A cautionary tale – Gary Broadley v UK Insurance Ltd

The recent case of Gary Broadley v UK Insurance Ltd [2018] SC Edin 34 provides a cautionary tale for Insurers and demonstrates the potential pitfalls and the serious consequences which can arise if administrative procedures fail.

The case came in front of Sheriff Peter Braid at the All-Scotland Personal Injury Court on 6 June 2018 for the Sheriff to consider the Defenders’ Reponing Note which sought to repone (recall) the Decree in Absence granted against them for £25,000.

The parties provided a detailed chronology to the Court of the factual background to the case. In short the case related to an accident which had taken place on 25 February 2016. Claims for damages, both on behalf of the Pursuer and indeed on behalf of the Defenders’ Insured had been intimated and in fact the Pursuer’s Insurers had settled the Defenders’ Insured’s claim. However, the Pursuer proceeded with a personal injury claim and raised an Ordinary Action seeking damages in respect of injuries together with hire costs of almost £20,000. It had been served on the Defenders by Recorded Delivery on 6 June 2017 with the last date for entering appearance of 28 June 2017. In September 2017 when no appearance had been entered by the Defenders the Pursuer Minuted for Decree in Absence which was pronounced on 22 September 2017.

On 1 November and again on 29 November emails were sent by the Pursuer’s Solicitors to the Defenders informing them that Decree had been granted in absence and when no reply was received the Decree was also intimated to Plexus Law acting on the Defenders’ behalf. Plexus Law promptly sought instructions and were instructed on 17 January 2018. Despite another chaser email being sent on 9 February it was not until 22 March that a file was opened and work began on the case. The Reponing Note was then intimated on 11 April 2018.

Sheriff Braid commented that the test to be applied by the Court in deciding whether or not to allow a Reponing Note was clearly set out in previous case law. The matter was one for the Sheriff’s discretion taking account of all circumstances including the proposed defence and explanation for the non-appearance.

Submissions were made by both Parties which focused very much on the factual background.

The Defenders made submissions regarding the stateability of the proposed defence indicating that there was a defence on both liability and quantum. In providing an explanation for the failure to appear they pointed to the fact that the Defenders had been dealing with different parties all acting for the Pursuer including The Kerr Brown Partnership, Accident Exchange, Horwich Farley as well as the Insurers themselves and the Solicitors instructed on their behalf.

It was accepted that all the documentation referred to had been received by the Defenders or their Agents including emails advising the Defenders directly that Decree in Absence had been granted. Copies of the Initial Writ and Decree in Absence had been attached. In short it was submitted that the explanation for the emails not being acted upon was simply human error.

Similarly, turning to the actions of Plexus Law it was submitted that again failure down the line was due to human error rather than reckless disregard for Court procedures.

It was submitted that the Pursuer would receive a windfall were Decree be allowed to stand and therefore the Sheriff should exercise his discretion in favour of the Defenders.

On the other hand the Pursuer submitted that the explanation provided by the Defenders for their failure to appear was sketchy at best and it was unclear how various failures along the line had arisen. The Pursuer referred to MacPhail on Sheriff Court Practice and to previous case law to the effect that it was well established it was insufficient to simply submit there had been administrative error. The Pursuer faced prejudice if the Decree were to be reponed after the Action had been raised almost a year previously and the Reponing Note should be refused.

Sheriff Braid accepted the Defenders’ submissions that there was a stateable defence on both liability and quantum. He was not however convinced that they had provided a sufficient explanation for their failure to enter appearance. He was critical of the system in place, commenting that there was a failure to check the system in operation, leaving mistakes undetected. The Defenders had had an opportunity to take remedial action when they were emailed in November 2017. Even the fact that the emails were headed Extract Decree for Payment had not however been sufficient for the email to be read by a human and acted upon.

Sheriff Braid was not convinced that there was a strong argument in respect of the Pursuer receiving a windfall. Decree had been granted for the sum of £25,000 and almost £20,000 of that had been in respect of credit hire charges which had in fact been paid. This was not a case where for example a Pursuer obtained a Decree for £100,000 in a claim worth £10,000 at most.

Sheriff Braid gave consideration to the interests of justice in a wider sense. He noted that the Court has an interest in ensuring that Actions are raised progressed speedily and efficiently. Defenders, particularly Insurance Companies, should have a proper system for dealing with Actions when they are served to ensure that a Notice of Intention to Defend (appearance) is lodged timeously.

Finally Sheriff Braid stated that the Defenders could not escape the fact that they had no system for dealing with the service of Scottish Writs and no system in place to alert them to any earlier mishaps. When passing of the Decree did come to the Defenders’ attention they took inadequate steps to rectify the situation. As such he considered that this coupled with the considerable delay to the Pursuer to date, outweighed any prejudice to the Defenders and he refused the Reponing Note.

This case therefore goes to demonstrate the risks faced by Insurance Companies if they do not have in place a sufficient system to deal with Scottish Court Procedure. It should act as a warning to all in the industry to make sure they have proper systems and checks in place.

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