Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION [2013] CSOH 44
A137/09	OPINION OF LORD BANNATYNE in the cause HELEN McGLONE Pursuer; against GREATER GLASGOW HEALTH BOARD Defenders: ________________

Pursuer: Smith QC; Gildeas

Defender: McLean QC, Davidson; N Shippin

19 March 2013

Introduction

[1] This matter came before me by order following my issuing on 14 December 2012 my opinion on the substantive issues raised at the proof.

Expenses

[2] One of the matters which I wished to be addressed upon at the by order hearing was the issue of the expenses of the proof.

Background

[3] The proof before me related solely to the issue of quantum of damages.

[4] The effect of my decision following the substantive proof was this:

I assessed damages as follows:

Solatium £110,000, 75% to the past;

Past wage loss to the date of opinion which was 14 December 2012 £312,500;

Total wage loss and loss of employability (apart from period between the date of opinion and the conclusion of the litigation) £1,742,500. The said figure included the £312,500 referred to earlier as past wage loss;

Pension loss £174,250;

Future therapy £4,000; and

Future plastic surgery £3,750.

Total damages awarded £2,034,500.

[5] It being of some significance in the terms of the argument in relation to the issue of expenses, I now list the tenders which were made on behalf of the defenders, which were as follows:

1. 14 July 2010 (£50,000);

2. 4 November 2010 (£150,000);

3. 5 April 2012 (£450,000);

4. 19 April 2012 (£1,000,000) and lastly;

5. 26 April 2012 (£1.8 million).

The defenders' submissions

[6] The defenders' contention was: that, despite the pursuer being awarded a sum in excess of the figure contained in the final tender, no expenses should be awarded to or by either party in respect of the proof which I heard, and should I not be with the defenders in relation to this particular argument, then there should be significant modification of any award of expenses made in favour of the pursuer.

[7] The defenders' submissions in support of the foregoing general position can be summarised as follows:

[8] The argument advanced on behalf of the defenders fell under four broad heads:

[9] First, the pursuer at the end of the evidence in the case valued her claim at or about £20 million plus interest. The award which I had made was approximately 10% of that sum. The defenders accordingly had had substantial success at proof.

[10] Secondly, the pursuer had failed in many of her key arguments in the case. Substantial portions of the proof had been taken up by these matters.

[11] It was contended in terms of the written submissions before me that the matters in relation to which she had failed were as follows:

i. Whether the pursuer was an accurate and reliable witness;

ii. the degree of the pursuer's continuing physical problems attributable to the index event;

iii. the speed of the pursuer's likely psychiatric recovery;

iv. the appropriate figure for solatium in light of the above, where the defenders' figure was accepted;

v. whether any credence should be given to the defenders' expert witnesses' views on the pursuer's employment prospects;

vi. whether the pursuer would have been bound to get a job as a quant in 2008 and

vii. whether damages for future loss should be calculated using a multiplier/multiplicand approach or the Blamire approach, given the uncertainties about the pursuer's future career;

viii. whether if the multiplier/multiplicand approach was used the discount rate should be set at 2.5% or something else; and

ix. the issue of whether the pursuer has any residual earning capacity.

[12] Thirdly, the pursuer's conduct during the proof which it was submitted had materially lengthened the proof.

[13] Fourthly, the defenders having to fight all aspects of the case blind due to the pursuer not having produced a reasoned estimate of the value of her claim.

[14] A number of authorities were referred to in the course of Mr McLean's submissions as supporting the above arguments and I will turn to consider these in the course of the discussion section of this opinion.

The pursuer's reply

[15] Mr Smith's reply was short and to the point: the pursuer had beaten the tender and that was an end to the matter; she should be awarded the whole expenses of the proof.

[16] He said this in support of his position: if the court acceded to the motion by the defenders, then it completely altered the entire face of litigation in general, introducing uncertainty to all causes. Further, there would be no logical basis for tenders to be lodged in cases, as the determining issue as to whether a party should be awarded expenses would be that there would be a microanalysis of which parts of a claim a person had won on, and which they had lost on.

