27
Jul
20
Articles, Travel & Cross Border Claims
The Weekly Roundup: an update on Brexit and the Great Refund Saga; and a Cautionary Tale of Preparation and Pleadings

With the summer holidays upon us, the team has been busy this week, dusting off the 1CL luggage and trying to remember where we put the 1CL parasols and windbreaks. But we’ve found time to revisit those old favourites, Brexit and the Great Refund Saga, as well as anxiously double-checking our pleadings in the light of the decision in Palaiokrassas. Happily, nobody could accuse us of optimistically thinking that something might turn up, in the words of Master Thornett, although we certainly hope it does in the context of the Brexit negotiations.

 

A cautionary tale of preparation and pleadings: (1) Palaiokrassas, (2) Tsakou v Black & Green Trading Ltd (t/a Journeys By Design) [2020] 4 WLUK 476

In what circumstances should a Court set aside a default judgment?  That was the question facing Master Thornett recently in (1) Palaiokrassas, (2) Tsakou v Black & Green Trading Ltd (t/a Journeys By Design) [2020] 4 WLUK 476.  In very brief terms the claim arises out of an accident that happened when a plane crashed whilst landing in Ethiopia.  While the Claimant relied upon breaches of Ethiopian Law (that law being said to represent the applicable local standard) it was also recognised by the Court (and pleaded in the Particulars) that aviation safety is governed by a set of international rules to which Ethiopia is a signatory.

The default judgment arose when the Defendant failed to serve a Defence due to an “administrative diary error”.  While the coronavirus pandemic was partly to blame for this error the Court felt that there had been “a serious breach for which there is no reasonable explanation.”

The examination therefore centred around CPR r 13.3(1)(a), i.e. whether the Defendant could show a real prospect of successfully defending the claim.  The test of “reasonable prospect of success” is essentially the same as applied in an application for summary judgment, and as Master Thornett noted at [3]:

a “realistic” claim is one that carries some degree of conviction. This means a claim that is more than merely arguable. However, in reaching its conclusion the court must not conduct a mini-trial and should take into account the evidence that can reasonably be expected to be available at trial. Thus, it must question whether reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to refuse the application because, in those circumstances, there would be a real, as opposed to a fanciful, prospect of success.

However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up.

Unfortunately for the Defendant the Court came to the conclusion that “this is by far more a case where the Defendant’s position is to seek permission to further investigate potentially relevant issues than clearly identify them as part of its Application. Indeed, the Defendant goes even further and seeks to argue that those issues cannot easily or clearly be enunciated because they first need the benefit of expert analysis and opinion.” [4]

As to the need for expert evidence, the Court noted in passing the decision of Tomlinson LJ in Lougheed v On the Beach Ltd [2014] EWCA Civ 1538 to the effect that whilst expert evidence was common in such cases, it did not follow that evidence about local standards could not be given by “an appropriately experienced and qualified individual who nonetheless did not put himself forward as professing expertise in the field”.

Leaving the question of expert evidence to one side though, the Defendant had had over a year to investigate the claim and at no point in the pre-litigation correspondence did the Defendant ever intimate that they were going to defend liability, rather the discussions had focused on questions of quantum.  In light of the history the Court found that the Defendant’s position was in reality an argument that “the case should be allowed to go to trial because something might turn up”.

Further the Master was critical of the proposed draft Defence that was “essentially a document of non-admission” and that “to the extent that denials appear, they are unsupported by any … counter-factual case or argument of law as qualifies them as denials within the meaning of the CPR[1]”.

Earlier in the judgment the Master had noted that “[i]t fell to the Defendant to satisfy me what counter factual case or contrary “local standard(s)” or “laws and regulations” might apply and why; regardless of whether these come to be recognised as justifying expert opinion or not. Whilst such satisfaction clearly need not be to an evidential level of detail and depth expected at trial, it is not unreasonable to expect a defendant at least to identify in principle the respective proposed areas of contention. Only from that can the court assess reasonable prospects of success”.  As the Defendant had failed to set out such a positive case the application to set aside the default judgment also failed.

