Law reports

COSTS

Discretion of court - costs of expert services performed by party's own employees - recoverable if reasonable

Admiral Management Services Ltd v Para-Protect Europe Ltd and others: ChD (Mr Justice Stanley Burnton): 4 March 2002

On a trial of preliminary issues, the claimant maintained that certain sums submitted for work done by its employees constituted recoverable costs.

The claimant had previously obtained an order providing for the imaging (copying) of the hard discs of computers on the first defendant's premises and the copying of other electronic storage media which the claimant alleged contained confidential information belonging to it.

Some of the claimant's employees carried out work investigating and obtaining evidence of the alleged torts committed by the defendants, including the imaging of the hard discs.

The claimant contended that those employees were experts and the work qualified as 'expert work'.

Alistair McGregor QC and Nigel Porter (instructed by Boyes Turner, Reading) for the claimant; Harvey McGregor QC and Gerard Clarke (instructed by Field Fisher Waterhouse) for the defendants.

Held, allowing the claim, that it was not unjust or unfair to permit a party to recover a reasonable sum in respect of expert services performed by its employees which, if done by someone who was not an employee, would have been recoverable as an item of costs; that that principle was not limited to actions for patent infringement and was applicable to all litigation involving claims of wrongful use of intellectual property, and there was no reason why a different principle in regard to the recoverability of costs should apply to intellectual property tort claims as against other claims; that although in general the work of a party's employees in investigating, formulating and prosecuting a claim by legal proceedings did not qualify for an order for the payment of the costs of and incidental to those proceedings, there was an exception to that general rule where the reasonable costs incurred by a party's own staff could be recoverable; and that, accordingly, the reasonable costs of the claimant's expert employees in investigating, formulating and presenting the claims against the defendants from the time that the claimant formed its suspicion of the wrongdoing that was the subject of the claims could qualify for a costs order.

Claimant seeking permission to appeal - single Lord Justice suggesting alternative dispute resolution - claimant pursuing appeal - action dismissed on appeal and court awarding no costs - parties' duty to further overriding objective of CPR

Dunnett v Railtrack plc; CA (Lords Justice Brooke, Robert Walker and Sedley); 22 February 2002

The claimant owned horses kept in a field near the mainline railway.

She brought a claim in negligence against the defendant arising from the death of three horses on the line.

She sought damages for loss and post-traumatic stress disorder.

The judge dismissed her claim.

She sought permission to appeal.

The single Lord Justice suggested that the case was suitable for alternative dispute resolution (ADR).

The defendant nevertheless pursued the appeal.

Simon Levene (instructed by the Bar Pro Bono Unit) for the claimant; Timothy Lord (instructed by Beachcroft Wansbroughs, Bristol) for the defendant.

Held, dismissing the appeal, that the court, mindful of its duty to the overriding objective in the Civil Procedure Rules 1998 (CPR) part 1, had suggested in terms that the case was one for ADR; that the parties, too, had a duty to further the overriding objective; that turning down ADR out of hand on the basis that it would necessarily involve payment of sums higher than any offers made to a claimant but refused was a misunderstanding of the purpose of ADR; that skilled mediators were often able to achieve satisfying results for both parties, which lawyers could not, and mediators might be able to give a solution beyond the powers of the court; that it was possible that, if a party turned down ADR out of hand when it was suggested by the court, such refusal could have uncomfortable cost consequences; and that, accordingly, no order for costs would be made.

CONTEMPT OF COURT

Newspapers publishing information derived from leaked forged document - claimant harmed by publication - newspaper publishers ordered to deliver up copies of document despite propensity to identify newspapers' source

Interbrew SA v Financial Times Ltd and others: CA (Lords Justice Ward, Sedley and Longmore): 7 March 2002

The claimant, considering making a takeover bid for an overseas company, commissioned a market-sensitive report from its advisers.

An unknown person (the source) obtained a copy, doctored it by inserting false information and passed it to the defendants who published information derived from it in their newspapers.

On publication the source's action had a significant impact on share prices to the claimant's detriment.