[17] In reply to the specific points made on behalf of the defenders, he submitted first: it was his position that the court should not seek to microanalyse a proof ex post facto (in order to decide the issue of expenses), and seek to ask itself who had won on any particular issue. In support of this specific submission, he directed my attention to the opinion of Lord Abernethy in Gray v Lanarkshire Health Board 1988 SLT 1378 at 1382B where he observed as follows:

"In saying this I am not to be taken as suggesting that when it comes to the question of expenses the evidence in a proof should be closely examined for an irrelevant question or line of questioning. On the contrary, that in my opinion would be quite wrong and, as I understand it has always been discouraged."

[18] Based upon these observations, he contended that it was not for the court to analyse the nine areas in relation to which the defenders claimed success.

[19] Secondly, in relation to whether the defenders had in fact enjoyed any measure of success, he sated: their tender had been beaten and accordingly they had enjoyed no measure of success.

[20] Thirdly, the defenders he submitted were in no way disabled in valuing the claim by not having a valuation from the pursuer. All of the information which was necessary in order for them to arrive at a valuation of the pursuer's claim was available to them.

[21] Fourthly, nothing in the behaviour of the pursuer should have any effect in relation to the issue of awarding of expenses.

[22] Finally, as regards the various authorities relied on by the defenders, it was his position that none of these supported the defenders' position under any of their heads of argument. He attached significance to the fact that the instant case was confined to the issue of quantum and that this placed it in a wholly different category from the cases relied upon by the defenders.

[23] On the foregoing basis he submitted that the pursuer should be awarded the entire expenses of the proof.

Discussion

[24] The awarding of expenses is a matter for the discretion of the court.

[25] The broad principles to be had regard to when considering the exercise of this discretion are well understood and can be summarised by reference to the following judicial observations:

"An award of expenses according to our law is a matter for the exercise in each case of judicial discretion, designed to achieve substantial justice, and very rarely disturbed on appeal. I gravely doubt whether all the conditions upon which that discretion should be exercised have ever been, or ever will be, successfully imprisoned within the framework of rigid and unalterable rules, and I do not think that it would be desirable that they should be. In MacLaren on Expenses the principle is laid down upon the authority of a number of cases that 'if any party is put to expense in vindicating his rights, he is entitled to recover it from the person by whom it was created, unless there is something in his own conduct that gives him the character of an improper litigant in insisting on things which his title does not warrant'."

Per Lord President Cooper in Howitt v Alexander & Sons 1948 SC 154 at 157.

"The principle upon which the court proceeds in awarding expenses is that the cost of litigation should fall on him who has caused it. The general rule for applying this principle is that costs follow the event. The ratio being that the rights of parties are to taken to have been all along such as the ultimate decree declares them to be, and that whosoever has resisted the vindication of those rights whether by action or by defence, is prima facie to blame. In some cases however the application of the general rule would not carry out the principle, and the court is always on cause shown, considered whether the conduct of the successful party, either during litigation, or in the matters giving rise to the litigation, has not either caused or contributed to bring about the law suit."

Per Lord President Robertson in Shepherd v Elliot 1896 23 R 695 at 696.

[26] In the normal case it follows from the above observations that expenses follow success. It equally follows from that general rule that, if success is genuinely divided, expenses should as well be divided.

[27] Turning to the factual matrix for the argument on expenses before me, I would first observe that the sum awarded to the pursuer exceeded the sum contained in the final tender on behalf of the defenders and accordingly the pursuer beat the tender.

[28] The normal rule is where a pursuer obtains an award in excess of the amount tendered then he or she is entitled to the expenses of the action in that he or she has been successful (see: Quinn v Bowie (No. 2) 1987 SLT 576 per Lord Cullen at 576J). The question therefore for the court becomes this: Are there any circumstances relative to the instant case which would make it appropriate to depart from that general rule? Or put another way: Is there any factor which despite the pursuer beating the tender would make it unjust to award the whole expenses of the proof to the pursuer?

[29] The primary position of the defenders was this: The pursuer had been awarded approximately 2 million pounds, that was approximately 10% of the sum she had sought and not significantly in excess of the tender. It was contended that this alone justified her receiving either no award of expenses or a material modification in any award of expenses in her favour. In my view, this submission is misconceived. The mere fact that the pursuer was not awarded what she sought, was in fact awarded very much less than she sought and in the context of a case which was of high value, her award was not materially in excess of the sum tendered does not justify her being awarded no expenses in relation to the proof or having her expenses materially modified.

