FATAL ACCIDENT: LEGAL COSTS OF ATTENDING INQUEST WERE RECOVERABLE: THE DANGERS TO DEFENDANTS OF MAKING AN EQUIVOCAL “ADMISSION”

In the judgment today in Greater Manchester Fire and Rescue Service v Veevers [2020] EWHC 2550 (Comm) HHJ Pearce upheld a decision that the legal costs incurred in attending an inquest were recoverable as costs in a subsequent action for Fatal Accident damages.  The defendant had failed to make an appropriate “admission” within the meaning of the Civil Procedure Rules.  This meant that it was reasonable for the claimant’s lawyers to attend the inquest and seek to recover the costs from the defendant.  The defendant could have avoided those costs by making an admission within the meaning of the CPR.

 

“CPR 14.1A sets out a clear procedure for making a formal admission. It would be undesirable if uncertainty were created by giving equal effect to other communications that do not satisfy that description. If the defendant chooses to make a communication which is not a admission within the meaning of the CPR, that document will be one factor in the case, but the availability of a route to making a formal admission that puts liability beyond argument will mean that the court is entitled to place less weight on it in the overall conclusion.”

THE CASE

The claimant’s son was a firefighter and killed during the course of his work.  Within the proceedings the defendant admitted liability and the case was settled.  There was an issue on assessment as to whether the legal costs of the claimant’s representation at the inquest were recoverable.

The District Judge held, as preliminary issue, that the costs were recoverable.  The defendant appealed that decision.

 

THE DECISION ON APPEAL

HHJ Pearce upheld the decision of the District Judge.

CASES WHERE THE COSTS OF ATTENDING AN INQUEST HAVE BEEN HELD TO BE RECOVERABLE

    1. My attention was drawn to various cases in which Costs Judges have ruled that the costs of attendance at inquests are in part or in whole recoverable.
(a) Stewart v Medway NHS Trust [2004] EWHC 9013. Master O’Hare held that it had been reasonable for the Claimant to cross examine witnesses and to make submission to the inquest, in a case where liability was not admitted and the facts investigated at the inquest were relevant to establishing liability in the subsequent civil claim.
(b) King v Milton Keynes General NHS Trust [2004] EWHC 9007. In a case where liability had not been admitted, Master Gordon-Saker held that the reasonable and proportionate costs of attendance at an inquest were recoverable if a material purpose of the attendance was to obtain information or evidence for use in a subsequent civil claim.
(c) Lynch v Chief Constable of Warwickshire Police, SCCO, 14.11.14, unreported. Master Rowley considered the substantial costs claimed for attendance at an inquest on behalf of the Claimant, the mother of the deceased, in circumstance where the deceased had been killed by her former partner, for which death it was alleged the Defendant was liable. The Defendant had not admitted liability before the inquest. The Claimant was represented by a substantial legal team and in all the costs of preparation and attendance were put at £750,000, around 40%-50% of the total bill which was being assessed by the Costs Judge. In a careful judgment applying the judgment of Davis J in Roach v Home Office, Master Rowley considered which aspects of the inquest proceedings could be said to be incidental to the civil claim and what were the reasonable costs for those aspects.
(d) Douglas v Ministry of Justice, SCCO reference CL1607001, [2018] Inquest LR 71. The Defendant in this case had, on the Costs Judge’s findings, admitted liability for both negligence and breaches of the Human Rights Act leading to the death of a young man, who had committed suicide whilst in custody. The admissions were made prior to the inquest and hence by the time of the inquest, the only remaining issue in the potential civil claim was the quantum of damages. Nevertheless the Judge, Master Leonard, found that the costs involved in participating in the securing of disclosure from the Defendants and of obtaining witness evidence from them was recoverable, given that the extent and gravity of Article 2 breaches was relevant to the quantification of the claim.

THE ISSUE IN THIS CASE: THE DEFENDANT’S ADMISSION

The wording of the defendant’s letter was of considerable importance.  It was not an “admission” within the meaning of CPR 14  but stated that the defendant was willing to pay damages.

