COST BITES 124 : EARLY VIEW AS TO VALUE OF A PERSONAL INJURY CASE WAS NOT UNREASONABLE: DEFENDANT’S APPEAL DISMISSED

I am grateful to solicitor John McQuater for sending me a copy of the judgment of HHJ Sadiq in Drury -v- Yorkshire Aggregates Limited (a decision made in January this year, but the transcript has only just become available).  It concerns the reasonableness of a decision by a claimant’s solicitor that a personal injury action had a value of more than £25,000. The District Judge held that it was reasonable for the solicitor to hold that view at the time the letter of claim was written. The Defendant’s appeal on this issue was unsuccessful.  A copy of the decision is available here.  Drury v Yorkshire Aggregates – Approved Judgment – 12.01.2023 v1

“The test is a relatively simple one. Was the valuation in excess of £25,000 objectively unreasonable or not as at the date of the letter of claim in June 2018 based on the evidence available at that time?”

LESSONS THAT FLOW

The District Judge was clearly assisted by the fact that a detailed employment history had been taken which supported the view that there could be an issue in relation to disability in the labour market. The case emphasises the need for a clear record to be available of the reason that these decisions are taken with enough information being recorded to show how the conclusion was reached.

THE CASE

The claimant suffered a hand injury at work, with a fracture to his right dominant finger. He brought a claim against the defendant.  He instructed solicitors. Those solicitors wrote a letter of claim under the Pre-action Protocol for Personal Injury Claims, not the Protocol for Low Value Claims.  The defendant made an offer of £11,000 which was not accepted.   Proceedings were then issued. A schedule served during the proceedings put a value on the claim of two years net loss of income £50,000.

However the claimant later accepted the defendant’s earlier Part 36 offer of £11,000 out of time.   An order was made agreeing that the defendant was to pay the claimant’s costs up to the lasts date the Part 36 offer could have been accepted in time.

THE ASSESSMENT OF COSTS

The primary issue on assessment was whether the matter should have been subject to the fixed costs in the Protocol for Low Value Claims. This required the court to consider the information reasonably before the claimant’s solicitor when the letter of claim was written.  The District Judge found that it was reasonable for the claimant’s solicitor to believe that the claim had a value in excess of £25,000 and costs should be assessed on that basis.

THE DISTRICT JUDGE’S DECISION

I now deal with the District Judge’s decision. There is an approved transcript of the
proceedings and the judgment in the appeal bundle which I have read and re-read. In
summary, in deciding that the claimant’s solicitor had not acted unreasonably in valuing
the claim at over £25,000 at the relevant time, the District Judge considered the
following:

i) Regarding general damages that it was not unreasonable to value general
damages in bracket (k) of the relevant JS Guidelines, namely the 14th edition,
which involves a partial loss of the index finger and a bracket of between
£10,600 up to £16,420 (see paragraph 27 of the transcript of judgment).

ii) Regarding special damages, by the date of the letter before action on 27 June
2018, the amount was £69.43. At this time, it was not in dispute there is no loss
of earnings and the District Judge said, “This was not a strong case for thinking
there was going to be a loss of earnings claim in the current job” (see paragraph
30).
iii) Regarding disadvantage on the open labour market, the District Judge decided
at the time of the letter before action it was reasonable for the claimant to claim
for handicap on the open labour market (see paragraph 41 of the transcript of
the judgment) and that the claimant might or could get an award for handicap
on the open labour market and the claimant was reasonable to think this was the
case (see the top of page 69 regarding the reasons given for refusing oral
permission to appeal)

THE DEFENDANT’S UNSUCCESSFUL APPEAL

The defendant appealed that decision. The appeal was unsuccessful.

27. The test is a relatively simple one. Was the valuation in excess of £25,000 objectively
unreasonable or not as at the date of the letter of claim in June 2018 based on the
evidence available at that time?

28. I now turn to the grounds of appeal. Ground 1, which I will paraphrase as “the
substitution point” fails. My reasons are as follows. First, in my judgment, it is clear
that the District Judge did evaluate the reasonableness of the claimant’s evaluation. At
paragraph 9 of the transcript, he said, “…do I think the claimant has acted unreasonably
by valuing the claim at more than one £25,000…” Further, at paragraph 10 he said, “In
answering that question about whether the claimant has been unreasonable…” Still
further, at paragraph 18 of the transcript of the judgment, he said, “I think there needs
to be a positive finding of unreasonableness by the claimant in valuing the claim at
more than £25,000”. Further, in the context of the evaluation of the claim for general
damages at paragraph 23, he said, “Mrs Beasley [that is the claimant’s solicitor] says,
based on what the claimant/the claimant’s solicitors knew or ought to have known at
the time, it was not unreasonable for the claimant to think the claimant could value a
claim for general damages in accordance with bracket (k). On the evidence, I agree and
conclude it was not unreasonable to value the claim in accordance with bracket (k)”.

