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Dispute Resolution

Company Director facing trial for deaths of Fisherman’s Friend band members
Thursday 20th October 2016

A Company Director who has been accused of causing the deaths of a band’s singer and promoter has been said to have a “casual approach to safety”.

David Naylor, a director of Express Hi-Fold Doors Ltd is currently on trial at Guildford Crown Court for two charges of manslaughter by gross negligence. Trevor Grills and Paul McMullen died after a steel door collapsed at the ‘G Live’ venue in Guildford in February 2013.

The band, Fisherman’s Friend were at the venue to set up for a performance later that evening. Mr Grills and Mr McMullen were unloading music equipment from their van when the van door, which was designed by Express Hi-Fold Doors Ltd fell on them. The door measured 12m wide by 6.6m high and weighed in excess of two tonnes.

Guildford Crown Court has heard how Mr Naylor was aware that there was a serious danger of such a door falling because a number of the same doors had collapsed in the past, although no-one had suffered injury.

Zoe Johnson QC, who appears for the prosecution told the court that the prosecution alleges “that the failure to have an anti-drop safeguard coupled with other evidence of earlier door collapses and this defendant’s rather casual approach to safety means that his conduct is so bad as to amount to the offence of gross negligence manslaughter”.

The leading authority in respect of gross negligence manslaughter is the case of R v Adomako (1994) 3 All ER 79 in which a four stage test was developed by the House of Lords. In order to be convicted of gross negligence manslaughter, the jury must be satisfied, beyond reasonable doubt:-

a)     there was an existence of a duty of care owed to the deceased from the accused;

b)    a breach of that duty of care has occurred,

c)     the breach causes (or significantly contributed to) the death of the victim and;

d)    the breach is characterised as grossly negligent.

The company, Express Hi-Fold Doors Ltd also faces a third charge of a breach of health and safety duties imposed upon them by section 6 Health and Safety at Work etc Act, concerning general duties of manufacturers as regards articles and substances for use at work.

The trial continues.  


High Court endorses strict time limits for GMC appeals
Wednesday 19th October 2016

Section 40(4) of the Medical Act 1983 (“the Act”) relates to appeal to made regarding decisions of the Medical Practitioners Tribunal. The Act provides that an appeal must be made within 28 days, beginning with the date on which notification of the Tribunal’s decision as served. The Act does not provide any discretion for this period to be extended.

On 25 May 21016, the Tribunal, by way of letter, informed Dr El-Huseini that his fitness to practise was impaired by reason of misconduct and his adverse physical and mental health.  Dr El-Huseini received a 12 month suspension.

The letter sent to Dr El-Huseini stated that it was deeded served on 27 May 2016 and therefore, the last day of 28-day period to appeal was 23 June 2016.

On 22 June 2015, Dr El-Huseini sent to the Court, an Appellant’s notice, together with a completed application for a fee exemption. (It is a requirement of the Civil Procedure Rules that an appellant’s notice is accompanied by the appropriate fee, or if appropriate, a fee remission).

The Appellant’s notice and the fee exemption were duly delivered on 23 June 2016 (the last day of the 28 day period). However, on the same day, the fee remission application was rejected and he was asked to pay the applicable fee of £240.00. On 27 June 2016, Dr El-Huseini sent a cheque for £240 to the Court. This arrived the next day. His appellant’s notice was sealed and dated 28 June 2016.

The Court had three issues to look at when deciding if Dr El-Huseini’s appeal could be considered.

Firstly, what was the effective date of appeal? Dr El-Huseini’s application for fee remission had been rejected because the evidence he submitted showing is entitlement to ESA was over three months old. The Judge held that Dr El-Huseini should have provided sufficient information to demonstrate his entitlement to the remission within the appeal period. The appeal was therefore brought out of time.

