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The Weekly Roundup: Another Bank Holiday Edition

Articles | Tue 3rd May, 2022

The team seems to have done nothing but take days off lately; it’s exhausting. And especially so when the legislature and courts seem to be determined to take important decisions in our absence. The nerve of it! The High Court distracted us with an important case on mitigation of loss and provisional damages, and another on jurisdiction, whilst Parliament passed the Motor Vehicles (Compulsory Insurance) Bill, deVnuking the law of England and Wales at the same time as the new Motor Insurance Directive does the same for Europe. It is interesting to see the divergence and convergence of UK and Eurolaw post-Brexit, particularly when both the UK and EU are consulting on legislation relating to package travel arrangements. No doubt there will be more to come on this in the coming months…

 

Brain Teasers: Mitigation and Provisional Damages

The recent decision by Hill J in Mathieu v Hinds, Avivia Plc [2022] EWHC 924 (QB) provides personal injury practitioners with guidance on two potentially difficult areas: mitigation of loss, and the availability of provisional damages in head injury cases involving a risk of dementia.

The facts

The Claimant, an artist, sustained a serious brain injury when, aged 29, he was struck by a moped whilst crossing the road. Aviva insured the vehicle (though not the driver) and judgment was entered against both Defendants, with damages to be assessed. It fell to the trial judge to determine:

(i) Whether the impact of the Claimant’s injuries on his daily life is as extensive as he claims;

(ii) Whether the Claimant has mitigated his loss by refusing to undertake certain treatment;

(iii) Whether any damages to reflect lost income should be awarded gross to reflect the prospect of the Claimant being taxed on them;

(iv) Whether the Claimant’s injuries have hampered his artistic productivity and if so to what extent;

(v) Whether any award to reflect a suffer a shortfall in artistic productivity and thus income should be quantified using a multiplicand/multiplier approach or a ‘ Blamire ‘ approach; and

(vi) Whether the Claimant should be awarded provisional damages in relation to the chance of developing dementia due to his brain injury.

A full examination of all of these issues is outside the scope of this article, but the judgment rewards reading in full. Weighing in at 360 paragraphs and three appendices, it is not a five minute undertaking, but it is a careful and accessibly written exposition of the law and the science in these fields. There is also an interesting passage relation to the incidence of taxation in respect of foreign domiciled Claimants’ claims for loss of earnings, also outside the scope of this article.

Mitigation of loss

At paragraph 87 of the judgment Hill J set out the principles relating to mitigation of loss:

(i)  A claimant must take all reasonable steps to mitigate loss consequent upon the defendant’s breach and will be debarred from claiming “any part of the damage which is due to his neglect to take such steps” ( British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd (No. 2) [1912] AC 673 at 689 , per Viscount Haldane LC).

(ii)  In mitigating their loss, a claimant is only required to act reasonably and is not required to do anything outside the ordinary course of events. The standard of reasonableness is not high given that the defendant is an admitted wrongdoer ( McGregor on Damages (21st Edition), paragraphs 9-079 and 9-082).

(iii)  That said, a claimant must to some degree act with the defendant’s interests in mind as well as their own; and while a claimant might have acted reasonably as far as they are concerned, the issue is whether they have acted reasonably as between themselves and the defendant, in view of the need to mitigate their loss ( McGregor , paragraph 9-081 and Darbishire v Warran [1963] 1 WLR 1067 , CA, per Harman LJ at p.1072).

(iv)  Whether a claimant has mitigated their loss is a question of fact not law ( Payzu v Saunders [1919] 2 KB 581 , CA).

(v)  The defendant bears the burden of proving that it was unreasonable for the claimant to take certain steps in the past or would be so unreasonable in the future (see, for example, Steele v Robert George and Co (1937) Ltd [1942] AC 62 and Sainsburys Supermarkets Ltd v Visa Europe Services LLC [2020] UKSC 24 at [211] ).

(vi)  A defendant proposing to argue for a claimant’s failure to mitigate must give notice well before the hearing by the statements of case or otherwise ( Geest Plc v Lansiquot [2002] 1 WLR 3111 PC at [16]) and must put forward a “concrete case” to demonstrate what the claimant might reasonably have done ( Samuels v Benning [2002] EWCA Civ 858 at [26] ).

There follows a comprehensive overview of the caselaw on refusal of medical treatment.