We act on behalf of Greater Manchester Fire and Rescue Service (“GMFRS”) and their Insurers Travelers in respect of the incident on 13 July 2013.

We are sure that you will be aware that the investigation by the Health and Safety Executive, the Police and the Fire Brigades Union have been conducted in an open and collaborative fashion from immediately following the tragic death of Stephen Hunt at Paul’s Hair World on Oldham Street in Manchester.

As the inquest approaches we have, like you, been supplied with a large number of reports and witness statements which in various way challenge in minute detail the events which unfolded that day. GMFRS in consultation with their insurers Travelers are acutely aware of the stress and strain which will be placed upon the family members of Stephen Hunt up to and including the inquest itself. GMFRS family liaison officers have been in touch with the bereaved family and will continue to support them.

Our clients have made no assessment of the potential for liability to the estate and dependants of Stephen Hunt but they have instructed us to set out their position in relation to any potential claim which may be brought for the family of the deceased.

Our clients are not in a position to consider an admission of liability and we have not undertaken a detailed forensic analysis of the potential for liability in any civil claim on their behalf.

The purpose and objective in making the comments which we make directly below is to attempt to remove any additional stress from the family during and immediately after the inquest.

As you are aware from previous comments and undoubtedly aware generally our clients take their responsibilities very seriously where tragic incidents such as this occur. Our clients are meeting simultaneously with the handing over of this letter to you to inform the family of Stephen Hunt that any claims that will be pursued by you on behalf of their deceased family members will be met in full.

We set out below in formal legal terms the basis on which our clients are prepared to meet any claim should one be pursued.

We act on behalf of Greater Manchester Fire and Rescue Service and their insurers Travelers.

We write in open correspondence in order to advise that our clients are willing to compensate the estate and dependents of Stephen Hunt pursuant to the Fatal Accidents Act 1976 and Law Reform (Miscellaneous Provisions) Act 1934, for any loss which they may prove to be attributable to the incident on 13 July 2013 together with payment of their reasonable costs.

It is not our client’s intention to allege contributory negligence or to seek any reduction of damages in this regard. We confirm that our clients will deal with the claims on a full basis.”

THIS WAS NOT AN ADMISSION

The nature of the “admission” made by the defendant was important. The District Judge held that it was not, in fact an admission.  Further there was a risk that the defendant would attempt to resile from that admission.

  1. Having considered the authorities, the Judge concluded that an admission of liability prior to an inquest was “an important factor to be taken into account as to whether or not incurring the costs of the inquest are justifiable/recoverable.” He also acknowledged that, on the facts of this case, the Respondent was contending that liability had not been admitted whereas the Appellant’s case was that whilst there was no formal admission of liability, “what they have said in correspondence is tantamount to that position and that it would be impossible for the Appellant to resile from that position.”
  2. However, on the facts of this case, he found that there was no admission of liability by the Appellant. In those circumstances, the case did not fall into that category where the court would be likely to find that the costs of attending an inquest were not of and incidental to the subsequent claim. He accepted that the Respondent was entitled to perceive a risk that the Appellant might resile from their statement that they would compensate the estate and dependents of Mr Hunt and that in those circumstances, the cost of attending the inquest were recoverable. He noted at paragraph 36 of his judgment that, “The widow (sic) of the deceased would be placed in a most horrendous position if she were forced to attend an inquest where there had been no formal admission of liability, that there was no agreement as to the evidence, that witnesses were to be called and cross-examined, that she was to be engaged in a complex and distressing legal process without representation when the Defendants quite properly turn up at such proceedings with barrister.”