29. Then, regarding the District Judge’s decision at paragraph 42, he said this, “For me to
make a finding on reasonableness, I consider I need to have sufficient evidence to lead
me to have sufficient doubt that the claimant could not reasonably value the claim at
more than £25,000 at that time”. He then continued, “However, my judgment is that,
in light of what appears the claimant knew at the time of valuing the claim as more than
£25,000, I am not going as far as to find that the claimant acted unreasonably in valuing
the claim at that time at more than £25,000″. All these paragraphs of his decision point
to the fact that it is clear that the District Judge did evaluate objectively the
reasonableness of the claimant’s valuation and did not substitute his own view for it.

30. Second, when evaluating the reasonableness of the claimant’s evaluation the District
Judge undertook the assessment at the date of the letter of claim in June 2018, which
was the correct date. I repeat here paragraphs 23 and 42 of the transcript of the judgment
which refer to the “relevant time” issue. Further, at paragraph 29 regarding the special
damages claim, the District Judge referred to “At the point of the LBA (namely, the
letter before action) on 27 June 2018…”

31. In the context of the disadvantage on the open labour market claim, the District Judge
referred to at paragraph 33, “…it was reasonable at the time of doing the LBA to
conclude that he would be disadvantaged on the open labour market…”. At paragraph
34, he said “At the time of the LBA…”. At paragraph 39, midway down, he said “…at
the time of valuing the claim in the LBA”.

32. The third reason for why Ground 1 fails is that, in my judgment, it is also clear that the
District Judge undertook the assessment of the claimant’s valuation based on the
information known to the claimant’s solicitors at the relevant time in June 2018.
Regarding the general damages claim, he referred to the relevant edition of the JS
Guidelines in force at the time accepting the claimant’s solicitor’s submission (see
paragraph 19). The District Judge also referred to the claimant’s file note of evidence
dated 16 February 2018 over four months prior to the letter of claim in June 2018 (see
in particular at paragraph 25 and again at paragraph 32) and he considered the letter
before action or letter of claim regarding the assessment of the claimant’s valuation (see
in particular paragraphs 28, 33 and 39 midway down).

33. The defendant submits that there was no quantum advice to support the claimant’s
valuation and/or there was no evidence of any calculation of value in the attendance
note or otherwise. However, I am satisfied that the District Judge considered this point.
Mr Hogan, counsel for the defendant, raised this point in oral submissions (see page 57
of the transcript of proceedings). The valuation is not unreasonable simply because it
has not been recorded in writing in detail. The simple question for the District Judge
was whether the claimant’s valuation of the claim in excess of £25,000 at the relevant
time in June 2018 was reasonable or not. It appears to me that the District Judge was
able to decide that issue based on (i) the file note which included the description of the
injury, the treatment and the work history which was relevant to the disadvantage on
the open labour market claim; (ii) the letter of claim; and (iii) the claimant’s solicitor’s
submissions regarding the valuation.

34. Finally, regarding the test to be applied on the appeal as per Prescott, in my view there
is no identifiable flaw in the District Judge’s treatment of the question to be decided
such as a gap in logic, a lack of consistency or a failure to take account of some material
factor which undermines the cogency of the conclusion. For all those reasons, Ground
1 fails.

35. Ground 2 is what I would describe as the “burden of proof” point. Just to repeat ground
2 is as follows: “The district judge was wrong in principle and erred in law by failing
to take as the starting point the evidential burden and onus of persuasion was on the
claimant as the receiving party and recipient of £11,000 settlement to explain why the
claim could reasonably be valued at over £25,000 when the letter of claim was written
in June 2018”.
36. Ground 2 of the appeal also fails for the following reasons. Firstly, the simple question
for the District Judge to answer was whether the claimant’s valuation of the claim in
excess of £25,000 at the relevant time in June 2018 was reasonable or not, which the
District Judge did consider and address. Second, in my view the burden of proof issue
did not assist in the circumstances of this case. Neither party in their written skeleton
arguments referred to the burden of proof issue adequately or at all. Mr Hogan, counsel
for the defendant, did not say in the hearing below that the burden of proof was decisive
in the circumstances of this case (see the middle of page 66 of the transcript of the
proceedings).
37. What Mr Hogan did say is that this being an assessment of costs on the standard basis
and, therefore, CPR 44.3(2)(b) applied. But I agree with Mr Latham, counsel for the
claimant, in his written submission that the difference between the settlement figure
and the £25,000 threshold should have little or no bearing on where the burden of proof
lies. I would also agree with his submission regarding where the line should be drawn
regarding the settlement figure.
38. But, in any event, one has to consider the whole of the District Judge’s judgment, not
just one paragraph which was relied upon by Mr Hogan for the defendant. It is clear to
me that the District Judge did acknowledge that he was performing a costs assessment
on the standard basis and that any doubt should be resolved in favour of the paying
party i.e. the defendant. At paragraph 15, he said, “If CPR 44.3(2)(b) is then the relevant
guide, then I take it that Mr Hogan says the court should have “sufficient doubt” as per
CPR 44.3(2)(b)”… Further, at paragraph 42, he said, “For me to make a finding of
unreasonableness, I consider I need to have sufficient evidence to lead me to have
sufficient doubt that the claimant could not reasonably value the claim at more than
£25,000 at that time”. For all these reasons, Ground 2 fails as well.

