IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE ORDER OF HIS HONOUR JUDGE CHARLES HARRIS QC
|Royal Courts of Justice
Thursday, 21st December 2000
LORD JUSTICE KENNEDY
LORD JUSTICE LAWS
MR JUSTICE JACOB
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____________________MISS MARY O’ROURKE (Instructed by Legal Department, Medical Defence Union) appeared on behalf of the Appellant
MR DUNCAN PRATT (Instructed by Jay Benning & Peltz of London) appeared on behalf of the Respondent
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- LORD JUSTICE LAWS: This is a defendant’s appeal brought with permission granted by Lady Justice Hale on 9th October 2000 against a decision of His Honour Judge Charles Harris QC, sitting as a Deputy Judge of the Queen’s Bench Division, on 24th July 2000. On that date the judge allowed the claimant’s appeal from the order of the district judge who, as long ago as 17th April 1998, had struck out the claim.
- This is how the case arises. The claimant respondent had a son Wilfred, born on 22nd July 1988. Wilfred suffered from a disease called Type 1 Glycogen Storage Disease. That required certain special forms of feeding. On 9th October 1993 Wilfred’s mother saw that he had started to have a fit. She called the general medical practice of which the defendant/appellant was a member. The appellant went to the house. He treated Wilfred with Diazepam, assured the parents and advised, so it came to be alleged, that Wilfred be taken to hospital for observation. The appellant left the house.
- The parents took Wilfred to the John Radcliffe Hospital. There he was found to be profoundly hypoglycaemic, a condition from which he did not recover. The respondent was at his hospital bedside continuously in daylight and for a short period one night time on 13th October 1993. On that day doctors at the hospital diagnosed the absence of any brain stem activity. On 16th October 1993 the life support system was switched off. Wilfred was pronounced dead. The respondent says he was present throughout these events and it was he who authorised the withdrawal of life support.
- On 8th October 1996 the respondent issued proceedings against the appellant in the Bridgwater County Court claiming damages under the Fatal Accidents Act, essentially for bereavement. This claim was supported by legal aid. The respondent also wished to pursue the appellant for damages for nervous shock allegedly occasioned by his having watched his child deteriorate and die in the hospital. For this legal aid had been refused. The respondent issued proceedings asserting this head of claim upon his own initiative. He did so in the High Court on 14th October 1996 before the expiry of the three-year limitation period. It is right to say that at that stage there was only a generally endorsed writ asserting a claim for damages for personal injury. This nervous shock claim came to be supported by a medical report from a consultant psychiatrist. His Honour Judge Harris was to say:
“It has not been argued that the conditions from which the claimant is said to suffer do not constitute conditions for which he might obtain damages, although I should have thought they might be fairly near the margin.”
- In the bereavement action £10,500 was paid into court on 7th January 1998, and on 23rd February 1998, in circumstances to which I must return, that action was compromised by a consent order to the effect that the money in court be paid out to the respondent or his solicitor in full and final satisfaction of the bereavement claim.
- Four days later, on 27th February 1998 the appellant issued his application for an order that the nervous shock claim in the High Court be struck out. The principal ground on which that application was made was that the nervous shock action was abusive because it had been issued and continued in violation of the well established principle enunciated by Sir James Withram V-C in Henderson v Henderson  3 Hare 100, 114-115:
” ….. I believe I state the rule of the Court correctly when I say that, where a given matter becomes the subject of litigation in, and of adjudication by, a court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter that might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case.”
“The issue in this case is whether there are special circumstances. To use the expression employed both by Withram V-C and Stuart-Smith L.J.,”
“are there special circumstances why the rule should not be applied in its full rigour?”
- The judge then proceeded to discuss all of the circumstances of the case respectively relied on and, taking the matter shortly, held that there were special circumstances. He was particularly moved by the legal aid position in coming to that conclusion. So it was that the nervous shock claim was reinstated.
