that this would have made any difference to the appellant’s medical treatment. Neither was there any evidence that rehabilitation might have been possible if the appellant had been examined by the respondent’s experts a year earlier. On the evidence, DJ Campbell could not conclude, even on the balance of probabilities, that there had been any prejudice to the respondent in this respect.
    5. Further, not only is it not suggested that Dr Kidd’s reports were anything other than clear and comprehensive, but it appears that the appellant himself sought the advice of various specialists, and utilised his own private medical insurance cover to do so. There is nothing to suggest that some critical point was missed in the examinations that did take place, or that sufficiently different treatment was available or should have been recommended.
    6. Accordingly, I conclude that although, potentially, there could have been some prejudice because of the failure to switch to the PI protocol in the autumn of 2017, there was no evidence of any actual prejudice at all.
    7. The second way in which it is said that the respondent suffered prejudice is the suggestion that the abuse of process allowed the appellant’s solicitors to avoid the consequences of the Limitation Act. I confess that I do not follow that argument at all.
    8. The abuse of process identified at paragraph 69 above did not affect the limitation period. The appellant issued his claim form under Part 8 within the 3-year period. If there had been no abuse of process, he would have issued the claim form in time but under Part 7 instead.  The appellant’s use of the wrong Part of the CPR has not bypassed the relevant limitation period or deprived the respondent of a limitation defence. A claim form was issued in time. Furthermore, that claim had been admitted even before the claim form was issued. Thus, there has been no loss of a defence which would otherwise have been available. As my Lord, Lord Justice Lewison, put it during the course of argument, there has been delay, but not deprivation.
    9. Thirdly, DJ Campbell said that the respondent was unable to set a proper reserve in this case because it was misled as to the proper value of the claim for a period of four years. She said that “Insurers work very precisely. In years of claims… they would want to have a reserve set aside for damages and costs. But they have not been able to reserve against this claim in 2014, 2015, 2016, 2017 and most of 2018…” [54].
    10. DJ Campbell is an experienced PI judge and, up to a point, she was entitled to have regard to her own knowledge and experience when considering the prejudice to the respondent. But she was not entitled to find prejudice where it was not alleged. If there had been a failure to set a proper reserve in this case, or if the misrepresentation that this was a low value RTA claim had given rise to particular issues or difficulties for the respondent insurer, then there needed to be specific evidence of that before she could make the finding she did. There was no such evidence. In my view, this was not a matter to which the DJ should have had any regard.