THE JUDGE’S DECISION ON APPEAL

HHJ Pearce dismissed the defendant’s appeal.
    1. I deal first with the preliminary point taken by the Respondent as to the ambit of the appeal. The Respondent is right to say that the court should be careful to restrict an Appellant from taking a point not taken below. But the distinction between the position argued below and that advanced in the Appeal Notice is a relatively fine one. No one has suggested that any significant amount of the inquest costs related to preparation for the quantum of the civil claim. If I allowed the appeal to the extent of remitting the issue of the reasonableness and proportionality of those costs to the Costs Judge, I would not significantly be adding to the burden of this case on either the court system or the parties, since the question of assessment needs to be dealt with in any event, as identified above.
    2. In my judgment, it would be unduly technical to dismiss the appeal based on a slight change in how the argument is put when that will not materially affect the path that the litigation would have taken in any event. If the appeal were to be allowed on this limited ground, it would be open to the Respondent to argue that the costs of the appeal could have been avoided had the point been conceded below and she is thereby protected from any prejudice due to the minor change of case. For these reasons, I do not dismiss the appeal on that ground.
    3. I turn then to the central issue in this case, that is the recoverability of inquest costs where the prospective defendant has indicated a willingness to settle any claim but has not admitted liability.
    4. Having regard to the decisions referred to above, the law in respect of the recovery of the costs in a civil claim for the preparation for and attendance at an inquest, in so far as those costs relate to the establishing of liability in a subsequent civil claim, can be summarised as follows:
(a) Inquest costs may be recoverable in so far as reasonable and proportionate, so long as they can properly be said to be incidental to the civil claim;

(b) Such costs will not be recoverable if liability is no longer in issue between the parties, since the costs are simply not incidental to something in issue in the civil claim;

(c) In determining whether liability is in issue, the court must look at all the circumstances of the case, but the central issue is likely to be whether the prospective defendant has admitted liability or otherwise indicated a willingness to satisfy the claim;

(d) Liability will not be in issue if it has been admitted since such an admission is binding unless the court subsequently permits it to be withdrawn pursuant to CPR 14.1A.

(e) However, the Costs Judge is entitled to look with care at anything less than an unqualified admission to see whether the prospective defendant’s position is one from which it may resile or which leaves matter in issue between the parties.

(f) In particular, if the defendant’s position is not one of unqualified admission in circumstances where such an admission could have been made, the Costs Judge may be entitled to find that the failure to make an unqualified admission justified the conclusion that the defendant might exercise its right to resile from the admission and that therefore the costs of the inquest could properly be said to be incidental to the civil claim.

(g) If the costs can be justified upon these principles, the mere fact that there are other reasons why the family of the deceased should wish to be represented at an inquest, most obviously to avoid the inequality of arms between unrepresented family members and a represented public body does not mean that the costs are not recoverable. It is enough that the attendance to secure relevant evidence in relation to matters in issues was a material purpose for the attendance.

    1. The first four of these propositions are uncontroversial. The fifth and sixth flow from the distinction to be drawn between an admission on the one hand and some other more equivocal stance on the other. That such a distinction exists is clear from the terms of CPR Part 14.
    2. The seventh point, which follows the reasoning of Master Gordon-Saker in King v Milton Keynes General NHS Trust, is consistent with the general approach of the common law to the issue of causation where multiple causative factors are in play.
    3. As I have noted, Mr Mallalieu QC seeks to draw parallels between the correspondence in this case and that in The Bowbelle, stating that in both cases no admission of liability was made. However, there are two clear distinctions between the position in The Bowbelle and that here:
(a) It is clear from the judgment of Clarke J that he interpreted the communications as amounting to an admission at the very least of breach of duty if not of liability. As he said in the passage cited at paragraph 23 above, by Spring 1990 “negligence had been conceded.”

(b) In contrast, in this case, it cannot be said that either negligence narrowly (if that means breach of duty) or liability broadly (if that incorporates both breach of duty and causation) had been conceded. The Appellant’s position here was that, in response to a letter inviting an admission of liability, it declined to do so.