- In this appeal the appellant, by Miss O’Rourke, originally asserted that the Henderson principle applied and should have been applied by the judge and there was no basis for a finding of special circumstances. It is useful just to refer to this short passage from Miss O’Rourke’s first skeleton argument at paragraph 3:
“The alleged negligence and primary damage allegedly caused (death of child) were identical. The two sets of proceedings were started within the same time period. The failure to include the claim for nervous shock or to consolidate the proceedings was adeliberate one. So too was the decision to settle the action for bereavement knowing of the principles in Henderson. There was no good reason why the claims were not joined and the present claim included. Lack of fund to litigate is not considered a good reason in limitation or other cases and should not be so considered here. Particularly not where the lack of funding results not from a means assessment but from an adverse assessment of the merits of the case.”
- Before proceeding further I should, in summary form, say a word about the legal aid position. Before issuing the proceedings claiming damages for nervous shock the respondent had sought legal aid to challenge the refusal of the Reading Legal Aid Board to grant legal aid for that nervous shock claim. Such legal aid was refused in December 1996. Thereafter the respondent acting in person sought a judicial review of the decision of the Reading Legal Aid Board. On 11th October 1997 Mr Justice Carnwath gave judicial review leave. Negotiations and discussions followed. On 3rd December 1997 the Legal Aid Board gave a fresh date – 10th March 1998 – for a fresh committee hearing at length. On 19th March 1998, about four weeks after the consent order in the bereavement action, the Legal Aid Board decided to issue a legal aid certificate in relation to the nervous shock claim. It was after this, on 9th April 1998, that the statement of claim was served in that action. It is plain that the principle in Henderson v Henderson applied in personal injury litigation (see Talbot v Berkshire County Council  1 QB 290 to which I have referred in passing). Indeed, it would be extremely surprising were it otherwise. The Henderson principle has been elaborated in a number of later authorities. The judge below cited the judgment of Sir John Donaldson MR, as he then was, in Buckland v Palmer  1 WLR 1109. Given more recent and determinative developments in the learning on this subject, I need not set out any of the earlier texts.
- The respondent’s first submission in his first skeleton argument (paragraph 2) was that the rule in Henderson has no application to a case where the proceedings raising the second or further claim – here the nervous shock proceedings – were to the knowledge of the defendant extant and live at a time when the defendant chose to settle the earlier proceedings (here the bereavement claim). I would not have accepted, if it were put as a freestanding proposition of principle, the contention that Henderson could have no application to a case where one set of proceedings had settled in the face of both parties’ knowledge and another action is outstanding based on the same factual contentions as to the defendant’s alleged negligence. It would depend upon the exact facts and the mutual understanding of the parties. However that may be, Henderson, taken on its own, is no longer the approach. The principle in Henderson now has to be looked at in the light of a very recent decision of their Lordships’ House in Johnson v Gore Wood & Co, 14th December 2000. In that case a claim for damages for professional negligence by a company against a firm of solicitors was compromised six weeks into the trial. That was in late 1992. In April 1993 an individual, whose corporate embodiment had been the company, issued fresh proceedings against the solicitor’s firm for breach of duty. He claimed that the solicitors owed him as well as the company obligations in contract and tort in relation to the subject matter of the company’s earlier claim. It was not at first suggested that these second proceedings were abusive. The parties pleaded and re-pleaded their cases for four-and-a-half years. Late on 3rd December 1997 the defendant’s solicitors intimated an intention to strike out the action as an abuse. The judge found that the defendant was estopped by convention from so contending.