[30] It appears to me that if the argument of the defenders is correct, then the whole system of tendering would be undermined.

[31] A pursuer who is considering whether a tender should be accepted or rejected must, in my view, be able to be advised that if he or she obtains from the court an award in excess of the tender following a proof, then expenses will not be modified because the award is much less than was originally sought and perhaps was only slightly more than the tender. I find myself in general agreement with the submission made by Mr Smith that to accede to the defenders' position would introduce a very substantial element of uncertainty into the whole tendering process and that this is not a course to be adopted.

[32] Moreover, this argument appears to run contrary to the decision in Quinn v Bowie (No. 2). In that case, the difference between the figure awarded and the tender was described as de minimis . Nevertheless, Lord Cullen held that this was not a circumstance which would justify him in departing from the normal rule where a tender was beaten, namely: that expenses should be awarded to the pursuer. None of the cases which were relied upon by Mr McLean in the course of his submissions, in my view, supported this contention that he advanced.

[33] I am satisfied for the foregoing reasons that in circumstances where a pursuer has beaten a tender, it is not appropriate to either award no expenses to or by or to materially reduce the award of expenses in favour of the pursuer on the basis that the pursuer has only obtained a much lesser sum than that claimed or on the basis that the tender has only just been beaten or a combination of the two.

[34] Mr McLean's next submission can be summarised as follows: On the basis that the evidence led on behalf of the pursuer in relation to certain matters had not been accepted, the pursuer should not be awarded any expenses or her expenses should be materially modified. There were nine separate branches of evidence led on behalf of the pursuer, which Mr McLean asserted had not been accepted, as I listed earlier in this opinion, resulting in the lengthening of the proof. It appeared to me that branches 5-7 were inter-related and were the principal matters in relation to which it was contended that evidence led on behalf of the pursuer had not been accepted and in consequence the proof had been materially lengthened.

[35] In support of this second detailed argument, Mr McLean in particular relied on the decision in Alvis v Harrison 1989 SC 136: In this case the pursuer had beaten a tender, however, he had failed to establish many of the disputed issues in the case including failing to prove the principal head of damage.

[36] Mr McLean also directed my attention to Ramm v Lothian & Borders Fire Brigade 1994 SC 226: In this case the pursuer had failed to establish a ground of fault and the Lord Ordinary for that and other reasons modified the award of expenses to the pursuer. That decision was not disturbed when the matter was appealed to the Inner House.

[37] I am not persuaded by this argument for the following reasons:

[38] First, I would observe that in the instant case which was a proof on quantum, liability having been admitted, subject to causation which was established in a proof before Lord Tyre, the pursuer sought damages under four main heads. She established a claim under all four heads. She also established her claim in terms of less significant heads of damage. The circumstances of this case are accordingly very different from those in Alvis v Harrison.

[39] Secondly, I note in Ramm v Lothian & Borders Fire Brigade, the following observations of the Lord Ordinary which are referred to in the opinion of the court at 228E-F:

"The evidence in this case demonstrated that the pursuer had initiated and insisted in a case against the defenders themselves for which there was, at best, inadequate evidence and never any evidence of substance."

[40] The Lord Ordinary went on later to say this:

"It appeared to me that in equity the pursuer should not be entitled to any award of expenses against the defenders, given the extent to which he had caused abortive expenditure to be incurred."

[41] The circumstances in the instant case were very different from those outlined by the Lord Ordinary in Ramm v Lothian & Borders Fire Board. I did reject certain evidence led on behalf of the pursuer as regards various issues as broadly outlined by Mr McLean, however, unlike in the case of Ramm v Lothian & Borders Fire Board, this was not because: "at best, (the pursuer only had) inadequate evidence and never had any evidence of substance". In relation to each of these issues, the evidence relied on by the pursuer could not be characterised in this way. With respect to each of the areas of evidence relied upon by Mr McLean I did, to some extent, ultimately reject the evidence led on behalf of the pursuer, however, in each case I believe I had to make a detailed analysis of evidence because there was evidence before me on behalf of the pursuer which required careful consideration and could not be rejected out of hand on the basis that it was really without any substance. In particular in relation to the connected issues 5-7, which as I understand it are the parts of the case upon which Mr McLean was particularly relying in his submissions, they each required anxious consideration and I took a very great deal of time in my substantive opinion dealing with them, which shows that the evidence being relied upon by the pursuer could not be described as being without substance. In Ramm v Lothian & Borders Fire Board, on a consideration of the Lord Ordinary's full opinion (reported 1993 SLT 933) it is clear that he was most dissatisfied with the pursuer's behaviour in relation to the raising of a material part of the action and thus felt bound to reflect this in the award of expenses. In relation to any part of the action upon which the pursuer failed I cannot say that I was dissatisfied with the pursuer's behaviour in putting forth that part of her case