39. Grounds 3 and 4 are an appeal regarding the sufficiency of evidence. Given that they
are appeals against the sufficiency of evidence, it is common ground that I have to be
satisfied that there was no evidence in support of the District Judge’s findings regarding
the claimant’s solicitor’s assessment of (i) general damages and (ii) disadvantage on the
open labour market. That is a high threshold to overcome for the defendant. I cannot
conclude that there was no evidence regarding the District Judge’s findings in relation
to these matters and, therefore, Grounds 3 and 4 also fail. My reasons are as follows.

40. Firstly, in relation to the general damages claim, based on the claimant’s solicitor’s file
note of 16 February 2018, there was evidence from which the claimant could reasonably
conclude that the claimant’s injury fell within bracket 7(k) of the relevant JS Guidelines
in force at the time for partial loss of index figure which covers also injuries to the index
finger giving rise to disfigurement and impairment of grade 4 dexterity and the bracket
between £10,670 up to £16,420.

41. The District Judge, in fact, dealt with this in some detail in his judgment at paragraphs
23 to 27, noting in particular from the file note that the claimant had suffered a crush
injury resulting in a fracture to the dominant index figure which required an operation.
There was impaired sensation and dexterity and disfigurement. As regards the claim
for disadvantage at open labour market, based on the file note and the claimant’s
solicitor’s submissions to the District Judge, I am unable to conclude that there was no
evidence in support of the District Judge’s findings that there could have been a claim
for disadvantage on the open labour market.

42. Again, District Judge Preston dealt with this matter in some detail at paragraphs 31 to
39 of the transcript of judgment. In particular, he considered the file note and the note
of the claimant’s working history which was clearly relevant to a claim for disadvantage
on the open labour market. He also considered the claimant’s solicitor’s submissions
that, if the claimant could not work as a HGV driver in the future for whatever reasons,
there were other jobs that the claimant had previously done which he was now unable
to do or disadvantaged from doing because of the impaired dexterity caused by the
injury (see in particular paragraph 33). He also considered the later medical report of
Mr Knight which supported a potential claim for disadvantage in the open labour
market, but was careful to acknowledge that the claimant did not have that medical
report at the time (see paragraph 39).

43. I have also taken into account that the decision regarding the valuation of which
Protocol to follow is taken at an early stage based upon limited evidence. I have also
taken into account the defendant’s submission that there was no evidence of a written
valuation of the case in excess of £25,000 at the time and no reasons given why the Part
36 offer of £11,000 was accepted. Regarding the first point, in my view that was not a
determining factor. The question simply is whether the claimant’s valuation was
reasonable or not based upon the information known at the time. I have no doubt that
the district judge was alive to this point, namely the lack of a written valuation of the
case in relation to quantum because it was raised in oral submissions by Mr Hogan,
the defendant, at the hearing below (see pages 57 and 58 of the transcript
of the proceedings).
44. Regarding the second point and the lack of reasons given for accepting the Part 36 offer
of £11,000, again I have no doubt that the District Judge was alive to that point as well
given that it was raised by Mr Hogan in his oral submissions in the court below (see the
bottom of page 67). But, in any event, this is no discrete ground of appeal that the
District Judge failed to consider that no reasons were given by the claimant for
accepting the offer of £11,000. Grounds 3 and 4 both focus on there being no evidence
of any valuation of the claim for general damages or disadvantage on the open labour
market. There was, in any event, a potential reason. Part 35 of the replies from the
claimant’s medical experts at page 170 and dated 13 July 2020 undermined any
significant claim for disadvantage on the open labour market. For all these reasons,
Grounds 3 and 4 fail and, therefore, the appeal is dismissed.