- The Court of Appeal dismissed the claim as abusive. That decision was reversed by their Lordships’ House. Lord Bingham of Cornhill reviewed the authorities and said this (I am quoting from pages 12 and 13 of the Butterworth text taken from the Internet, there being no official report of the case yet):
“Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional elements such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceedings involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts in the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not. Thus while I would accept that lack of funds would not ordinarily excuse a failure to raise in earlier proceedings an issue which could and should have been raised then, I would not regard it as necessarily irrelevant, particularly if it appears that the lack of funds has been caused by the party against whom it is sought to claim. While the result may often be the same, it is in my view preferable to ask whether in all the circumstances a party’s conduct is an abuse than to ask whether the conduct is an abuse and then, if it is, to ask whether the abuse is excused or justified by special circumstances. Properly applied, and whatever the legitimacy of its descent, the rule has in my view a valuable part to play in protecting the interests of justice.”
- As I see the matter, it is our duty to decide whether the issue or rather continuation of the nervous shock claim in this case amounted to an abuse approaching the matter so as to arrive at a broad merits-based judgment, taking account of all the facts and recognising that there is an underlying and important public interest to the effect that a party should not be vexed twice in the same matter.
- In order to reach a decision we are required, it seems to me, and is acknowledged by the council, to look somewhat more closely at the facts than might have been the case before Johnson v Gore Wood & Co, in particular, the facts surrounding the compromise of the first claim. The appellant places some emphasis on the fact that the respondent, in addition to issuing the second set of proceedings, complains to the General Medical Council about the appellant in 1997 and when the General Medical Council indicated an intention not to investigate further the respondents sought judicial review. No statement of claim in the nervous shock action was served until 9th April 1998. The respondent’s solicitor at the time – Mr Hannam – in an affidavit of 9th October 1998 states in paragraph 5:
“At no time during my conduct of the County Court case did I ever intimate or otherwise accept that the £10,500 offered by the defendants in settlement of the County Court action was anything other than a settlement of that case alone. Nor did the defendants’ representative ever indicate to me that she regarded the aforesaid offer as a settlement of both actions.”
“In the County Court action, the defendants did on the 8th January 1998 pay into court the sum of £10,500 in satisfaction of his claim. The consent order states that the sum of £10,500 is to be paid to the plaintiff ` ….. in full and final satisfaction of the plaintiff’s claim herein ….. ‘. The word ` ….. herein ….. ‘ was inserted specifically to distinguish and separate the County Court action from this action and protect the plaintiff’s personal injury claim.”
“On the 8th April 1998 Dalla Mala Ross of the Medical Defence Union, representing the defendants, swore in her affidavit at paragraph 10 that the aforementioned £10,500 had been paid `….. into court in the County Court proceedings and this was accepted ….. ‘”
“` ….. is using these proceedings as a weapon for personal reasons, having already been compensated in financial terms by way of settlement of the County Court proceedings ….. ‘”
“I do not believe Ms Ross is referring to the plaintiff’s personal injury claim but to the Fatal Accidents Act claim.”
- However one takes that evidence, we have better evidence in the shape of contemporary correspondence. There has been put before us – and at the outset of the hearing we gave permission for it be admitted – a witness statement of 18th December 2000 by the appellant’s present solicitor, Christine Freedman. She exhibits the correspondence, and I go to it directly. On 14th February 1997 Miss Ross of the Medical Defence Union wrote to Mr Toth, who was then acting in person, indicating that she acted for the appellant and his partner who was also at that stage being sued and said:
“I await service of the statement of claim accompanied by the documents specified in Rules of the Supreme Court Ord.18,r.12A.”
“If you wish to discuss this action, please do not hesitate to telephone me. No doubt you will shortly be discontinuing the County Court proceedings which you have commenced against my client in respect of the same cause of action. I suggest that you require urgent legal advice on this point.”
“We refer to our telephone conversation on Wednesday morning, 19 February when we agreed that the writer would forward a draft Order for consideration to dispose of this case.”
“Thank you for your letter of 19th February. I look forward to receiving the draft Order. I assume that you are making provision in some manner for the disposal of both the County Court proceedings and the High Court proceedings.”