I wrote a short article published on 7th May 2020 (link: https://1chancerylane.com/hrh-the-duchess-of-sussex-v-associated-newspapers-limited-2020-ewhc-1058-ch/) about the decision in HRH The Duchess of Sussex v Associated Newspapers Limited [2020] EWHC 1058 (Ch) where the Duchess had a large part of her case against the Defendant struck out in essence on the basis that elements of her case had been improperly pleaded. Palaiokrassas, although a very different case factually and legally, is a further illustration of the point I sought to make in my earlier article.   A party’s pleading is the central document in a case.  It sets out what needs to be proven for a Claimant to succeed or lays out the Defendant’s counter-factual or legal position.  From the pleadings the witness statements flow; providing the factual evidence to support a party’s pleaded case.  It is too often the case that pleadings make overly general assertions in the hope that the detailed position will become apparent later allowing a case to be properly set out in the witness evidence.

Palaiokrassas should serve as a useful reminder that this is not the correct order of things.  Closely related to that point in a reminder of the importance of the pre-action protocols and pre-action correspondence.  The purpose of the protocols is to allow the parties to investigate a claim at an early stage so as to either avoid the need for litigation or to narrow the issues.  The Courts increasingly frown upon litigants who do not properly use the time afforded to them in the pre-action stage to explore their case, or at the very least, work out broadly what their case is! If more had been done in the pre-action stage in Palaiokrassas then it may have been possible for the Defendant to have settled a properly founded defence as opposed to a pleading that consisted of “non-admissions” and consequently demonstrated “a reasonable prospect of success” allowing for the default judgment to be set aside.

About the Author

Ian Clarke was called in 2005. He specialises in professional negligence claims, but also undertakes cross border claims, with a particular emphasis on serious injuries arising out of sporting accidents. The Legal 500 rates him as being ‘very adept at picking up the detail of document-heavy matters very quickly’ and an ‘accessible and level-headed junior’.

 

A Swiss Platter or a Ukrainian Stew? Governance arrangements for the UK-EU Treaty

Another round of Brexit negotiations last week, and you would be forgiven for thinking another round of a whole lot of not much. But despite the suspense-thriller cinematographic invisible hand guiding the parties towards the longest possible impassive stand-off, there was a small piece of interesting movement on the UK side this week. It related to the structure and governance of the future arrangement.

The UK had been keen to break up the future UK-EU relationship into bitesize agreements each with their own governance and dispute resolution mechanisms. One treaty on fisheries, one treaty on security co-operation, one deal on mobility (the de-escalated term for free movement), one on data, on aviation, freight, and so on and so on. The advantage of such a system to the UK (presumably envisaging being naughty) is that if there’s a breach of a provision related to, say, fish (it’s always ultimately about fish), then the aggrieved party would only be able to take reciprocal action within the parameters of that particular treaty. In practical terms, if UK fishermen exceeded agreed quotas in EU waters, the EU could only respond by (fish)slapping a tariff on UK seafood, rather than, say, blocking UK access to databases.

In this respect, the UK spoke of the ‘Swiss model’ with the EU-Switzerland arrangement being the paragon Berner Platte approach to international relationships, made up of at least ten bilateral treatissons. The only problem is that the EU, broadly speaking, is not a fan of the tangle it has ended up in with its circumvallated neighbour. It’s messy, and you’d never design something like that on purpose – they say. For the EU, the paradigm is the Ukrainian model, which is an ‘Association Agreement’: essentially a collection of co-operation agreements across a wide range of social and economic sectors, all tied together under a single super-arching gigantotreaty. Importantly there is a cross-cutting governance and enforcement framework (as an aside – with a fair bit of dreaded CJEU involvement), which underpins all areas of the relationship. In EU slide-packs it’s often drawn as a ‘Greek Temple’ – i.e. individual vertical columns both supporting and supported by large horizontal slabs.

So last week it was perhaps somewhat surprising to see David Frost release a statement saying that the UK had “heard the EU’s concerns about a complex Switzerland-style set of agreements” and was prepared to consider a “simpler approach”. This seemingly without achieving reciprocal concessions from Barnier on other sticking points – level playing field and, as ever, fish.