[42] With respect to the final factor relied upon, namely the question of the discount rate, it is of course true that I found entirely in the defenders' favour in relation to this matter. However, the evidence as regards this matter was in the shortest possible compass. As I recall, it amounted to no more than a few questions of a single witness led on behalf of the pursuer. There was no evidence in rebuttal led on behalf of the defenders. The matter was dealt with very succinctly in submissions. Having regard to the law on the matter, I found in favour of the pursuer. I do not believe any material part of the proof was taken up by consideration of this particular issue. I allowed the defenders an adjournment, during the proof having regard to the way in which this particular issue arose in the course of the proof. Apart from that, I do not recall any particular difficulties arising in relation to this matter.

[43] Secondly, in relation to issues 5-7, upon which considerable reliance was placed by Mr McLean, I would observe that I still made a very significant award of damages for loss of income both past and future. The defenders' argument, as I understood it at the time of the substantive proof, although I was not favoured with any figures on behalf of the defenders as to what I should award for future loss of income, was that any award for loss of income should be very small indeed and very significantly less than I awarded.

[44] Thirdly, it is clear from the authorities to which I was referred that, where modification had occurred arising from failure on a pursuer's part to prove part of their case, this had occurred in circumstances where a clearly identifiable and distinct branch of a pursuer's case had failed and further, the part of the proof taken up by that issue could be clearly identified. In my view these circumstances did not exist, in the instant case for the following reasons:

[45] In the instant case, as I have pointed out, in relation to the heads of damages in terms of which she claimed loss, an award was made under each head. Thus unlike in the cases to which I was referred by Mr McLean there is no clearly identifiable part of the pursuer's case in relation to which it could be said she had failed. Moreover, although it could be said that certain lines of evidence on behalf of the pursuer were not established, it could also be said that many of the attacks by the defenders on witnesses of the pursuer failed. In relation to a number of issues to which Mr McLean referred, witnesses were accepted in part and rejected in part. The position was not as black and white as Mr McLean sought to portray it. Rather, as my substantive opinion I believe shows, the position regarding what evidence was accepted and rejected was much more complicated than that submitted by Mr McLean.

[46] In my view, having regard to the factors I have above outlined, what Mr McLean was inviting me to do, was to carry out a detailed analysis of the evidence of the type which Lord Abernethy in Gray v Lanarkshire Health Board observed should not be undertaken. Mr McLean asserted in the course of his submissions that he was not asking me to do this, however, I am absolutely clear that that is exactly what he was inviting me to do. It seems to me that if I had acceded to his argument I would have had to carry out a micro analysis of the evidence and I believe that would not have been a proper course to follow. In any event, even had I judged such a course appropriate I believe the task he was asking me to carry out to be impossible. I would have had to consider the whole evidence in the case and then seek to try and decide to what extent I had accepted or had not accepted a particular witness in relation to a particular issue and then to try and allocate some proportion of the proof to that part of the case and repeat this for each witness.

[47] The next submission from Mr McLean was this: that the actings of the pursuer and her advisers in not producing, despite a number of requests, a detailed valuation of her claim at some stage prior to the proof or at worst during the course of the proof was either an unjustifiable or unreasonable acting on their part.

[48] In my view, there is no substance in this submission.

[49] I do not believe it was improper or unreasonable for the pursuer not to provide such a valuation. There was no legal rule requiring her to do so, unlike in chapter 43 procedure.

[50] In support of his submissions under this head, Mr McLean referred me to Shepherd v Elliot in which case due to a lack of candour in the pursuer's pleadings an award of expenses in the pursuer's favour was modified.

