Civil court: No rule against redaction

When I started doing civil litigation some years ago (the precise date eludes me), the rules and forms were the masters, not the servants. The formality and rigidity of pleadings and procedure had their advantages for those who knew the ropes and how to operate them effectively. Deciding cases on what would now be regarded as technicalities, rather than on the merits, was not unusual, and the ability to persuade the courts to do so was the mark of a top litigator. This could undoubtedly give rise to unfairness and, over time, rules, procedures and practices have changed, with legislation also modifying the traditional ways of litigating. Many of the reported cases I have selected here reflect those changes.

Documentary evidence

The sheriff court decision in Guidi v Promontoria (Chestnut) was discussed in my roundup at Journal, March 2022. It has now reappeared in the Inner House: [2023] CSIH 4 (24 January 2023). It is worth repeating the basics. The Promontoria group had purchased a large tranche of loans and securities from Clydesdale Bank by a bulk assignation and a sale and purchase agreement. The pursuer was a guarantor of companies who were in debt to the bank and was ultimately sequestrated by PCL, the appellants. He sought recall of his sequestration and, in this separate action, challenged PCL’s right and title to proceed against him. He argued that the assignation was invalid, and that PCL could not rely on redacted versions of the relevant documents.

Following debate, the sheriff produced a lengthy judgment including a comprehensive review of the rules and authorities about documentary productions and redacted documents. He held that the assignation was invalid, and that PCL could not rely on redacted documents without leave of the court. PCL appealed to the SAC, which remitted the case to the Inner House under s 112(2) of the Courts Reform (Scotland) Act 2014, being “satisfied that the appeal raises a complex or novel point of law”.

In a succinct opinion, the Inner House allowed the appeal and dismissed the action. It found “no merit” in the pursuer’s arguments about validity. As for redaction, it said: “There is no absolute duty on a party to lodge all the documents upon which it founds in the pleadings. In a commercial case, it is only under a duty to lodge such parts as are necessary to prove its case: Promontoria (Henrico) v Friel 2020 SLT 230. If the other party is dissatisfied, then it can seek to recover unredacted copies by means of commission and diligence. There must, however, be a basis to do so. Supposition is not enough. In the event of opposition, the court can determine the matter.”

Although this passage refers to commercial cases specifically, I see no reason to think that the position should be any different in ordinary actions, although the Inner House does qualify the position somewhat with the familiar “Each case will turn on its own circumstances”, which may allow enthusiastic and energetic litigants to keep plugging away at similar arguments that bit longer.

QOCS

The revolutionary principle of qualified one way cost shifting (“QOCS”) was introduced for personal injury actions by s 8 of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018, in operation since June 2021. The main intention was to increase access to justice for PI claimants by removing the risk of an adverse finding of expenses if their claim was unsuccessful. Needless to say, defenders were up in arms about this seismic change to the normal rule that expenses follow success.

QOCS would not apply if the claimant behaved inappropriately. The Act set out three situations in which that could arise: (1) if they were fraudulent; (2) if they behaved manifestly unreasonably; and (3) if their conduct of the proceedings was considered an abuse of process. PI litigators have been anxiously waiting to see how those provisions would be applied by the courts, and the first published decision is by Sheriff Fife in Lennox v Iceland Foods [2022] SC EDIN 42 (13 December 2022, ASSPIC). Defenders will have taken no comfort from it.

The 80 year old pursuer fell over baskets stacked on the floor of a store. She gave credible evidence about her accident and was supported by her daughter and some CCTV footage. Ultimately there was a lack of any evidence to support the key averments from which fault might have been demonstrated or inferred, and the sheriff had little difficulty in granting absolvitor. That judgment was not published, so far as I am aware. The defenders moved for expenses under OCR, rule 31A.2(1)(a) on the second and third grounds set out above. The sheriff had as little difficulty in rejecting those arguments as he appears to have had in rejecting the claim itself. His reasoning is confined to the circumstances of this case. He said little by way of general observation about the provisions, except that: “An allegation of abuse of process by solicitors is of a very serious nature, attacking the professional conduct and actions of the solicitors.”