The claimant, wishing to trace the source and relying on Norwich Pharmacal Co Ltd v Customs and Excise Comrs [1974] AC 133, applied to the court for an order against the defendants for delivery of the leaked, forged documents.

The judge granted the application.

The defendants appealed.

Michael Tugendhat QC and Richard Parkes (instructed by Farrer & Co and Clifford Chance) for the defendants; Charles Hollander QC (instructed by Simmons & Simmons) for the claimant.

Held, dismissing the appeal, that section 10 of the Contempt of Court Act 1981 permitted disclosure to be ordered against the defendant newspaper publishers where it was 'in the interests of justice'; that the claimant had established that each defendant had facilitated a civil wrong committed by an unknown person against whom it sought redress; and that section 10 of the 1981 Act together with section 3 of the Human Rights Act 1998 did not operate to block the claimant's entitlement to an order for the sole reason that disclosure might enable it to ascertain the identity of the proper defendant to a breach of confidence action.

HOUSING

Claim for accommodation as homeless person - statutory scheme for internal review of council's decision and appeal to county court on point of law - compliant convention rights

Runa Begum v Tower Hamlets London Borough Council: CA (Lord Woolf CJ, Lords Justice Laws and Dyson): 6 March 2002

The council accepted that the claimant was homeless and offered her accommodation, which she refused.

An internal review, pursuant to section 202 of the Housing Act 1996, was conducted by a council officer who concluded that the accommodation offered was suitable and that it would have been reasonable for her to accept it.

The claimant appealed to the county court pursuant to section 204.

The judge held that the procedure for internal review under section 202 did not comply with article 6 of the European Convention on Human Rights, as scheduled to the Human Rights Act 1998, and allowed the appeal.

The council appealed.

Ashley Underwood QC and Kelvin Rutledge (instructed by Solicitor, Tower Hamlets London Borough Council) for the council; Paul Morgan QC and Steven Woolf (instructed by Maxim Solicitors) for the claimant.

Held, allowing the appeal, that the reviewing officer's decision constituted a determination of the homeless person's 'civil rights' within article 6(1); that the review did not, in itself, comply with the article 6(1) requirements of independence and impartiality; that, therefore, it was necessary to consider whether section 204 satisfied article 6(1), given that on appeal the county court could only examine questions of law; that judged as a whole, the statutory scheme lay towards that end of the spectrum where judgement and discretion, rather than fact-finding, played the predominant part; that, given that the section 202 review did not of itself fulfil article 6, the judge was perfectly entitled, within the jurisdiction given him by section 204, to subject the earlier decision to a close and rigorous analysis; and that, in those circumstances, section 204 conferred 'full jurisdiction' on the county court and satisfied the requirements of article 6(1) (WLR).

INSURANCE

Vessel constructive total loss following long detention owing to discovery of illegal drugs on board - war risk policy excluding liability arising from detainment for infringement of 'customs regulations' - insurers' liability excluded

Sunport Shipping Ltd and others v Tryg-Baltica International (UK) Ltd and others (The Kleovoulos of Rhodes): QBD (Mr Justice Cresswell): 27 February 2002

The first claimant's vessel was detained in Greece following the discovery of cocaine on board, and the master and crew were charged with drugs offences.

The detention was long enough for the vessel to be deemed, by the vessel's war risk insurance policy, a constructive total loss.

Clause 4.1.5 of the Institute War and Strikes Clauses, Hulls-Time 1.10.83 excluded from cover 'loss, damage...arising from arrest, restraint, detainment, confiscation or expropriation under quarantine regulations or by reason of infringement of any customs or trading regulations'.

The claimants brought an action on the policy, contending that the words 'customs ...

regulations' were to be narrowly construed and meant rules of law concerning duty levied on imports from abroad, so that clause 4.1.5 did not apply to exclude their claim.

Andrew Baker and Stephen Morris (instructed by Clyde & Co) for the claimants; Michael Thomas QC and Philippa Hopkins (instructed by Ince & Co) for the insurers.