The second issue to be determined was whether there was a requirement to vary the time limit to ensure compliance with the European Convention of Human Rights. The Supreme Court case of Pomiechowski v District Court of Legnica, Poland [2012] was considered in this regard, which reiterated that the “court must have power to permit and hear an out of time appeal which a litigant personally has done all he can to bring…timeously.”

In Dr El-Huseini’s case, the Judge considered his submissions, which concerned health difficulties, difficulties in obtain the relevant transcripts from the Tribunal and difficulties in obtaining legal advice. However, it was concluded that none of these were the cause of the late appeal. This was the failure to obtain and send the correct evidence of entitlement to ESA. Therefore, Dr El-Huseini had not done everything he could to bring the appeal in time, as per Pomiechowski.

Finally, determination was also necessary to the requirement to extend time to make a reasonable adjustment for disability as required in some circumstances by the Equality Act 2010. This issue was also dismissed. The time limit in place is not a provision or practice such that there can be a duty to make reasonable adjustment. The general obligations of the Equality Act cannot impose an obligation upon the court to do something beyond their powers or create a power they would not otherwise have.

On the facts of this case, an extension of time was not held to be justified.

Registrants should bear in mind that the time limits imposed for appealing regulatory decision are stringent and any discretion to extend is likely to be exercised rarely. 


Keep our Dispute Resolution services “the best in the world”, says Lord Chief Justice
Tuesday 18th October 2016

Lord Thomas of Cwmgiedd, the Lord Chief Justice of England and Wales, has spoken of the need to look at keeping the countries’ dispute resolution services the best in the world.

In his speech, given at the launch of TheCityUK’s Legal Services Report 2016, the Lord Chief Justice highlighted the importance of keeping English law up to date and also of “keeping our system the best in the world”.

One of the options of dispute resolution is arbitration, where an arbitrator or panel of arbitrators is appointed by the parties to make a binding decision.  The Lord Chief Justice spoke about exploring how the process could be changed to report decisions that are made at arbitration, in the public domain.  Available arbitrators include retired judges and Lord Thomas of Cwmgiedd is keen to see a greater use made of their awards so as to develop the law more widely.

Another popular form of dispute resolution is mediation, in which a neutral third party assists the parties to seek to agree a negotiated settlement of their dispute.  Last week was Mediation Awareness Week and Lord Justice Briggs used the opportunity to encourage the use of mediation in mid-value claims.  Mediation is a key component in reforms of the civil justice system and LJ Briggs recommended an expanded role for alternative dispute resolution in his recent Civil Courts Structure Review.  It seems likely that the use of mediation and ADR generally will only increase.

The Dispute Resolution team at Brabners are experienced in successfully employing all forms of dispute resolution, whether through the courts or through the different options of alternative dispute resolution (ADR), whatever the form of your dispute.


Ejector seat firm to be prosecuted over death of Red Arrows pilot
Friday 14th October 2016

The Health and Safety Executive (HSE) have decided to prosecute Martin Baker Aircraft Company Ltd over the death of a Red Arrows Pilot, Sean Cunningham.

Flt Lt Sean Cunningham was injured after being ejected from a Hawk T1 jet, whilst it was still on the ground, at RAF Scampton, Lincolnshire in 2011. He was propelled 220ft in the air whilst he carried out pre-flight checks as it was found that the ejection seat firing handle had been left in an unsafe position.  Flt Lt Cunningham later passed away in hospital as a result of his injuries.

The Senior Coroner for Central Lincolnshire considered that the company had failed to pass on a ‘risk to life warning’. Testing of the Mk. 10 Martin Baker seat showed that the safety pin could be inserted even when the seat was in the unsafe position, giving the impression the seat was safe. Upon review of the case, the CPS decided that no manslaughter charges would be brought against three individuals, in relation to their involvement in either the ‘manufacturing or the servicing’ of the ejection seat. Corporate Manslaughter charges were considered against the company and the MoD.

