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Case law update

IPA Insolvency Practitioner newsletter, January 2022

Contents

An insolvency case law update prepared by Alison Kirby, Associate Director at Manolete Partners PLC.


Robinson v Liverpool University Hospital NHS Foundation Trust and Mercier

Background

This is an unreported case from Liverpool County Court and is a reminder of considerations for any expert to apply when approached to act as an expert witness. In this case a third party costs order was made for wasted costs in the sum of £50,543.85 payable by the expert to the Defendant. It is a reminder for experts to accept only instructions of which they have recent, relevant expertise.

The Issues Before the Court

The Claimant (C) brought a claim for dental negligence against the Defendant (D) for hospital treatment that she received. C was referred from a General Dental Practitioner (GDP) to an oral and maxillofacial surgeon (OMS) who undertook the work. The OMS only removed two of the three teeth referred for extraction.

The Expert (E) argued that no reasonable dental surgeon could have concluded that the third tooth did not need extraction and was restorable. Following E’s evidence at trial, C withdrew her claim.

Decision and Reasoning

D sought a third party costs order. The jurisdiction is found in Section 51(1) and (3) of the Senior Courts Act 1981 and is supplemented by CPR 46.2 and allows the Court to determine by whom and to what extent costs are to be paid. These provisions confer jurisdiction in respect of third party costs in the County Court, High Court and Court of Appeal.

The basis of the Order sought against E was that D’s costs would have been avoided, but for E’s conduct. E was a GDP and had had no experience of the removal of teeth under general anaesthetic since 2000. As such, it was argued, he should not have been expressing expert opinion about the standard of care given by an OMS.

The Judge agreed, finding that upon receiving instructions, E should have recognised that he did not have the recent or relevant experience to comment upon whether an OMS, who was exercising a different role to a GDP had made errors amounting to negligence.

The Judge found that E had shown a flagrant disregard for his duties to the Court and had done so from the outset in preparing a report, but for which, C’s claim would not have been brought.

The Judge made an exceptional ruling, that all of the costs sought in D’s costs budget had been caused by E’s disregard for his duty and would be paid by E to D to reimburse D for his wasted costs.

Commentary

Expert evidence, and the lack of assistance it provided the court, was also the subject of some paragraphs in the recent High Court Case of Reynolds (as liquidator of CSB 123 Ltd) v Caroline Stanbury [2021] EWHC 2506 (Ch). The Applicant’s expert evidence “did not stand up to close scrutiny” and “his oral testimony failed to comply with his overriding duty to assist the Court”.

Sections of this case are a ‘must have read’ for any expert witness.


Patisserie Holdings PLC and others v Grant Thornton UK LLP [2021] EWHC 3022 (Comm)

Background

In the continuing interlocutory skirmishes between these parties,  there has been an unsuccessful application for disclosure of all audit files or working papers under PD 51U.5.11, PD 51U.9.4 or CPR 3.1(2)(m).

The Issues before the Court

The relevant sections of the procedural code as summarised as:

  • PD 51U.5.11 requires a party to disclose documents to another party where it is necessary to understand the claim or defence they have to meet; and
  • PD 51U.9.4 allows the Court to make an order for Extended Disclosure in stages; and
  • CPR 3.1(2)(m) gives the Court power to take any step or make any order to manage the case and furthers the overriding objective.

Decision and Reasoning

The Judge drew the following conclusions:

  • PD 51U.5.11 must be interpreted narrowly and in line with the overall purpose of PD 51U. the Claimants argued that they needed the disclosure to formulate their reply and referred to the Defendant’s defence complaining of lack of particularisation. However, that was not replying to a substantive issue raised by the defence, but was part of the Claimant’s original case. To interpret PD 51U.5.11 broadly would cut across the structure of PD 51U which requires a focussed Initial Disclosure, and after that the Court decides whether Extended Disclosure is reasonable and proportionate. Therefore, this application did not and could not fall within PD 51U.5.11.
  • While PD 51U.5.11 requires parties to act constructively and seek to agree matters, however, this was premature. The application was premised upon PD 51U.9.4, on the basis that the disclosure model and the Issue had been agreed in the draft disclosure Review Document and therefore formed part of an Extended Disclosure Order. However, the Court decided that merely because the documents went to an Issue agreed between the parties, in making an order at this early stage, would be failing in the Court’s obligation to manage the disclosure process as contemplated by PD 51U.
  • It followed, that the Court’s inherent jurisdiction in CPR 3.1(2)(m) should not be exercised in a way that disapplied PD 51U and its specific purpose of achieving a structure and rules limiting disclosure to what is reasonable and proportionate.

In a final conclusion, the Judge decided that even if she were wrong on the jurisdiction, on the facts and evidence the Claimants had not made out a case for disclosure of the documents sought either under PD 51U or the Court’s residual jurisdiction.

Content courtesy of IPA corporate partner Manolete Partners PLC.

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