As is the inevitable nature of horizontalizing compromises, the consequences are net positive for some sectors and net negative for others. The good news for those in the UK working in potentially underprioritised sectors is that they’re more likely to end up with the same gold-plated governance and dispute settlement arrangements as the most popular(-ist?) ones, with significantly less risk of being hived off and sacrificed; the bad news for the piscine class is the lack of protective ringfencing from their collapsey co-columns.

Time will reveal exactly how the governance arrangements will be drawn – as trailed, there remain significant concerns about the exact role played by the CJEU. But what seems now to be clear is that it’s “au revoir/auf weidersehen/a rivederci” to Boris’s ambition of Britzerland.

About the Author

Tom Yarrow was called in 2018. Before joining chambers Tom was a civil servant working in various government departments, including as a policy advisor on the UK-EU Withdrawal Agreement at the Department for Exiting the European Union. During pupillage he worked with the Government Legal Department, practising in public law in the fields of public international law, justice and security, human rights and immigration. He has regularly appeared in judicial review proceedings for the Secretary of State for the Home Department, and as a member of the Attorney General’s ‘junior junior’ scheme, he is able to take instructions directly from government clients. He now practises in all of chambers’ practice areas and is an enthusiastic and valued member of the travel team.

 

 

The Great Refund Saga, still going…

There must have been a time before The Great Refund Saga, but it’s difficult to remember it. Last week was a mixed bag for airlines, with Which? urging the CAA to come down hard on them, and the Department for Transport finally providing some support for credit notes. This week the European Consumer Organisation, an umbrella group representing consumer watchdogs across Europe (including Which?), has called for an investigation into what it terms ‘unfair practices’ on the part of airlines dealing with refunds. They have singled out Aegean, Air France, EasyJet, KLM, Norwegian, Ryanair, TAP Portugal and Transavia for particular criticism, although to be fair this may be because they sell more flights than others.

According to BEUC,

“The top three most-complained about practices according to our members are:

1) forcing consumers to accept vouchers instead of monetary refunds for cancelled flights;

2) failing to provide information to consumers on their rights to a refund;

3) providing misleading information to consumers on their rights.”

If this is widespread, and it appears that it may well be, airlines are just storing up trouble for themselves. Although in the current situation it is understandable that airlines are struggling to provide refunds for reasons of liquidity, failing to provide information, and providing misleading information, will not be viewed indulgently by the CAA or European Commission.

There is a further danger lurking on the horizon. The airlines are rightly fearful that claims management companies are transferring their attentions from the payment protection insurance mis-selling scandal, and beginning to target passengers awaiting refunds. If they issue largescale group actions, the airlines may end up paying not only the refunds due, but a substantial costs bill as well. Failing to provide accurate information to passengers only encourages the claims management firms; and if passengers have to resort to issuing court proceedings in order to enforce their legal rights, judges may take the view that the airlines have only themselves to blame if they have forfeited consumer trust through the provision of inaccurate information.

About the Author

Called to the Bar in 1997, Sarah Prager has been listed in the legal directories as a Band 1 practitioner in travel law for many years. Together with her colleagues at 1 Chancery Lane, Matthew Chapman QC and Jack Harding, she co-writes the leading legal textbook in the area, and has been involved in most of the leading cases in the field in the last decade. She was recently named Best Lawyers’ Travel Lawyer of the Year 2020/2021.

 

…And Finally…

We’re delighted to announce that Henk Soede has been invited to join chambers, after undertaking pupillage under the supervision of Andrew Spencer, Ian Clarke and Francesca O’Neill, during which he observed a wide range of chambers’ work, including claims of a cross border nature. Henk was called in 2019, which hardly seems possible to those of us who’ve been knocking around since the 1990s. Thanks are due to our solicitor friends who have instructed Henk in remote hearings during the pandemic; and indeed to all our loyal solicitors, who are legion. As dear old Euripides observed, real friendship is shown in times of trouble; prosperity is full of friends.

 

[1] CPR 16.5(2) requires that if an allegation is denied the Defence must (i) state the reason for the denial and (ii) if the Defendant is going to put forward a different version of events must state that version

Written by or involving: Sarah Prager, Ian Clarke, Thomas Yarrow

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