    1. A further consideration arises as to the effect of the Appellant’s letters. The result of the amendment introduced by CPR 14.1A is to create a procedural scheme by which a binding admission can be made. The letters sent by the Appellant cannot be equated to an admission of liability within the scheme – their very terms are to admit nothing. That being so, the Respondent could not have taken advantage of the procedural code to enter liability based upon the Appellant’s communications. To that extent, I reject the Appellant’s argument that it would have been open to the respondent to enter judgment on the Letters as an admission pursuant to CPR 14.1A.
    2. The Respondent, in her Particulars of Claim, pleaded reliance upon the Letters and, had the Appellant declined to concede liability in the civil claim, it might have been open to the Respondent to argue that the change of position amounted to an abuse of process of the kind considered in Stoke on Trent City Council v Walley and Gale v Superdrug. However, given the establishment of a procedural code for giving effect to admissions, there must be some uncertainty as to how the courts would deal with statements that do not amount to admissions.
    3. It follows that, whatever the position was on the facts of The Bowbelle, the position here is somewhat different. The Respondent declined to make an admission in circumstances where, had one been made, it would have been binding, subject to the provisions of CPR 14.1A.
    4. I accept that the Respondent’s reply to the email of 4 March 2016, essentially accepting (or perhaps it would be better said acquiescing in) the position taken by the Appellant is part of the factual matrix that must be taken into account. In an appropriate case, a paying party who could show that it had acted to its detriment in reliance upon such a statement might persuade the court that, notwithstanding the fact that no admission had been made, it was not reasonable for it to meet costs that would have been avoided had the receiving party raised at the time the issue that it now takes.
    5. For example, the Appellant here might have raised the argument that, but for the Respondent’s acquiescence in the communication of 9 March 2016, it would (or at least may) have made a formal admission of liability, thereby putting beyond doubt the question of the recoverability of the inquest costs, but that it did not do so because of the stance taken by the Respondent. Had the court been persuaded of this, it might have taken the view that any costs of attending the inquest to investigate liability issues, even if arguably costs incidental to the civil claim, were not in fact reasonably incurred because they could easily have been avoided by the Respondent making its position on the admission clear. However that is not a position that has been advanced by the Appellant. In any event, the tone of the Letters is that the Appellant had a fixed position that it would not admit liability, rather than that it was induced not to do so by the stance taken by the Respondent.
    6. Turning to the Appellant’s grounds of appeal, I conclude:
(1) Whilst the description of the letters as constituting an “offer” may not strictly be accurate within the technical meaning of that term, there is nothing to suggest that the Judge did not treat them exactly as the Appellant says they should have been treated, namely as an open statement by a public body that the claim would be satisfied without dispute (at least as to liability for or causation of Mr Hunt’s death).
(2) The Judge did not treat the Letters as decisive of the issue before him. It is not however correct to say that he considered that they were irrelevant to the question of costs. Rather, he found that, absent an admission of liability, the Respondent was entitled to treat the open statement as capable of withdrawal. This is consistent with authority (and indeed procedural law) and shows no error of law.
(3) Whilst the Judge referred to the letter of 4 February 2016 as containing the “irrefutable fact” that the claim would be met in full, the Appellant’s interpretation of that finding is misguided. The “irrefutable fact” to which he was referring was that the letter said that, not that compensation would be made. Any other interpretation is unsustainable since: (i) the statement that compensation will be paid is not a statement of “fact” at all, but rather one of intention; and (ii) his acknowledgement that the statement could be withdrawn is any event inconsistent with him finding that payment of compensation itself was an “irrefutable fact” in the sense that the Appellant was unconditionally bound to compensate the Respondent.
(4) It is correct that Mr Seaward appears to have described the letter of 4 February 2016, either alone or together with the Letters generally, as an “admission” in his first point in response to the Appellant’s “General Point 1” in the Points of Reply. However, that is not a description repeated by those instructing him, who say in response to “General Point 2” that they dispute that the Appellant had admitted liability. In any event, in my judgment, the Appellant’s position cannot be properly be described as an Admission of Liability – as the Appellant itself expressly made clear, it was not admitting liability.
(5) It is incorrect to say that the Judge gave no weight to the letters. However he treated them as less weighty and was entitled to do because they did not contain an admission.
(6) As I have indicated above, I do not consider it correct to say that the Judge failed to attach any weight to the email of 4 March 2016. However, the weight attached was limited because it did not contain an admission, whether taken on its own or together with the letter of 4 February 2016 This is not only a conclusion that he was entitled to reach, but one that is clearly correct.
(7) The Respondent’s email of 9 March 2016 was a relevant part of the history. It is not referred to in the judgement below, but equally the skeleton argument for the Appellant in the lower court itself does not refer to this email, the emphasis instead being placed on the letter of 4 February 2016. It has never been suggested, whether at first instance or on appeal (assuming that such a point could have been taken on appeal when not taken below) that the Appellant relied on the position taken in the email of 9 March 2016 and in consequence failed to make a formal admission. I see no reason to conclude from this that the Judge failed to have adequate regard to the email.
(8) I am not satisfied that the Judge did in truth attach any weight to the description of the letters as a “costs game” or it formed any meaningful part of his reasoning. The simple fact is that a defendant in the position of this Appellant is entitled to admit liability and thereby avoid liability for the costs of attending an inquest in so far as those costs relate to investigating liability issues. The Judge acknowledged this to be so Whether one calls that a “game”, rather than, for example, a sensible strategy in litigation may be a matter of taste, but at no point did the Judge depart from this line of reasoning.
    1. In coming to these conclusions, I have borne in mind the argument advanced by Mallalieu QC that a responsible public body in the position of the Appellant may wish to make clear that it will make payment of compensation to a person at an early stage and without admission of any particular basis of a claim. It is indeed true that responsible discharge of the powers and duties of a public body my lead to such a wish. But the argument that in some way a statement in such circumstances that is not in form an admission should have the same weight as an admission is in my view not sustainable:
(a) If the public body is ultimately going to admit liability in the litigation or at least consent to judgment being entered against it, there is no reason not to make such an admission at early stage. An appropriately worded admission would put the Appellant in no different position to that which it is when judgment is entered against it (whether on admission or otherwise). The benefit to the Appellant in not admitting liability in general terms at an early stage is that it can subsequently resile from its position without having to apply under CPR 14.1A;

