Derby County Court has recently provided a useful judgment regarding the interpretation of CPR 44.15 (c). The rule provides an exception to qualified one-way costs shifting (QUOCS) following a strike out of a Claimant’s statement of case as a result of the Claimant’s conduct obstructing the just disposal of the proceedings.
It was previously unclear what type of conduct and obstruction would implement the exception. It was open to interpretation and likely to be fact specific to a particular strike out.
This matter arises from a foreign holiday taken by the Claimant and two other holidaymakers on 20 August 2012 for 7 nights. The Claimant made a number of bookings over the telephone with the Defendant which included return flights from East Midlands airport to Corfu, 7 night’s all-inclusive accommodation at the Corfu Sea Gardens and airport transfers.
During the stay at the Corfu Sea Gardens the Claimant alleges that she became ill as a result of poor hygiene standards at the hotel. The Claimant issued proceedings against the Defendant pursuant to the Package Travel, Package Holiday and Package Tours Regulations 1992 (PTR) alleging that the Defendant supplied a package holiday and was therefore vicariously liable, pursuant to the PTR, for the acts and/or omissions of the suppliers who performed the obligations under the travel contract. The proceedings were issued on 6 September 2015 and served upon the Defendant’s solicitors, on 12 December 2015. It appeared that the matter was issued outside of limitation however, the papers were brought to the court on time. Perhaps an early indication as to how this matter was to be run; by a Claimant who eventually exhausted all bites of the cherry.
The Defendant’s defence was twofold. Firstly, the Defendant denied that a package holiday was supplied and therefore denied that they were vicariously liable for the acts and/or omissions of the hotel. Secondly, in the event that the Defendant should fail on the first point, the Defendant denied that the hotel’s hygiene standards were poor. The defence was filed and served in February 2016. Directions were set and the trial was listed for 20 September 2016.
Standard disclosure by list was due by 4pm on 25 May 2016. The Defendant received the Claimant’s unsigned list late on 31 May 2016 followed by a signed list on 6 June 2016. On 2 June 2016 the Defendant requested to inspect 2 items from the list (various holiday photographs and GP Records). The Claimant was obliged to comply with this request within 7 days; by 9 June 2016.
The parties were due to exchange lay witness evidence by 4pm on 6 July 2016. By 18 July 2016, the Defendant was still not in receipt of the requested documents or the Claimant’s witness statements and so put the Claimant on notice that an application for strike out would be made within 7 days.
The application was filed and the application hearing was listed for 16 August 2016. In response to the application the Claimant made an application for relief from sanction, thereby accepting the breaches. The court made an Unless Order which provided the Claimant with a deadline of 4pm on 19 August 2016 to comply with the directions Order; namely that the requested documents (photographs and GP records) be disclosed, witness statements served, and also for the updated schedule of special damages now due to also be served. Failure to comply would result in the matter being struck out.
On 18 August 2016 the Claimant disclosed, via email, GP records and 2 witness statements. No photographs or updated schedule of special damages was received and the matter duly stood as struck out. The court made an Order confirming the strike out on 5 September 2016. The court also awarded the Defendant’s costs of the action to be assessed.
The Claimant applied to set aside the Order on the basis that there was no updated schedule of special damages to serve and the requested photographs were emailed to the Defendant in June 2016. The Claimant submitted that the Unless Order had therefore not been breached. The Defendant denied ever receiving the email, in June 2016 or at all, and assumes the Claimant must have received a failure notification.
Why the Claimant had not previously alerted either the Defendant or the court to this June 2016 email, for example at the hearing on 16 August 2016 or in response to the Unless Order, remains to be seen. The production of the photographs went to the very heart of the strike out and the opposing solicitor’s had emailed on several occasions on the subject and reference to the photographs being emailed in June 2016 was never made. On the contrary, the Claimant seemed to previously accept that there had been a breach in failing to disclose the photographs and a September email from the Claimant’s solicitor to the Defendant’s solicitor confirmed they were taking their client’s instructions on the photographs. These positions make little sense if the Claimant believed they had in fact already disclosed the photographs two/three months previously.
At a November 2016 hearing of the Claimant’s application to set aside the Order, the judge was critical of the Claimant only recently referring to the June 2016 email. Serving an additional witness statement, to flesh out the ‘good reason’ limb of the Denton test, on the Defendant’s counsel on the morning of the hearing was also unlikely to gain the judge’s favour. The judge looked at the matter in the round and concluded that the case consisted of ‘a cocktail of toxic ingredients’. The judge dismissed the Claimant’s application and the matter remained struck out.
The judge was not minded to make a finding on CPR 44.15 (c) on whether QUOCS was excluded and preferred to review case law and guidance in this area.
The Claimant submitted that a strike out following a breach of an Order did not satisfy 44.15 (c) and the requirement for conduct to wholly obstruct the just disposal of the proceedings. The parties had to wait until September 2017 for the issue to be heard.
The judge in September 2017 agreed that several breaches of an Order and a breach of an Unless Order was sufficient to satisfy CPR 44.15 (c) and the Defendant was awarded costs of £13,399.50 in an enforceable costs Order. It is worth noting that a strike out following just one single breach of an Order may not be sufficient to exclude QUOCS and for CPR 44.15 (c) to come into play.
For further information on this case please contact:
Claire Scargill, Solicitor
T: 0344 245 5330 | E: firstname.lastname@example.org