However, the HSE will now bring a prosecution against Martin Baker Aircraft Ltd for an alleged breach of Section 3(1) of the Health and Safety at Work etc Act 1974, which states:

“It shall be the duty of every employer to conduct his undertaking in such a way as to ensure, so far as is reasonably practicable, that persons not in his employment who may be affected thereby are not thereby exposed to risks to their health or safety”.

The case will be next heard at Lincoln Magistrates’ Court, on a date to be confirmed. 


Claims for maintenance after parent’s death clarified
Tuesday 4th October 2016

Sitting in the City of London County Court Judge David Halpern QC has further clarified the law as it applies to anyone seeking an order for maintenance from a deceased’s estate.

Michael Ames ran a very profitable London-based glazing company and, on his death, left an estate valued at over one million pounds. 

Mr Ames’ will did not make any provision for his daughter, Danielle, who is 41 with 2 dependent children. 

Danielle Ames brought a claim against her father’s estate for a provision for her maintenance pursuant to the Inheritance Act (Provision for Family and Dependants) Act 1975.

Ms Ames’ evidence to the Court was that her father had told her ‘it will all be yours one day’ and that her father was her best friend.  For this reason she was shocked when her father’s will left nothing to her.  Mrs Ames’ further evidence to the Court was that her outgoings exceeded her income by £2,000 per month and that she required provision from her father’s estate as a reasonable provision.

In contrast with Mrs Ames’ evidence Mr Ames’ partner, Elaine, gave evidence to the Court that Mr Ames believed that adult children should ‘look after themselves’                                                

In rejecting the claim Judge David Halpern QC concluded that ‘Danielle is capable of working and has failed to discharge the burden of proving that she is unable to obtain work. I conclude that her lack of employment is a lifestyle choice. That alone is sufficient to defeat her claim’.

The needs of Michael Ames’ partner, Elaine, to lead a comfortable life in retirement given her ill health were also a significant factor balanced with the claimed needs of Mrs Ames. 

This judgment reflects that there is no automatic right to countermand the terms of a will by reason of family ties where a child has comparatively modest means compared to the value of an estate.  The Court will make an award for maintenance only where there has been maintenance prior to death and, in making any award, taking into account the needs of beneficiaries or other qualifying claimants and the level of the maintenance that existed prior to death.  


Notification injunctions and freezing orders
Friday 16th September 2016

Across Brabners’ commercial litigation team we have considerable experience of obtaining and responding to worldwide freezing injunctions.  These types of orders operate as the name suggests and freeze the entirety of someone’s assets without permission of the Court or the permission of the person who obtains the order.  They are the ‘nuclear’ option when there is a risk of assets being disposed of before a claim can be brought to trial and a judgment enforced.

For a claimant freezing orders can be a vital tool to ensure a judgment is not a Pyrrhic victory.  For a defendant the making of a freezing order can cause significant upheaval as they must deal with the claims against them while also dealing with their banks to ensure they can have access to funds permitted by a freezing order to pay their living expenses and legal costs.

The severity of the consequences of a worldwide freezing order means that the Courts impose a high evidential burden before one will be granted.

In the recent case of Holyoake v Candy [2016] EWHC 970 (ch) the Courts have introduced a remedy that represents a ‘half way’ measure in the form of Notification Injunctions.  These orders require a Defendant to notify a Claimant if they intend to dispose of an asset over a prescribed value.  The courts have described these types of orders as “less invasive interference with the defendant’s rights”.

The test to be satisfied to obtain a Notification Injunction is whether on the balance of convenience there is (i) a good arguable case and (ii) either a substantive right to prevent a Defendant from disposing of an asset or a risk that the Defendant would dispose of an asset which can be inferred from the facts.

For a Claimant with strong evidence of wrongdoing where there is real risk of dissipation of assets by a Defendant the Worldwide Freezing Injunction will remain the preferred option. Where there evidence is less compelling the lower threshold for a Notification Injunction may be attractive to give the Claimant comfort that a Defendant is not going to be able to dispose of any significant assets such as properties, shares and investments or valuable vehicle such as the luxury yacht in the Holyoake v Candy case.