(b) CPR 14.1A sets out a clear procedure for making a formal admission. It would be undesirable if uncertainty were created by giving equal effect to other communications that do not satisfy that description. If the defendant chooses to make a communication which is not a admission within the meaning of the CPR, that document will be one factor in the case, but the availability of a route to making a formal admission that puts liability beyond argument will mean that the court is entitled to place less weight on it in the overall conclusion.

    1. I have also had regard to the criticism that Mr Mallalieu QC takes of the approach of the Respondent, referred to at sub-paragraph 3 of the points made by Mr Seaward recorded at paragraph 15 above. Those comments, and the comments of the Judge referred to at paragraph 39 above, might be suggestive of a view that the costs of the inquest should be recoverable because it would be unfair for the Respondent’s lawyers to leave her without representation. I agree with the Appellant that, whilst it might be considered desirable for funding to be more widely available for representation of families at inquests, that is not a reason to order that such costs ought to be paid inter partes in circumstances such as these. The question of the funding of representation at inquests is a controversial topic but one that cannot be solved be a Judge-led solution that imposes those costs on tortfeasors in civil litigation in circumstances where the inquest did not relate on matters in issue in the civil proceedings.
    2. However, whilst Judge Harris recorded a concern about the position of the respondent were she to have been left unrepresented at the inquest, I can see no basis for concluding that this influenced his judgment on the central issue identified above.
Conclusion
  1. It follows from the above that I see no error in the judgment of District Judge Harris sufficient as to justify this court interfering with his judgment. On the contrary, he carried out a balancing exercise on the facts of the case and reached a conclusion that lay well within the proper ambit of the exercise of his evaluation of the facts. In those circumstances, costs of preparing for and attending the inquest are costs “of and incidental” to the instant claim and are in principle reasonable and proportionate is a conclusion that he was entitled to reach, and the appeal is dismissed.
  2. I emphasise that, beyond this point of principle, the question of whether the amount of those costs is reasonable and proportionate remains a matter for assessment by the Costs Judge in dealing with the remainder of the assessment process, to which the usual principles apply.
  3. The parties have agreed a consequential order, having seen the terms of this judgment in draft. I make an order in those terms.