- On 3rd December 1997 Miss Ross wrote to Messrs Cunningham John. They were not the same firm of solicitors as had written the letter of 19th February 1997. But it seems clear they had been instructed by the respondent, Mr Toth, although at this stage they were not on the record, so far as I am aware, in either of the two actions, certainly not in the High Court action in which the nervous shock claim was made. The letter of 3rd December 1997 reads in substance as follows:
“I confirm that we have agreed that you will serve a Notice of Discontinuance of the High Court proceedings and that I will agree to there being no order as to costs provided that the Notice of Discontinuance is served forthwith and that further costs will therefore not be incurred in relation to that action.
So far as the County Court proceedings are concerned, you have said that you wish to seek expert advice as to whether your client is suffering from post-traumatic stress disorder. I suggest that we seek to agree the form of a consent order for directions and I confirm that I will be prepared to allow a period of four months before any formal steps are taken in the action whilst you do this, although it is likely that I shall be instructed to pay the £10,000 previously offered into court. I suggest that the Consent Order therefore provides for service of the medical report ….. ” and I may break off there.
“We refer to the writer’s telephone conversation with Miss Ross and would be grateful if you would be so kind as to forward us copies of the pleadings …..
As agreed, we will have a word with Mr Toth to see if we can arrange to discontinue the High Court proceedings and will let you have a consent order for consideration in respect of the further progression of the County Court proceedings.”
“We see that the Writ includes a claim for personal injury – we presume for Post Traumatic Stress Disorder suffered by Mr Toth?
Is that your understanding of the situation?
We are in fact still awaiting instructions from Mr Toth who we wrote to on 4th December. We have written to him again today ….. “
“If I do not hear from you by return in reply to my letter dated 3 December, I shall issue an application to strike out the High Court proceedings seeking an order that your client pay the Defendant’s costs of the action forthwith. I shall also issue an application for directions in the County Court proceedings.”
“Our client is suffering from a psychiatric illness. He finds it extremely difficult to respond to our letters and to give us instructions.
If you make application to the Court we will produce evidence in this regard in order to oppose any application to strike out and indeed to deal with any application for directions you might make in the County Court.
The writer has spoken with Miss Ross and has given her full and frank information as to our client’s position and how we view the present situation.
We have contacted Mr Toth and we are hopeful that there will be a response from him within the next few months.
We do not believe your clients are prejudiced by any delay ….. “
“So far as your third paragraph is concerned, [that was the assertion that evidence would be produced to resist a strike out] I do not consider that the matters to which you refer would have any bearing on the outcome of my application to strike out the High Court claim. Your client is claiming exactly the same relief in two different actions and will not be prejudiced by the striking out of one of them. If your client is under a disability, he will no doubt appoint a next friend to conduct the litigation on his behalf in the very near future. Although, as I have indicated, I believe that your client’s illness is irrelevant to the merits of a striking out application, I would point out in passing that it has not prevented your client from making a complaint to the General Medical Council, so he is clearly not totally debilitated.
It is quite incorrect to say that my clients are not prejudiced by `any’ delay. Mr Peart may care to imagine a situation in which two identical sets of proceedings have been issued against him and a complaint made to his professional body.”
“He’s accepting PIC.”
“Will I defer issuing summons for a week? Me to think about it and call tomorrow. No reason to defer … applic [clearly `application’] bound to succeed.
He thinks more effective to deal in stages.”
“He’s not on record in respect of writ.”
“Mr Toth is prepared to settle the County Court action in the sum of £10,500 paid into Court.
We enclose a Consenet Order and would be grateful if you will be so kind as to sign this and return to us.”
“I return the Consent Order having signed the second page on the basis that the amendments which I ….. ” (the text is corrupt).
“which I have made to the first page be made. I presume that these will be unobjectionable as far as you are concerned. Assuming that this is the case, I am happy for you to amend page 1 and submit it to the court with the signed page 2. I await hearing from you with the sealed Order.
I confirm and I shall take no action in relation to the striking out of the High Court action until Wednesday 25th February 1998 in the hope that your client will voluntarily have discontinued the proceedings in the meantime. If this does not occur, I shall issue an application immediately and there will be no scope for further discussion on the point.”