Held, giving judgment for the insurers, that the words 'detainment ...

by reason of infringement of any customs or trading regulations' were to be construed in accordance with English law and given a businesslike interpretation; that since those words were intended to cover laws in force, not in a particular country, economic union of countries or geographical area, but in the particular country concerned which could be anywhere in the world, they were to be given a wide meaning; that 'customs ...

regulations' therefore included provisions having the force of law in the country concerned as to import or export duties or licences and as to import or export of controlled drugs and other prohibited goods, substances or materials; and that, accordingly, clause 4.1.5 applied to exclude the claim.

Action on insurance policy - claimant's alleged dishonesty in pleaded case - not entitling insurers to avoid policy for breach of utmost good faith

Agapitos and Another v Agnew and Others: CA (Lords Justices Brooke and Mance and Mr Justice Park): 6 March 2002

Shipowners brought an action against their insurers in respect of losses occasioned by the destruction of their ship by fire during hot work in a shipyard.

The insurers alleged breaches of warranty, including the shipowners' failure to obtain salvage association certificates to cover some periods when hot work was in progress on the ship.

The shipowners denied that failure, claiming that the hot work had not begun until the date on the certificate.

The insurers obtained evidence that the hot work had in fact begun two weeks before the date claimed by the shipowners and sought to amend their defence so as to avoid the contract of insurance, relying on section 17 of the Marine Insurance Act 1906 and on the common law duty of utmost good faith.

The judge refused to allow the amendment.

The insurers appealed.

Andrew Popplewell QC and Claire Blanchard (instructed by Ince & Co) for the insurers; Geraldine Andrews QC (instructed by Memery Crystal) for the shipowners.

Held, dismissing the appeal, that section 17 did not entitle the insurers to avoid the contract unless the fraud was material, in the sense that it would affect the underwriters' ultimate liability, and sufficiently grave to enable the underwriters, if they so wished, to terminate for breach of contract; that the duty of good faith under section 17 was superseded or exhausted by the rules of litigation, once litigation began, and, since the same policy considerations applied, it would be inappropriate to introduce a distinction between the duration of the impact of the common law rule of utmost good faith and that of section 17; that generally, a claimant who lied in litigation to embellish his claim did not lose the case as a result if he would otherwise have won anyway, and where the litigation arose from a contract of insurance the position was no different; and that, although the shipowners' alleged lying was reprehensible and caused suspicion that their case might not be a good one, the lie was not in itself a ground for judgment being given against them.

PRACTICE

Automatic stay of proceedings - application to lift - matters to be considered Woodhouse v Consignia Plc; Steliou v Compton: CA (Lords Justice Brooke, Laws and Dyson): 7 March 2002

The claimants each commenced an action prior to the coming into force of the CPR.

They were automatically stayed pursuant to CPR rule 51.1 and paragraph 19 of practice direction - Transitional Arrangements supplementing CPR part 51 after they did not come before a judge within the next year.

Each claimant's application for the stay to be lifted was refused by a district judge.

In the first case the claimant appealed.

In the second case the claimant's second application for the stay to be lifted was struck out as an abuse of process and the judge dismissed his appeal.

He appealed.

Nicholas Dean (instructed by Bhatia Best, Nottingham) for the claimant in the first case; Jonathan Spicer (instructed by Eversheds) for the defendant.

Colin Challenger (instructed by Collins Stone & Thompson) for the claimant in the second case; Paul Russell (instructed by Jacobs) for the defendant.

Held, allowing the appeals, that judges, when determining whether to lift an automatic stay imposed by paragraph19, should take into account CPR rule 3.9 under which they were instructed to consider all the circumstances of the particular case, including nine listed items; that judges (particularly less experienced judges) should submit themselves to the discipline of considering each of the listed items which appeared to them relevant, rather than simply latch onto one or two considerations, such as length of delay, for otherwise there was a serious danger that an appeal court might overturn their decision; that it was important to remember that, if a stay remained in place, the claimant would be deprived of access to the court; that, if judges made their decisions within the general framework provided by rules 3.9 and 1.1, they were unlikely to fall foul of article 6 of the European Convention on Human Rights; and that, where an application for the removal of a stay was opposed, solicitors should consider the adequacy of their evidence before embarking on the hearing because, under the CPR appeal regime, there might not be a second chance on appeal.