WHAT CAN A DEFENDANT ARGUE AFTER JUDGMENT ON LIABILITY: A REVIEW OF THE CASES

August 31, 2023 · by · in Applications, Civil Procedure, Damages

We are looking again at the judgment of Jason Beer KC (sitting as a High Court Judge) in Celebrity Speakers Ltd v Daniel & Ors [2023] EWHC 2158 (KB).  The judge had to consider what a defendant could argue as to damages in a case where judgment had been entered on liability.  There was a review of the case law and principles and the judge held that it was open to the defendants to argue issues of causation.

“It follows from these authorities that it is open to the Defendants to argue issues of causation of any alleged heads of loss pursued by CSL – causation of the heads of loss set out in the Particulars of Claim was not settled by the judgment on liability.”

THE CASE

The judge was considering issues of damages in a case where it was alleged that the defendants had breached contractual obligations and directed work away from the claim company.  The case was initially defended on liability. However the defendants failed to comply with court orders and judgment was entered for the claimant on liability.

THE TERMS OF THE ORDER

    1. Directions were given to bring the claim to trial. However, on the Claimant’s application and following a series of failures by the Defendants to comply with the Court’s directions (including those relating to disclosure and the instruction of an expert witness), on 3rd February 2023 Michael Ford KC, sitting as a Deputy Judge of the High Court made the following Order:
“1. The Defendants’ statement of case is struck out under CPR 3.4(2)(c).
2. There be judgment for the Claimant on liability….
5. Pursuant to CPR 3.1(m) the Court grants permission to the Defendants to participate in the Remedies Hearing to the extent set out in paragraph 6(b), (d) and (e) below.
6. The following directions are made for the Remedies Hearing:
(a) The Claimant shall file…a paginated bundle comprising the documentary and witness evidence upon which it intends to rely at the Remedies Hearing.
(b) The Defendants are entitled to receive an electronic copy of the bundle…
(e) The Defendants may participate in the Remedies Hearing to the following extent only:
(i) They shall serve on the Claimant…a skeleton argument limited to the issues of what remedies, if any, the Court should grant to the Claimant, and the appropriate order for costs.
(ii) If the Defendants serve a skeleton argument in accordance with paragraph (i) above they may also make closing submissions orally upon the issues in paragraph (i) at the Remedies Hearing.”

WHAT COULD THE DEFENDANTS ARGUE IN RELATION TO DAMAGES

The judge considered the case law in relation to the position of defendants after there is a judgment on liability.

 

First Issue: on what factual basis should the Court determine the remedies that should be granted to the Claimant, in the light of the fact that the Defendants’ statement of case was struck out and judgment was entered for CSL?
    1. The general approach is that set out by Carr J, as she then was, in New Century Media v Makhlay [2013] EWHC 3566 (QB) at [30] – the matters pleaded in the Particulars of Claim stand as a proxy for a judgment that would otherwise set out the basis of the liability of the Defendants; it is not open to the Defendants to go behind the pleas in the Particulars of Claim that established liability; however, damages still have to be proved, and the Defendants can raise any issue which is not inconsistent with those matters set out in the Particulars of Claim that established the liability of the Defendants to pay some damages.
    1. The general position requires development in circumstances where the Defendants argue (namely under “Issue 4”) that CSL has not established that the Defendants caused CSL loss or damage and CSL argues that the Particulars of Claim have necessarily established that Defendants have caused CSL loss and damage.
    1. The question of the extent to which a default judgment (or similar) establishes the causation of some loss and damage has been addressed many times in the past:
a. In John Turner v P.E Toleman (1999), unrep., 15th January the late Simon Brown LJ, admittedly in a judgment refusing permission to appeal to the Court of Appeal on a renewed oral application for permission, had cause to consider the effect of obtaining summary judgment – with damages to be assessed – in a claim for damages for personal injuries in circumstances where the claimant argued that the judgment determined not just liability issue, but also causation, including the question of the attributability of the claimant’s injury to the accident. Simon Brown LJ profoundly disagreed, holding “No doubt defendants must acknowledge some injury to a plaintiff before judgment could properly be entered against them, otherwise the cause of action is not complete…That is a far cry from saying that they are liable for each and every aspect of loss and injury which the plaintiff in his pleaded claim asserts he suffered…That has everything to do with quantification and nothing to do with basic liability.
b. In Lunnun v Singh (1999), unrep., 1st July the Court of Appeal (Clarke LJ, Peter Gibson LJ and Jonathan Parker J) approved Turner in circumstances where judgment in default, with damages to be assessed, had been entered on a claim alleging a water and sewage leak which had caused damage to a neighbouring property. The defendant subsequently sought to argue that issue was taken not merely with the quantum of the damage claimed, but also with causation – namely the allegation that there was a causal link between the damage and the leak. The Court of Appeal agreed, Jonathan Parker J holding “…it is…inherent in the default judgment that the defendants must be liable for some damage…but that, in my judgment, it the full extent of the issues which were concluded or settled by the default judgment…al questions going to quantification, including the question of causation in relation to the particular heads of loss of loss claimed by the claimant, remain open to the defendants at the damages hearing…” Clarke LJ agreed: “The defendant cannot…contend that his acts or omissions were not causative of any loss to the plaintiff. But he may still be able to argue, in the assessment, that they were not causative of any particular items of alleged loss…Moreover he may do so even if the statement of claim alleges a particular item was caused by the tort.”
c. Turner and Lunnun have been consistently followed since they were decided – see e.g. Pugh v Cantor Fitzgerald International [2001] CP Rep 74, Enron (Thrace) Exploration and Production BV v Clapp [2005] EWHC 401 (Comm), Strachan v The Gleaner Co Ltd [2005] 1 WLR 3204, and Symes v St George’s Healthcare NHS Trust [2014] EWHC 2505 (QB).
  1. It follows from these authorities that it is open to the Defendants to argue issues of causation of any alleged heads of loss pursued by CSL – causation of the heads of loss set out in the Particulars of Claim was not settled by the judgment on liability.

 

 

 

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