[51] In the instant case, I am not persuaded there was any such lack of candour in the pursuer's pleadings when looked at together with the productions lodged on her behalf and in particular, the expert reports upon which she was relying. In my view, the foregoing fully set out the nature and extent of the pursuer's claim, the evidential basis for it and the approach to the calculation of damages which was to be adopted, in particular regarding the major heads of damage, past loss of income and future loss of income.

[52] There was one matter upon which, perhaps it could be said, that there was not a full and candid approach and that related to the issue of the discount rate and as I have said, very little time at the proof was spent in relation to this issue and accordingly, I do not believe in the context of this submission, that it is of any particular relevance.

[53] I do not believe that the defenders were in any way prejudiced by the failure to produce a valuation. All the necessary information to make an independent valuation of the claim was before the defenders or could be obtained by the defenders through the use of commission and diligence.

[54] I do not believe that the proof was in any way lengthened due to the pursuer not having produced a detailed calculation regarding her valuation of the claim. In passing, I would observe that at no stage, even in submissions, was any valuation placed on the claim by the defenders. After the substantive proof, I was left, in so far as the defenders' position was concerned, in relation to what was the largest element in the pursuer's claim namely future loss of income with no proposed figure at all. This is a case in which the parties were miles apart on all issues and in particular regarding their valuations of the pursuer's claim. Each party had entrenched positions on every issue and they were not prepared to move a single inch. Against that background the production by the pursuer of a valuation of the claim was never going to result in any measure of agreement between the parties, far less any significant measure of agreement. I cannot see how the production of a valuation by the pursuer at any stage prior to or during the proof would have resulted in a shortening of the proof to any extent, far less a material extent.

[55] It was not suggested to me in the course of submissions on the expenses issue by Mr McLean that there was in fact any matter on which agreement could have been reached had he seen a valuation at some earlier stage.

[56] The next factor relied on by Mr McLean was the behaviour of the pursuer in the course of the proof and he argued that her behaviour had been such as to materially lengthen the proof. What in particular was relied upon was (a) the way she had answered questions and (b) that her evidence on certain matters had not been accepted.

[57] It is again correct that on certain matters I did not accept her evidence. However, there is nothing arising from that which I believe should lead to her not being awarded the expenses of the proof or to a substantial modification thereof. I would observe that on many disputed matters I accepted her evidence.

[58] I have commented at some length in my substantive opinion on the behaviour of the pursuer at the proof. In particular I dealt at some length with the pursuer's psychiatric and psychological problems and how that affected her behaviour during the course of the proof. Given, what I have said in the body of that opinion, I do not believe that her behaviour should in any way affect the award of expenses.

[59] The instant case was materially different from Bhatia v Tribax 1994 SLT 1201 upon which Mr McLean relied when making these submissions. In that case expenses were modified as a result of the nature of the evidence given by the first pursuer. However, the precise reason why the Lord Ordinary decided that modification was appropriate is noteworthy:

"their (the defenders) success followed the exposure of the unreliability of the first pursuer's evidence in regard to matters within her knowledge and documents within her control. (See: page 1207G)."

[60] The defenders in the instant case achieved no measure of success by showing unreliability of that sort on the part of the pursuer. There was no deliberate behaviour on her part which would justify me in departing from the normal rule.

[61] I am clearly of the view that the pursuer should be awarded her entire expenses in relation to this proof.

Other issues

[62] A number of further issues had been put out by order. In relation to these, unlike in relation to expenses, a substantial measure of agreement was reached and in particular the following matters were agreed:

1. That the method by which the damages currently assessed (that is in terms of my substantive opinion) should be ordered, should be by way of an interim payment of damages; reserving any further sums regarding the matter on which I was unable to calculate my award to a date following a conclusion of the dispute. (Conclusion of the dispute in relation to this matter being on the conclusion of evidence and submissions in relation to the third tranche of this proof).