In Mr Mathieu’s case Aviva argued that he had failed to mitigate his loss in not pursuing treatment aimed at reducing his post-TBI headaches, and fatigue management sessions. The difficulty for the insurer, however, was that as is so often the case, the medicolegal experts did not agree about the likely efficacy of the treatment contended for, although they did agree that the headache treatment suggested carried a significant risk of side effects. The court concluded:

On balance, in my view, it is entirely understandable for him to decline medication which might generate two side-effects of which he is particularly fearful: further drowsiness that is likely to dull his creativity and further cognitive decline in the form of dementia that would be likely to have the same effect. Indeed, from my assessment of him it is hard to imagine two side-effects he would be less willing to tolerate. Given the focus on his art this is an understandable position for him to take…

It is also relevant that [the Claimant’s medicolegal expert] considers that the Claimant is acting reasonably in this regard. Ultimately it is for the court to decide what is reasonable but the fact that there are two experts with differing views on the issue makes it harder to find that the Claimant is acting unreasonably.

The Defendant therefore did not discharge the burden of proving that Mr Mathieu had failed to mitigate his loss; and furthermore, the judge considered that it had not proven that if he had undertaken the suggested treatment, it would have been likely to have been effective. She came to a similar conclusion in relation to fatigue management sessions, with the additional difficulty for the Defendant that it had not pleaded in its Counterschedule that Mr Mathieu ought to have undertaken this treatment.

Provisional damages

The discussion around provisional damages appears at paragraphs 289 to 358 of the judgment and encompasses an overview of the law relating to when it will be appropriate to make such an award, followed by an analysis of the medicolegal evidence relating to epilepsy (in respect of which an award of provisional damages was made) and dementia (in respect of which an award was not made). The parties’ experts disagreed as to whether or not it has been shown that traumatic brain injury increases the risk of the development of dementia, and the judge concluded (paras.328, 329) that:

The Claimant needs to prove, on the balance of probabilities, that there is a more than fanciful chance that the TBI will cause him dementia in the future. This requires him to prove that as a matter of generality a single TBI can cause dementia, and that this risk applies to him.

In my view the answer to this first, general question remains doubtful as a matter of science.

She considered the research conducted to date and found herself bound to ‘recognise that the most recent meta-analysis is itself leaving open the question of whether there is a sound scientific basis for the assertion that a single TBI can cause dementia.’

The claim for provisional damages in relation to dementia therefore failed. Even had the judge felt herself able to conclude that there was a more than fanciful risk of the development of dementia, moreover, she would not have exercised her discretion to make an award for provisional damages. This is also due to the current state of medical knowledge; it is not presently possible to determine why a patient has developed dementia, which is a multifactorial condition which may be caused by a list of factors unrelated to the original TBI. Even if Mr Mathieu were to develop dementia, therefore, it would not be possible to establish causation.

For these reasons the development of post-TBI dementia cannot be said to be an example of “the clearest case” envisaged in Allott ; a “clear and severable risk”, “clear- cut event” or “clear-cut identifiable threshold” as described by Scott Baker J in Willson ; or one where, with ease, it could be separated from the existing medical condition”, per Yale-Helms and XX .

Conclusion

The Claimant was awarded a shade over £3 million, with provisional damages to take into account his risk of developing epilepsy but not dementia. Given that he had claimed £33,617,057 in his Schedule of Loss, this may be seen as a poor result for him; on the other hand, the Counterschedule had suggested a total award of £49,500, indicating that the Defendant had significantly undervalued the claim. The Claimant’s submissions were accepted in relation to mitigation of loss, the incidence of taxation, and the method of calculating the claim for loss of earnings, although his estimate of his likely earnings as an artist but for the accident was not accepted. The court’s analysis of the law and science relating to the likelihood of the development of dementia in Claimants who have sustained a traumatic brain injury will be of wider interest to all practitioners dealing with these seriously injured Claimants, and it may well be that as medical science makes further discoveries in understanding dementia the law will develop in this area. For now, however, the decision is an indicator that the courts are unlikely to award provisional damages in these cases, at least without more persuasive medicolegal evidence than was available to the court in this instance.

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. Last year she was named Best Lawyers’ Travel Lawyer of the Year 2020/2021 and the Lawyer Monthly Women in Law Awards 2020: Personal Injury, and she was a member of the Consultative Group of Experts to the UNWTO Committee for the Development of an International Code for the Protection of Tourists, and is a member of the Admiralty Court Users’ Committee. She undertakes purely domestic high value personal injury work as well as cross border work and has a wealth of experience of difficult and sensitive cases.

