10
Aug
20
Articles, Travel & Cross Border Claims
The Weekly Roundup: Sun, Sea and Strike Out

After a few days of weather for which the only proper adjective is ‘scorchio’, those returning from their beach holidays abroad and now stuck in quarantine (see, for one, the Transport Secretary), may well have found the back garden as bountiful as the Balearics when it comes to the old British art of tan-crafting. With sun worship in mind, we re-examine the Great Refund Saga as holidaymakers find their packages being cut short by Government and airline responses to the ebb and flow of the coronavirus tides. Then, talking of waves, we move on to consider the murky limitation waters of the Athens Convention and urge careful sailing through the somewhat choppy jurisprudential straits. Finally, trans-embarking from sea to land, we consider a recent Court of Appeal decision looking at abuse of process under the RTA Protocol, which may bring a little sunshine to those clouded with fear of the consequences of mis-valuing personal injury claims.

The sacred British Holiday

On 27 July the FCO responded to news of Covid-19 outbreaks in Aragon, Navarra and Catalonia by advising against all non-essential travel to Spain, the Canary Islands and the Balearic Islands. Although tourists already in Spain were not advised to end their holidays early, the FCO made clear that such persons would be required to self-isolate for 14 days upon their return to the UK.

Much to the dismay of hopeful holidaymakers, a good portion of airlines and package holiday providers have responded by cancelling all flights and package holidays to Spain that were due to take place between now and mid-August. But what about those already in Spain? Most package providers are allowing their clients in Spain to finish their holiday in peace.

But at the end of last week, Jet2 announced it would be cancelling most flights to and from Spain and contacting those on package holidays about returning early on alternative flights. The apparent basis for Jet2’s decision is that it could not afford to send empty planes to pick up passengers in Spain on different dates over the next two weeks. Understandable, no doubt, but those who hold their annual holiday to Spain in an almost holy esteem were not going to give in easily. Indeed, there are already reports of resistance in pockets of Majorca and Tenerife, with some families outright refusing to accept an early return.

So what do the Package Travel and Linked Travel Arrangements Regulations 2018 have to offer the beleaguered holiday makers? The contractual term implied by Regulation 15 is likely to be the principal means of recourse. A tour operator terminating a holiday early and cancelling the scheduled return flights is likely to amount to substantial non-performance for the purposes of Regulation 15, entitling the traveller to a partial refund and potentially compensation.

What of holidaymakers who refuse to return early and reject early repatriation and offers of refunds? The cost of alternative return flights would be damage for which the customer could seek compensation from the tour operator under Regulation 16. But there’s no entitlement to compensation where there are unavoidable and extraordinary circumstances (16(4)) – i.e. a situation beyond the tour operator’s control, the consequences of which could not have been avoided even if all reasonable measures had been taken (Regulation 2(1)). Flare-ups of Covid-19 are beyond a tour operator’s control, as is a change in FCO advice. But does that go so far as to cover a voluntary decision to cancel flights on cost grounds?

After months of lockdown, this tale is a reaffirmation of the sanctity with which the Briton views The Holiday. It is sacred, it is essential, and it had better be annual. As Covid-19 threatens to rear its head once more in a second wave, and travel advice continues to change at short notice, the messy skirmishes between holidaymakers and their would-be facilitators will doubtless continue. Winter is (or may be) Coming – but Britons still need their sunshine.

About the Author

Henk Soede was called in 2019 and is chambers’ latest acquisition, having undertaken 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.

 

Limitation and the Athens Convention

The limitation period in the Athens Convention (as amended) is a major obstacle that has caused many a good claim to sink.

Article 16 provides that any action for damages arising out of any death or personal injury to a passenger shall be time-barred after a period of two years from the date of disembarkation of the passenger. It goes on to say that “the law of the Court seized of the case shall govern the grounds for suspension and interruption of limitation periods, but in no case shall an action under this Convention be brought after… (a) a period of five years beginning with the date of disembarkation of the passenger or from the date when disembarkation should have taken place, whichever is later; or, if earlier; (b) a period of three years beginning with the date when the claimant knew or ought reasonably to have known of the injury, loss or damage caused by the incident.”