Trends from the Latest Civil Claim Statistics
Thursday 15th September 2016

The latest statistics bulletin published by the Ministry of Justice in the Civil Justice Statistics Quarterly show an increase in the number of specified money claims issued at Court, and also the average time for a claim to reach trial.

The statistics are for the time period April to June 2016 and show that during this period 397,504 new claims were issued at Court, which is an 8% increase on the same time period last year.  2006 to 2012 saw a general downward trend in the number of new claims but this appears to have since reversed.

The number of specified money claims in this period was 12% higher compared with the same time period last year.  The number of applications for judicial review has increased slightly compared with last year, but the number of insolvency petitions dealt with by the Court has decreased by 62%.  The Ministry of Justice says that the reason for the latter is the launch of an online system for debtor insolvency petitions.

Of the claims allocated to a case management track within this time period, 46% were allocated to the small claims track, 45% to the fast track and 9% to the multi track.

The most common method of enforcing a money judgment remains obtaining a warrant of execution against the debtor’s goods.  This enables a bailiff to recover and sell goods where payment is not made.

A lot of litigants ask when their case is likely to reach trial.  The statistics for this time-period reveal that the average time for a small claim to reach trial is 31.7 weeks after being issued, and the average time for claims allocated to the fast track and multi track to reach trial is 54.3 weeks after issue.


Illegal Contracts
Wednesday 14th September 2016

The Supreme Court has recently clarified the law relating to civil claims involving illegality.

The long standing rule is that the Courts will not permit an illegal contract or any rights arising from illegal contracts to be enforced.  For example, an agreement to pay for someone to be assaulted or murdered could not be enforced through the Courts if payment of the agreed price was not paid after the service had been provided.  The public policy reasons for this are obvious.

In the case of Patel V Mirza the illegal act was less sensational and the claim did not concern payment for a service being provided

£62,000 was paid over by Patel to Mirza for the purpose of buying shares in a bank - it was known that this would be beneficial as Mirza had inside knowledge and he was expecting an announcement about the bank.  Mirza did not buy the shares and Patel then issued a claim through the Courts for return of the £62,000.

In the judgments handed down the Supreme Court listed factors to be taken into account when deciding whether to refuse the claim by reasons of illegality.  The factors include:

  1. The seriousness of the illegality; and
  2. How central the illegality is to the contract; and
  3. Whether the illegality was intentional; and
  4. Whether there was a disparity between the culpability of the parties to the contract for the illegal act.

It is likely that in the future cases of this type will be heavily dependent on the surrounding facts.

In the lead judgment Lord Toulson confirmed:

“A claimant, such as Mr Patel, who satisfies the ordinary requirements of a claim for unjust enrichment, should not be debarred from enforcing his claim by reason only of the fact that the money which he seeks to recover was paid for an unlawful purpose. There may be rare cases where for some particular reason the enforcement of such a claim might be regarded as undermining the integrity of the justice system, but there are no such circumstances in this case.”

Fundamentally, reimbursement of funds provided for an illegal purpose when the funds has not been used for that purpose was permitted by the Court on the facts of this case.


Warranty/Misrepresentation Claims and Company Sales
Tuesday 6th September 2016

The High Court has recently dealt with the difference between warranties and representations in disputes arising from the sale of company shares.

On 12th November 2009 Idemitsu Kosan Co Limited (Idemitsu) entered into a share purchase agreement with Sumitomo Corporation to acquire the shares in an energy sector company then called Petro Summit Investment UK Limited.  The purchase price was around US$575 million.  As is usual, the share purchase agreement (SPA) contained various warranties given by the sellers to the purchaser.