I suggest it can now be taken that an honest pursuer, with anything better than an utterly hopeless case (with “no chance or substantially no chance of success”), represented by solicitors doing their best (maybe even their incompetent best) to follow the rules, will be protected. Putting it crudely, a genuine claimant and their lawyers can take a flyer on just about any claim without a risk of being found liable for expenses. Of course, that is what the Act intended, and I see little prospect of the courts watering this down in future.

Pleading medical negligence claims

In McGraw v GGHB [2022] CSOH 83 (23 November 2022), a medical negligence case, the defenders attempted to have the pursuer’s case dismissed on the grounds of relevancy and lack of specification. In essence it was argued that the wording of the pursuer’s pleadings did not follow the “formula” for pleading professional negligence to be derived from Hunter v Hanley. Such arguments were common decades ago, and enjoyed a degree of success then, but I thought we had all moved on from there and the decision confirms that we have indeed done so.

The precise form of pleadings is not so important if, on a charitable reading of the substance of the whole pleadings, there is an intelligible basis for the claim. The defenders carried out a thorough and detailed analysis of the precise words used in the pursuer’s pleadings, but Lord Clark saw little merit in this approach. “Deviating from the language used in Hunter v Hanley, whether in the pleadings or in the expert report, runs the serious risk of not corresponding with its meaning. In this case, however, the relevant test has been expressed in an alternative fashion.”

Abuse: the limits on limitation

The Limitation (Childhood Abuse) (Scotland) Act 2017 provides that there is no limitation period for claims based on childhood abuse except in two specific situations, one of which is where it can be established that the defenders could not get a fair hearing. In B and W v Congregation of the Sisters of Nazareth [2022] CSIH 52 (24 November 2022), the Lord Ordinary had dismissed two actions alleging abuse on the basis that a fair hearing would not be possible in the circumstances. If defenders thought that the decision gave them some cause for optimism in the future, this appeal will have stopped them sharply in their tracks.

Broadly speaking, there were historic generalised allegations of abuse against unidentified individuals, although the evidence (by affidavit) spoke to an overall culture of abuse within the organisation. The Inner House had little difficulty in overturning the earlier decision: “a fair hearing is not dependent on each party being able to investigate all that it would wish to pursue, nor on reassurance that all pertinent evidence remains extant and available to the court. In our view if appropriate regard is given to the systematic nature of the allegations and to the numerous sources of relevant evidence still available to the defender, it cannot be said that any hearing would be bound to be unfair. That is the high test presented by s 17D(2). If met it will usually be quite clear that the problems are insurmountable”.

In addition, the Inner House knocked another couple of ideas on the head in response to the defenders’ argument concerning prejudice. “The other factor mentioned as leading to substantial prejudice was the exposure to significant potential liabilities which would not otherwise have arisen and the cost of mounting a defence. This will be common to all childhood abuse cases which, but for the reforms, would have been dismissed as time barred; and often a large sum will be claimed by way of damages. No doubt all this is prejudicial for defenders, but in our view, it does not amount to substantial prejudice of a kind which would justify stopping proceedings. Were it otherwise, that exercise would be required in most cases, thereby undermining the policy and purposes of the reforms.”

Amendment

An interesting illustration of the way the courts now tend to approach the question of a late amendment can be seen in Asertis v Dunn [2022] CSOH 87 (2 December 2022), an action by company administrators against the recipient of alleged gratuitous alienations. The procedure followed classical lines, the commercial action being raised in February 2022 and, despite the best efforts of the court to bring matters to a head, the skeletal defences lodged at an early stage remaining unadjusted for about six months – including a period when the defender had parted company with her original agents. On 15 September the court fixed a debate for 15 November; on 11 November (a Friday and, I am guessing, sometime late in the afternoon) the defenders intimated a minute of amendment.

I can certainly remember the days when a court would refuse the receipt of such an amendment out of hand simply on the ground that it was too late, but in these more enlightened times they tend to look at the amendment to see if it says anything significant before deciding whether to allow it to be received. The pursuer opposed its receipt, insisted on the diet of debate and also moved for summary decree for good measure.

Lord Braid considered the proposed amendment at length but was unimpressed by its contents. “I do not doubt that given more time, the defender might be able to address some of [counsel for the pursuer’s] criticisms. However,... I do not consider that she is entitled to have more time, and in any event, the fundamental deficiency in her pleadings, even as they would be after amendment, remains that she has not relevantly averred that consideration was given. Accordingly I propose to refuse to allow the minute of amendment to be received.”

