Relief from sanction refused and QOCS dis-applied
TO v GS Yuasa Battery Manufacturing UK Limited 
The Qualified One-Way Costs Shifting regime as set out in CPR Parts 44.13 to 44.17 ("QOCS"), which provides that Orders for costs made against a Claimant may not be enforced except in certain limited circumstances, has been in operation since 1 April 2013. Since that time, most of us have become familiar with the process by which QOCS can be dis-applied with the permission of the Court where the claim is found, on the balance of probabilities, to be fundamentally dishonest.
Fundamental dishonesty, however, is not the sole ground for dis-applying QOCS and Orders for costs made against a Claimant may, in certain cases, be enforced without the permission of the Court as follows:
To the extent that the costs do not exceed any Orders for damages and interest made in favour of the Claimant;
Where the proceedings have been struck out because:
– the Claimant has disclosed no reasonable grounds for bringing the proceedings;
– the proceedings are an abuse of the Court’s process; or
– the conduct of the Claimant (or a person acting on his behalf and with his knowledge of such conduct) is likely to obstruct the just disposal of the proceedings.
Dolmans recently had the opportunity to put the last provision (conduct of the Claimant, etc) to the test when it was instructed by Mitsui Sumitomo Insurance Co (Europe) Limited ("MSIEU") on behalf of the Defendant in the matter of TO v GS Yuasa Battery UK Limited. Yuasa has been involved in the manufacture of industrial lead-acid batteries at its Ebbw Vale, South Wales, site since 1982.
The Claimant was represented by a trade union firm and the personal injury claim commenced in the EL Portal by a Claim Notification Form ("CNF") dated 21 June 2017 which alleged that during the course of his employment as a factory worker on 17 November 2014, the Claimant injured his back whilst removing a retaining bracket from a stack of lead battery components. The claim had the benefit of QOCS.
Dolmans were instructed at an early stage by MSIEU following receipt of the CNF. Having interviewed Yuasa’s Plant Manager, HSE Manager and the Claimant’s Team Leader, and after examining the workplace and the documents, Dolmans were soon satisfied that there was evidence of a suitable safe system of work. Moreover, there was concern that the accident might not have happened as alleged. On the day in question, we were told that the Claimant had told his Team Leader that he had hurt his back "earlier in the shift", but he then refused all offers of first aid treatment and insisted on immediately leaving his workplace stating that he would seek treatment from a "friend who was a physiotherapist."
The claim was allowed to exit the Portal and was subsequently repudiated. A Claim Form limited to £15,000.00 was issued on 13 November 2017 and deemed served on 12 March 2018. A Defence, denying liability, was filed and served on 30 April 2018. The claim was allocated to the Fast Track on 6 August 2018 and listed for a 1 day Trial on 7 February 2019.
Because of the concerns over the accident circumstances, Dolmans were keen from the outset to examine the Claimant’s medical records to establish what he had told his doctor and physiotherapist. From the very start of Dolmans’ involvement, requests were repeatedly made to the Claimant’s Solicitors for copies of the records, but to no avail.
The Claimant obtained, and relied on, an expert medical report from a well-known orthopaedic surgeon, as well as an addendum report (following an MRI). Notwithstanding that he had not been provided with any other medical records, the Claimant’s expert formed an opinion that the Claimant had sustained a "resisted flexion injury to the lumbar sacral spine", had ongoing symptoms related to the accident and would suffer long term with mild discomfort in the lower back. The severity of the injury did not sit well with the mechanism of the accident. Part 35 questions to the Claimant’s expert did not persuade him to change his opinion.
Standard Disclosure took place on 3 September 2018, at which point the Claimant still did not disclose his medical records (save for radiology discs), and a request for specific disclosure of those records was made. Copies of the Claimant’s GP records were eventually received by Dolmans on 4 October 2018. The GP records indicated that the Claimant had attended on his GP with backache on 25 November 2014, that he was receiving private physiotherapy and had been referred for further physiotherapy. A request for specific disclosure of the physiotherapy records was promptly made. On 26 October 2018, the Defendant applied for an Order for specific disclosure of the Claimant’s physiotherapy records, which was listed for a hearing on Monday, 12 November 2018.
Shortly before the hearing of that Application, on Friday 9 November 2018, the Claimant’s Solicitors wrote stating that "Our client instructs that a friend of his referred him to a therapist who was a friend of the client’s friend. Our client instructs that he cannot recall the name of the male therapist. He instructs that therapist was working as a physiotherapist for a rugby team, to which he cannot recall, and does not now know his whereabouts dated over 3 years ago. Our client instructs that there was no record of the treatment being administered. The treatment was provided by way of a good and friendly gesture by his friend… Given the above, we can confirm that we do not hold or are in control of the information requested."
On the basis of the Claimant’s representation that no physiotherapy records existed, the Deputy District Judge dismissed the Defendant’s Application for specific disclosure of the same (with costs in the case).
The Defendant remained dissatisfied with the position set out in the email correspondence and, on 12 November 2018, served on the Claimant a CPR Part 18 Request for Further Information. By 21 December 2018, the Claimant’s Solicitors wrote enclosing "correspondence with regards to the therapist by way of continued disclosure." The enclosure was actually a document entitled "Claimant’s Reply to Defendant’s Part 18 Request for Further Information" and included a copy invoice dated 8 December 2018 in respect of 2 sessions of "Bowen Technique Therapy" provided on 21 and 24 November 2014 at a cost of £20.00 per treatment. Dolmans wrote to the Claimant’s Solicitors pointing out that the Claimant had not answered the CPR Part 18 Request and asking for a response by 4 January 2019. No response was received and an Application for an Order was issued.