 

Jurisdictional Jollies

In JHH Enterprises Ltd v Microsoft Corporation Ltd & Ors [2022] EWHC 929 (Comm), Picken J was asked to determine (a) a strike out application made by Microsoft UK (“D2”) and (b) a jurisdictional challenge brought by Microsoft US (“D1”) and Microsoft Ireland (“D3”). This note is concerned solely with the jurisdictional challenge.

Background

Valuelicensing (“C”) resells pre-owned perpetual licenses for various software products, including Microsoft Office. Accordingly, C was in competition with Microsoft, which sells new licenses and subscriptions. C alleged that the Ds had engaged in a multi-year campaign designed to stifle the market for pre-owned perpetual licenses. Damages and other relief were sought for alleged breaches of sections 18 and/or 2 of the Competition Act 1998, Articles 102 and/or 101 of the Treaty on the Functioning of the European Union and/or Articles 54 and 53 of the Agreement on the European Economic Area.

Jurisdictional challenge

In terms of the court’s jurisdiction over D1 and D3, C sought to rely on the “necessary or proper party” gateway contained in CPR PD6B para 3.1(3), with D2 as the anchor defendant. The corollary of Picken J dismissal’s of D2’s application for strike out and/or summary judgment was that this jurisdictional gateway was met: [70]. The only remaining issue concerned forum non conveniens.

D1 and D3 contended that C had failed to show that England and Wales was “clearly” the most appropriate forum for the trial (see Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 at 418E). It was submitted, firstly, that the focus of the claim was a policy set by D1 in the United States, which D2 had no involvement in, and an agreement to which D3 was a counterparty. Accordingly, the fact that C and D2 were both English should be accorded limited weight: [72]. Picken J considered that this ignored the fact that the UK was a key affected market and that many of the software sales would have been within the UK: [72]. D1 and D3 also placed reliance on Lord Mance’s observations in VTB Capital Plc v Nutritek International Corp & Ors [2013] UKSC 5 at [62] that the location of the witnesses lies “at the core of the question of appropriate forum”. It was submitted that there was likely to be only one witness who lived in England, though it seemed ‘very likely’ that any expert witnesses would also be based in England. Picken J concluded that this was a “non-point since it is clear that there will be witnesses from both the US and this country”: [73]. Further, as D1 and D3 contended that Ireland was the more appropriate forum, it was relevant that none of the witnesses referred to in the statements was based in Ireland: [74].

In terms of the factors weighing in favour of England being the most appropriate forum, the first point was that the proceedings would continue in England in any event against D2 even if the claims against D1 and D3 were stayed. In circumstances where C could pursue its claim against D2 “as of right”, there was an inevitable risk of duplication and inconsistent findings: [76]. A further factor was that English law was applicable to a large part of C’s claims: [77]. It was notable that D2’s position at trial was likely to be that English law has diverged from EU law in the post-Brexit period. In those circumstances, it was considered that it would be inappropriate for a court in Ireland to be determining whether D2 were correct about that. On the other hand, the English court was very experienced in applying EU competition law, either as part of English law (in respect of the pre-Brexit period) or as part of the laws of other EU/EEA member states: [78].

Conclusion

For all of those reasons, the jurisdictional challenge was dismissed. D1 and D3 were necessary and proper parties to the claim, and England was clearly the most appropriate forum for the trial.

About the Author

Henk Soede was called to the Bar in 2019. Since April 2020, he has been instructed by solicitors for both Claimants and Defendants in cross border disputes, package travel and other related claims. He is eager to build on his experience in these areas​, but accepts briefs in all chambers’ areas of work.

 

…And Finally…

You can imagine our thoughts on discovering that, due to a crackdown on problem drinking instigated by the Spanish government, British holidaymakers on all inclusive holidays will be limited to a mere six free alcoholic drinks a day, and then only three with lunch and three with their evening meal. It seems that the local authorities in selected Mallorcan and Ibizan resorts are so fed up with dealing with the consequences of unlimited alcohol consumption that they have initiated the ban in such hotspots as Magaluf and Playa de Palma, as well as discouraging pub crawls, happy hours and two-for-one cocktail deals. We fear, however, that they have not taken into account the doughty determination that has made British tourists such a byword across the globe; it appears that holidaymakers are simply purchasing alcohol outside the confines of their all inclusive deals, and then returning to the UK determined to pursue their tour operators for mis-selling the all inclusive nature of the trips. Whether or not a holiday described as ‘all inclusive’ can fairly be said to have been misrepresented where the tour operator has informed the consumer in the small print of the legal limitations placed on accommodation suppliers by local authorities is an interesting question, and one to which we will no doubt have the answer in the coming months. We will of course keep our readers updated on this crucial matter of contractual interpretation.

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