In Higham v Stena Sealink Ltd [1996] 1 W.L.R 1107 the claim was issued a few weeks after the second anniversary of the disembarkation. The Claimant invited the court to disapply the limitation period, under Section 33 of the Limitation Act. The Court of Appeal held that Section 33 did not provide for “suspension” or “interruption” under Article 16 of the Athens Convention and could not be used to dis-apply the 2 year Athens Convention limitation period.

This is not the end of the story, however, because the Supreme Court considered the Athens limitation period in the Scottish case of Warner v Scapa Flow Charters [2018] 1 W.L.R. 4974. One claimant was a child, and argued that the Scottish rules postponing the start of the limitation period for claimants under a disability were rules permitting a “suspension” of the limitation period, and therefore provided a child claimant with additional time to bring a claim. The Supreme Court agreed, holding that “the grounds of suspension … of limitation periods” in Article 16 “are sufficiently wide to cover domestic rules which postpone the start of a limitation period as well as those which stop the clock after the limitation period has begun.” This will be highly persuasive authority to a court considering the English Limitation Act. A word of caution, however: the rules of disability do not override the Athens long-stop. And in all cases, the safest course to chart is to issue within 2 years.

About the Author

Andrew Spencer was called to the Bar in 2004, and is listed in the Legal 500 as a Band 1 practitioner in travel law. He acted for the Claimant in the seminal case of Japp v Virgin Holidays Limited [2013] 11 WLUK 131, in which the Court of Appeal considered the time at which applicable local standards should be determined for the purposes of liability under Regulation 15(2) of the Package Travel Regulations; but he is equally comfortable acting for Claimants and Defendants in all travel related claims.

 

Swings and Roundabouts: the Recent Decision in Cable v Liverpool Victoria Insurance Co Limited [2020] 7 WLUK 475

In a curious recent decision the Court of Appeal appears to have gone some way towards condoning an abuse of process on the part of a Claimant.

Mr Cable sustained a whiplash injury in a road traffic accident which took place on 1st September 2014, and on 24th September 2014 his solicitors submitted a claim notification form through the RTA portal. The Defendant insurer soon admitted liability, and made a £1,000 interim payment. There followed a period of inactivity on the part of his solicitors, notwithstanding the Defendant’s engagement with the portal process. Eventually, on 19th April 2016, the insurer made a Part 36 offer in the sum of £10,000 on what can only have been a speculative basis; unbeknown to them at this time, Mr Cable was suffering from neurological symptoms, including tinnitus, and had lost his job.

The Court of Appeal, in considering the facts of the case, considered that by mid 2017 Mr Cable’s solicitors knew or ought to have known that the claim fell outwith the portal by reason of its value (the loss of earnings claim alone amounted to over £200,000 by that time), but they did not notify the Defendant of this, or remove the claim from the portal process. On the contrary, on 25th July 2015, they issued Part 8 proceedings seeking a stay of proceedings, followed by determination of the value of the claim under the portal Protocol.

The Court of Appeal found that the only reason it was necessary for the Claimant’s solicitors to seek a stay of proceedings was their own failure to progress the claim through the portal process; and that at the time they issued Part 8 proceedings they knew or ought to have known that this was inappropriate by reason of the value of the claim.

An ex parte stay was duly granted, and four days before it expired the Claimant’s solicitors wrote to the Defendant enclosing the medical reports supportive of a neurological element to the injury and informing it that the value of the claim had very significantly increased. Two days before the stay was due to expire they wrote to the court applying for the stay to be lifted and for the matter to proceed as a Part 7 rather than a Part 8 claim. They prepared an amended claim form, Particulars of Claim and a Schedule of Loss in which a claim was made for some £2.2 million.

Perhaps understandably, the Defendant considered itself prejudiced by the conduct of the Claimant’s solicitors, and applied for the claim to be struck out as an abuse of process.

At first instance District Judge Campbell, sitting at Birkenhead County Court, found that the Claimant’s solicitors’ conduct did amount to an abuse of process, which had prejudiced the insurers in a number of respects: they had not been able to set an appropriate reserve, matters had been delayed, by keeping the matter within the portal inappropriately the Claimant’s solicitors had circumvented their duty to make full timeous disclosure, and they had deprived the Defendant of an opportunity to have the Claimant examined by the medical experts of its choice. She struck the claim out.

On appeal Judge Wood QC upheld this decision on the basis that the delays and failures to remove the claim from the portal process constituted an abuse of process which had prejudiced the Defendant insurer.