On 22 January 2019, a District Judge ordered that "Unless the Claimant by 4pm on 29 January 2019 serves on the Defendant his Further Information… then his claim shall be struck out." The Claimant was represented at the hearing on 22 January 2019 by an employee of the Claimant’s Solicitors. Counsel attended for the Defendant.
No Further Information pursuant to the Defendant’s CPR Part 18 Request was received from the Claimant as ordered and the Claimant’s claim was deemed struck out.
Late on 29 January 2019, the Claimant’s Solicitors emailed a copy of their proposed Trial Bundle Index which included, at item 10, reference to "Claimant Replies." After being pressed the next day to identify this document, the Claimant’s Solicitors emailed a document "Claimant (sic) Reply To Defendant's Part 18 Request For Further Information", purportedly verified by a Statement of Truth and signed by the Claimant personally dated 8 December 2018. The Claimant’s signature on the Statement of Truth appeared to be an exact match for the signature on the Statement of Truth annexed to the document serving the Bowen Technique invoice.
The Claimant’s Solicitors telephoned Dolmans to explain that the Statement of Truth signed by the Claimant dated 8 December 2018 had been returned by him on or around that date, but that the he had failed to actually answer any of the requests for Further Information. Following the hearing, they had chased the Claimant for Responses, which had been provided by telephone on the morning of 30 January 2019, were typed up and the Statement of Truth, already signed by the Claimant and dated 8 December 2018, was attached.
The claimant’s application for relief
On 4 February 2019, the Claimant applied to reinstate his claim and/or for relief from sanction (this Application does not appear to have been filed/served until 5 February 2019 however). The Application was supported by a Witness Statement from the Claimant’s Solicitor (who had appeared at the previous hearing) which stated, by way of explanation for the breach, that "The default occurred as a result of an administrative error of the recording of the correct date for disclosure of the Request for Further Information. My self-note reflects that the Claimant do serve the Request for Further Information within 10 days from the date of the Order. This meant that I diarised service to take place on the 1st February 2019, which was an error on my part."
The Trial date on 7 February 2019 had been kept open by the Court and the parties appeared before a Deputy District Judge (albeit an experienced former full time District Judge). Counsel represented both parties, with Defendant Counsel also being the same as who had previously appeared before the District Judge (see above).
Counsel for the Defendant submitted that the District Judge had stated a number of times at the (previous) hearing that the time for service of the Further Information was 7 days. He also submitted that the document that had eventually been served was not verified by a valid Statement of Truth and was a “cut-and-pasted” composite document. The Deputy District Judge noted that the Claimant’s Solicitor’s attendance note had not been put forward to corroborate the reason given for failure to comply with the Order.
The Deputy District Judge noted that the Claimant’s Application for relief from sanction had not been formally listed for a hearing and had been served on the Defendant just 1 clear day before. He nevertheless agreed to deal with the Application and he proceeded to consider the (now familiar to all) three-stage test set out in Denton & Others v T H White Limited & Others .
It had already been conceded that the breach was a serious one. The Deputy District Judge considered that the reason given for failing to comply with the Order of the District Judge was a poor one unsupported by an attendance note. In all of the circumstances of the case, there had still not been compliance with the Order and the Deputy District Judge refused to exercise his discretion in favour of the Claimant and the claim remained struck out.
Defence Counsel sought a declaration that the conduct of the Claimant (or that of his Solicitors with his knowledge) had been likely to obstruct the just disposal of the proceedings and that QOCS should be dis-applied. Counsel for the Claimant submitted that the usual QOCS protection should apply.
The Deputy District Judge noted that the Claimant’s position before the Court on 12 November 2018 had been that there were no physiotherapy records to disclose and that treatment had been provided gratuitously by an unidentifiable physiotherapist, and that position had been maintained for some considerable time up to 21 December 2018 when it became clear that treatment had been paid for. It was the Claimant who was telling his Solicitor that there were no documents capable of being disclosed and which led the Court to dismiss the Defendant’s Application for specific disclosure.
The Deputy District Judge was satisfied that the Claimant probably knew that the physiotherapy had not been provided gratuitously. There was no reason why he did not provide Further Information when requested to do so. Accordingly, he would dis-apply QOCS.
The Defendant’s costs were summarily assessed on the fixed costs basis in the sum of £9,793.90 and have now been paid in full.
The factor that appears to have influenced the Deputy District Judge in disapplying QOCS was that the Claimant’s conduct had led to the dismissal of an Application that, had the Judge been appraised of the actual facts, was likely to have been allowed and this, ultimately, caused the Defendant to incur costs in prising the truth out of him.
This conduct, undoubtedly, fell short of the claim itself being fundamentally dishonest, but, interestingly and importantly, it did still permit the Court to disapply QOCS and, therefore, in addition to the claim being struck out (and, therefore, the Claimant being unsuccessful in his bid to recover damages from his employer), costs have also been recovered in consequence of the Claimant’s conduct.