He continued: “That leads on to… whether the pursuer should be put to proof of the alienations… the defences contain an implied admission that all of the alienations were received. The pursuer has produced vouching that all of the alienations left one or other of [the company’s] bank accounts. The majority of the payments… plainly refer to the defender. For those which do not, the defender has had ample opportunity to state what her position is, but she does not.”

And finally: “It is therefore strictly unnecessary for me to consider the pursuer’s motion for summary decree. However, had it been necessary to do so I would have granted it. In support of that motion, the pursuer has produced an affidavit from Kenneth Craig, one of the joint administrators, along with supporting documentation.”

Game set and match, I think!

Foreign law

I referred to Benkert UK Ltd v Paint Dispensing Ltd at Journal, May 2022, 28 at 29. At first instance, the pursuers were unsuccessful with their claim for damages of £29.6 million because, although the Lord Ordinary found that the defenders had been in breach of contract, there was a contractual limitation of liability which restricted any claim to the princely sum of £3,225.06. Not surprisingly, there was an appeal but, to add insult to the pursuer’s injury, the Inner House decided that there had not even been a breach of contract: [2022] CSIH 55 (9 December 2022). Put simply, it said that the defenders contracted to maintain the machine which caused the fire, and that obligation did not extend to improving or redesigning the machine so as to make it safer.

Part of the judgment concerned the interpretation and application of English law. The contract provided that English law should apply. The relevant sections of the Unfair Contract Terms Act are different in England and Scotland. The Lord Ordinary had applied English law, but the Inner House said that he should not have done so. “Foreign law… is a question of fact, and judicial notice cannot be taken of it in the absence of proof… Proof can take the form of an unqualified admission in the pleadings, but if that is the approach taken, the content of the foreign law must be relevantly set out by means of distinct and pointed averments… There were no such averments in the present case… in the absence of proof or averments as to the content of the foreign law, the presumption that foreign law coincides with Scots law has not been displaced.”

The niceties of taxation

In Aberdeen Computer Services v SLCC [2023] CSIH 5 (24 January 2023), the party appellant took a note of objections to the taxation of their account, which had been reduced from £47,000 to just over £5,500. The circumstances are fairly unusual, but I mention it for the observations regarding the fee fund dues charged by the auditor:

“In ordinary circumstances the fee charged is payable by the paying party but this is subject to revision if any of the account as submitted is taxed off or disallowed. The allocation of the fee fund dues as between the parties to taxation was explained by Lord Glennie in the case of Honer v Wilson 2007 SLT 54… as follows: ‘It may be of interest to those who are unfamiliar with the niceties of taxation to note that although the fee fund dues are meant to be calculated on the amount claimed, the paying party is only required to pay that part of the fee fund dues which is attributable to the expenses as taxed and found due.’”

Joint minutes

Joint minutes are now much more prevalent than they ever were. This is undoubtedly a good thing, but their wording should always be treated with great care. In Ward v ADR Network [2022] SAC (Civ) 35 (15 December 2022), a PI case in which the pursuer claimed damages from two defenders and negotiated a settlement with one of them, a joint minute was lodged. Reference should be made to the judgment for the full background; I commented on the case at Journal, January 2022, 34 at 35 (Ward v Wm Morrison). The relevant parts of the joint minute read:

“[X] for the pursuer and [Y] for the first defender have concurred and do hereby concur in stating to the court that the action as directed against the first defender has settled extrajudicially and they therefore craved and do hereby crave the court to: (1) Find the first defender liable to the pursuer in the expenses of process as taxed”.

The sheriff’s reading of the joint minute was reviewed on appeal. The SAC said: “The sheriff’s conclusion that the paragraph within the joint minute… that dealt with expenses was ‘a clear agreement to pay the whole expenses of the action, as taxed, not simply the expenses quoad the first defender’ is one we cannot support. On any view (quite understandably) that paragraph did not address the expenses of the respondent. The whole expenses of the action were not, as a matter of fact, provided for.”

I have to agree with that conclusion, and it does illustrate how the terms of a seemingly straightforward joint minute can be open to misinterpretation.