- The consent order is before the court and clearly records that the money is taken out and the County Court proceedings are settled by consent.
- What then does one get from these exchanges? In her supplementary skeleton argument prepared in the light of their Lordships’ decision in Johnson, Miss O’Rourke submits as follows:
“8 The appellant’s case on this chronology is that in December 1997 prior to making the payment into court which resulted in settlement of the County Court proceedings there was discussion as to the discontinuance of the High Court claim and that at the time of signing the consent order it was on the basis that that was the end to proceedings as the co-existent proceedings were an abuse (on the basis that the rule in Henderson v Henderson and bringing all claims in one action).”
- If the submission was that there was a common understanding that the settlement of the County Court proceedings, in effect, would put an end to all the claims being made against the appellant, I would not, for one moment, accept that that was the position. In fairness, as I understood her, Miss O’Rourke resiled from so bald a submission when she addressed us this morning.
- Where does that leave the appeal? Miss O’Rourke submitted that the defendant’s solicitor, Miss Ross, subjectively believed that the High Court claim would be discontinued or would be struck out. She submitted further that that was, on the correspondence and in all the circumstances, a perfectly reasonable belief, and, whatever the position as regards the formality of the court record, solicitors were advising Mr Toth, the respondent; and they must have well understood the legal position as it was at the time, based on the principle of Henderson v Henderson. Taking all these and rather more peripheral matters into account, Miss O’Rourke submits that the case is within the description of abuse given by Lord Bingham in their Lordships’ House in Johnson. She was at pains to emphasise that on the facts of Johnson there was a very stark case for allowing the matter to continue. As it seems to me, the letter of 3rd December 1997 to which I have referred suggests that it was contemplated that the respondent’s personal claim be added into the County Court proceedings.
- On 30th January 1998 Cunningham John made it plain they would oppose any application to strike out the nervous shock claim on the basis that their client was suffering from a psychiatric illness. On 17th February 1998 Cunningham John offered to settle the County Court action, but plainly, as I see it, not on the footing that the nervous shock claim would thereby also be duly compromised. That is made abundantly clear by Miss Ross’s own letter of 19th February 1998.
- Thus, in my judgment, the appellant settled the County Court action in the full knowledge that the second claim remained outstanding and would be legally unaffected by that compromise. At any rate, Miss Ross ought to have so appreciated. She should also have appreciated that any application to strike out the High Court claim would most likely be energetically resisted.
- The settlement of the first claim therefore, as it seems to me, cannot assist the appellant in the context of our consideration of an assertion of abuse following their Lordships’ decision in Johnson. If anything, as I see it, the settlement of the first claim could be said to assist the respondent, who is entitled to submit that the appellant settled that first claim well knowing that the issues of merits or demerits of the second claim remained at large. This is not a case of a claimant manipulating the procedures of the court, as for instance by keeping back a second claim until he has a fair wind with his first one, or anything of the kind. But for the difficulties of legal aid, which he did his best to overcome, the respondent would plainly have issued a single claim covering both aspects of the case in October 1996. There is no blowing hot and cold or taking inconsistent positions or anything of that kind. The nervous shock claim was instituted (albeit by a bare writ) effectively contemporaneously with the bereavement claim.
- In my judgment, the nervous shock case cannot – at least since the decision of their Lordships’ House in Johnson – be regarded as abusive. For these reasons I would dismiss this appeal.
- MR JUSTICE JACOB: I agree.
- LORD JUSTICE KENNEDY: I also agree. I am conscious of the fact that the cause of action in relation to this matter arose as long ago as October 1993. I am conscious of the fact that the defendant in the action is anxious that these proceedings should be brought to an end. It seems to me that despite the decision which this court has given today, the matter should now come to a speedy end and no doubt steps will be taken in the court below to ensure that that comes about.