The Claimant appealed to the Court of Appeal.

The Court of Appeal confirmed that failure to comply with the Civil Procedure Rules can, in appropriate cases, constitute an abuse of process. Indeed, in Lewis v Ward Hathaway [2015] EWHC 3503 (Ch) the deliberate understatement of the value of a claim had amounted to an abuse of process, although the claim was not struck out. Nevertheless, in that case the Defendant was granted summary judgment because the abuse of process meant that the claim had not been properly brought within the relevant limitation period.

The Court of Appeal in Cable emphasised that striking a claim out is a draconian action of last resort, and that simply because an abuse may have taken place, it does not follow that a claim should be struck out; ‘the finding of abuse of process does not lead inexorably to the striking out of the claim’. Having made this determination, the court considered the two questions independently of each other, and found that the Claimant’s solicitors’ conduct did amount to an abuse of process, but that it was not proportionate to strike out the claim.

Interestingly, the Court expressly held that an abuse of process need not lead to unfairness; the Claimant’s solicitors’ conduct, in failing to issue a Part 7 claim, and in seeking an inappropriate stay, constituted an abuse whether or not it caused unfairness to the Defendant. Considerations of fairness were, however, relevant to the question of whether the claim should be struck out.

The Court balanced the deprivation of the Claimant’s Article 6 right to access to justice against the prejudice to the Defendant caused by the delay in notifying it of the true value of the claim. It held that there was no evidence that in the absence of the abuse anything would have been done differently so as to affect the value of the claim (for example, there was no evidence that any opportunity for augmented rehabilitation had been missed), and no evidence that the Defendant had lost an opportunity to reserve appropriately (there was some criticism of the District Judge’s decision to take judicial notice of this matter, notwithstanding the commonly known issues around reserving). On the evidence, the Defendant therefore failed to show prejudice such that the Claimant should be deprived of his right to access to justice. The Court held:

“…The appellant was the victim of an accident for which the defendant had long ago admitted liability. His claim was started in good time under the RTA Protocol, and he was not responsible for the catalogue of errors and delays since then. His claim form was issued within the prescribed three years. If that claim was struck out now, he would have to start all over again, this time with a professional negligence claim against his current solicitors, with all the risk and uncertainty, not to say cost, that such a claim would involve. Moreover, that would be a loss of a chance claim, which is inevitably an inferior type of satellite claim, particularly when compared to the present proceedings, which involves a claim against the primary defendant who has already admitted liability…”

As a result, the claim was reinstated, but the Court did punish the abuse of process by ordering that the Claimant should pay the Defendant’s costs of the claim up to and including the day of the decision at first instance, on an indemnity basis; and that he should not recover interest on his special damage claim up until that date.

This decision is heartening for those solicitors who, knowingly or unknowingly, underestimate the value of their clients’ claims; it appears that in such circumstances a Defendant will have to prove significant prejudice if a claim is to be struck out, even where the client has what some may regard as a cast iron claim in negligence against his solicitors. As such, it is something of an oddity, and it is tempting to conclude that the decision is likely to be the subject of further judicial comment along the lines so familiar recently: ‘practitioners have entirely misunderstood the meaning of the Court in this case…’. It is probably better to keep valuation of smaller claims under constant review, and in particular on receipt of medical evidence and on any change in a claimant’s employment circumstances, than it is to rely on this authority in resisting applications to strike claims out.

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…

Always read your international treaties carefully. Iain Duncan Smith this week discovered to his dismay that the same oven-ready Withdrawal Agreement which was blitzed through the Parliamentary kilns at the beginning of the year turns out to have tied the UK into the EU loan book for financial packages agreed before the end of the transition period (i.e. before 31 December 2020). As a consequence of recent EU emergency financial measures, the UK’s payments may now total something in the region of £160bn in instalments over the next three decades. Now, to be fair to the Rt Hon gentleman, he wasn’t to have expected that such a global crisis as Covid-19 would occur before the end of this multiannual financial framework cycle, but he might have expected something could come up. It’s a morality tale: caveat covenantor, know your contract, or, if I may dare, hire a friendly barrister to look at it for you. Put another way, a dish may be oven-ready but if you suffer from allergies, it’s probably worth checking the ingredients over for things you may find difficult to digest.

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.

Written by or involving: Sarah Prager, Andrew Spencer, Thomas Yarrow, Henk Soede

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