Following completion the purchaser Idemitsu later discovered that the acquired company had substantial liabilities arising from a dispute between the owners of offshore oil and gas fields in which it had an interest.  Idemitsu alleged that certain warranties given by the sellers were not true.  However, Idemitsu could not pursue a warranty claim against the sellers because under the terms of the SPA such a claim had to be notified to the sellers within 18 months of completion, and that date had passed.

Idemitsu instead brought a claim against the sellers for misrepresentation.  Misrepresentation is where one party makes an untrue statement of fact or law to another party who relies on the statement in entering into a contract and suffers loss as a result.  Where the breach of warranty claim could not be pursued because of the contractual limitation on timing, a misrepresentation claim has a limitation period of 6 years and therefore Idemitsu were in time.

The SPA had an English governing law and jurisdiction clause so Idemitsu commenced proceedings in the Commercial Court seeking damages.

However the issue faced by the Claimant was that for its claim to succeed it had to prove that the statements made in the warranties in the SPA also amounted to representations.  Sumitomo denied the claim and made an Application against Idemitsu seeking summary judgment dismissing the claim under Part 24 of the Civil Procedure Rules.

On hearing the Application, the Court decided that the warranties in the SPA were clearly identified as warranties.  They were described as “Warranties” and not, as is sometimes the case in SPAs, as “warranties and representations”.  The Court looked at whether they are statements in themselves (i.e. representations) or whether they are promises that the statements are true (i.e. warranties).  To fall into the former category it is not enough that the subject of the promise is capable of being a representation.  The Court found that there was no evidence that the parties intended the content of the warranties to also be representations.  In addition, the SPA contained an ‘entire agreement’ clause as well as a clause excluding reliance on any pre-contract communications or representations.

For all of these reasons the Court decided that the claim had no real prospect of success.  As there was no other reason why it should be disposed of at trial, the Court granted summary judgment for the Defendant Sumitomo and dismissed the claim.

The claim highlights the need for careful drafting of share purchase agreements, and the need for Claimants to be aware of applicable time limits to pursue a claim.  Most SPAs contain dispute resolution clauses and these often include tight time-scales to give notice of an intended claim.  Purchasers need to keep these limitations in mind and ensure that they comply with them in order to protect their position.

The dispute resolution team at Brabners has extensive experience of dealing with warranty and misrepresentation claims, whether in relation to company purchases or in contracts for the sale of goods and services.

Idemitsu Kosan Co, Ltd v Sumitomo Corporation [2016] EWHC 1909 (Comm)


What if you only beat an offer on Appeal? Pawar v JSD Haulage [2016] EWCA Civ 551
Wednesday 31st August 2016

Mr Pawar was successful at the trial of his personal injury claim against JSD Haulage but he failed to beat 2 offers to pay damages that JSD Haulage had made during the proceedings.  As a result Mr Pawar was responsible to pay JSD Haulage’s legal costs from expiry of the relevant period on the first offer made.

Mr Pawar appealed the level of damages awarded to him and succeeded in his appeal.  This revised award of damages was higher than JSD Haulage’s first and lowest offer during the proceedings but still did not reach the level of their second higher offer.

Mr Pawar remained liable to pay JSD Haulage’s costs of the initial proceedings from the time of expiry of the relevant period on the second higher offer.  The interesting question is who was then responsible for the costs of the appeal proceedings.

JSD Haulage sought to argue that they should not pay Mr Pawar’s costs of appealing the level of damages awarded to him because he had still not bettered their second offer.  The Court of Appeal rejected this argument on the basis that Mr Pawar had to bring his appeal to improve his damages award and to reduce his liability for JSD Haulage’s costs of the initial proceedings.

It should always be borne in mind that offers made in proceedings cease to be relevant to any appeal proceedings.  To obtain protection against liability for the costs of appeal proceedings the appeal should be considered on its own merits and offers made accordingly.

Read our first update in this 3 part series of blogs where we discuss - "High Court clarifies Costs protection from offers – Quit while you are ahead"

Read our second update in this 3 part series of blogs where we discuss - "Court warning on proportionate legal costs"