2. Interest should be added to past solatium in the sum of £16,458.

3. The issue of an additional fee for the proof held before Lord Tyre should be remitted to him for determination.

4. Interest should be applied to past loss of wages in the sum of £53,940.

5. Interest should be deducted in respect of the interim payment and the sum to be deducted should be £10,200.

6. Interest accruing on past pension loss is £5,392 being 10% of the interest in the past loss of wages.

7. The figure of £1,742,500 contained in my original opinion includes the £312,500 for past loss of wages.

8. The following experts are certified:

(a) Dr Alan Carson;

(b) Dr Alison Harper;

(c) Mr William Patrick Soutter;

(d) Andrew Fisk;

(e) Adetola Oyegbite;

(f) Keith Carter;

(g) John Pollock;

(h) Stephen Hay;

(i) Dr Eric Megevande.

[63] One final issue was in dispute and that related to the question of an additional fee.

[64] The pursuer sought an additional fee in terms of paragraphs (a) to (g).

[65] It was not disputed that there should be an award made under heads (a), (b), (c) and(f), however there was a dispute regarding the other heads.

[66] The submissions on behalf of the pursuer in relation to the three disputed paragraphs were as follows:

[67] In relation to paragraph (d) the circumstance founded upon was that the pursuer had, on account of her illness, a requirement for intense guidance. In addition, it was submitted that the fact that a good many important witnesses were in diverse parts of the world was something that was unusual.

[68] In relation to paragraph (e) it was submitted that the cause was of vital importance to the pursuer. Mr Smith said this: Whatever else may be said, the pursuer did not choose to have a claim for damages. Her view, despite the judgment, which was supported by two expert witnesses was that she had exceptional ability and prospects of employment. She saw the action as a judgement on her ability and integrity. He submitted that in the circumstances that was a perfectly understandable position. For these reasons he submitted that an additional fee under this head was appropriate.

[69] As regards paragraph (g), he submitted that those acting for the pursuer, had entered into a joint minute in an effort to narrow the issues. Considerable evidence was spared by this matter.

[70] Further, he submitted that on more than one occasion it had been requested of the defenders that the two psychiatrists and two psychologists meet to prepare a joint report on the matter. Although nominally agreed to on the defenders' behalf, that meeting was delayed repeatedly. It was his position that a significant amount of evidence could have been saved had a joint report been prepared. Thus he submitted that this head was satisfied.

[71] In reply, Mr McLean's position was, as regards head (d), given that an award was being made under head (b) then to award under head (d) was double counting and should not therefore be made.

[72] As regards head (e) Mr McLean's argument was that every case was of course important to the pursuer. However, because the pursuer had, as he described it, become particularly fixated about her case, it did not follow that an additional fee should be granted under this head.

[73] As regards head (g), he described the joint minute which had been entered into as being nothing out of the ordinary or remarkable.

[74] With respect to the agreement of psychiatric and psychological evidence, this had not proved possible as the parties were in dispute in relation to these issues.

Discussion

[75] Having regard to the pursuer's submissions under heads (b) and (d) as set out in Mr Smith's written submissions and which were not expanded upon in the course of oral submission, there appeared to me to be an almost entire overlap between the submissions under these two heads. I accordingly preferred the argument of Mr McLean on this issue. I have not therefore granted an additional fee under head (d).

[76] As regards head (e) given that the injury to the pursuer had occurred at a vital time in her life, namely: when she was on the point of starting her working life and that on any view, her working life had been significantly disrupted by the injury which she had sustained, the case was clearly of vital importance to the pursuer within the meaning of the subhead. The level of disruption to her life is reflected in the level of award which I made as regards loss of income both past and future. On that basis alone, I would have made an award under this head. In so saying, I am leaving out of consideration that the case was of even more significance to this particular pursuer than mere reference to what had occurred to her working life covers. I believe I am also entitled to have regard to that when considering whether an additional fee under this head should be allowed. For these reasons I award an additional fee under this head.

[77] As regards head (g), I do not believe that an additional fee is warranted under this head. I would agree with Mr McLean that the joint minute which was eventually entered into was of a fairly standard nature and does not justify an award under this head.

[78] As regards the attempts to agree the psychiatric and psychological evidence, there were some minor efforts to achieve this, however, again this was nothing out of the ordinary and in the end of the day there was a material dispute between the experts for the pursuer and the defenders in relation to this matter and no agreement could be reached. It does not seem to me that it was appropriate on this basis to grant an additional fee under this head.