Compulsory pre-action protocol and expenses

In the case of Zdrzalka v Sabre Insurance (2018) SC EDIN 57 Sheriff McGowan had to consider the parties’ respective Motions for Expenses against a background of the Personal Injury Compulsory Pre-Action Protocol (CPAP).

The Pursuer sought expenses following a Tender and Acceptance and the Defender opposed the Motion on the basis the expenses should be modified and there should be a contra-award in favour of the Defender.

Pre-litigation the Defender had made a non-binding admission of liability which was a breach of the CPAP.  The Defender argued that there had not in fact been a breach and that it was reasonable to put forward a non-binding admission of liability while the question of indemnity was being considered.

Sheriff McGowan considered the relevant Rules of the CPAP and took the view that any obligation not to sue “flew off” if the Defender did not provide an unqualified admission of liability.  In the absence of such an admission the Pursuer was free to sue.

The Sheriff commented that he did not have any doubt that in making the non-binding admission of liability the Defender did act in good faith.  However the result was to leave the Defender exposed given the terms of the CPAP.

The second issue before the Court related to a delay in disclosing the Medical Report.  The Sheriff said that in general terms if Medical Reports are to be relied on they should be disclosed within a reasonable period of their having been obtained.  Failure to do so could have expenses consequences.

In considering the dates in this particular case he found that it had been dated 24 June and had been received a few days later by the Pursuer’s Solicitors.  It was reasonable to allow a period to consider the Report and to check its accuracy with the Pursuer.  A Writ had been warranted on 11 July and served on the Defender on 18 July.  The Report was disclosed on 26 July.

He took the view that in this particular Action the Medical Report should have been disclosed no later than the date on which the Writ was served.  In the course of submissions the Sheriff was told “It was the Pursuer’s Agents’ policy not to disclose Medical Reports until Actions were defended.”

He noted that there was no explanation or justification offered for such a “policy” but the Court’s discretion to consider expenses could not be restricted by “the internal policies of practitioner firms.”

The Medical Report having been disclosed, there was then a settlement in a short period of time.  The Sheriff considered that had the Pursuer’s Solicitors acted reasonably and disclosed the Medical Report, at the latest by the time the Writ was served, there would have been settlement within a similar period of time.  Effectively there would have been settlement within the Notice period when the Action would still be technically “undefended”.

The Sheriff therefore concluded that the Pursuer’s Solicitors’ conduct could be criticised and that this should be reflected in considering expenses.

Consequently, on the basis the Defender would have incurred legal expenses even if the Medical Report had been intimated at the point the Sheriff considered appropriate, he found the Defender liable to the Pursuer for expenses to the date of the Tender, but modified by 50%. On the same basis, he found the Pursuer liable to the Defender in the expenses from the date of the Tender, but modified by 50%.

This case clarifies (assuming there actually was any misunderstanding) whether or not a Pursuer is entitled to sue if there is no binding admission of liability.  If that occurs, the Defender is in breach of the CPAP.

The Decision also reinforces the need for Pursuer Solicitors to produce Medical Reports within a reasonable period of time irrespective of whether or not any individual firm chooses to have some policy about whether they will or will not produce such Reports.

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