The London Borough of Islington -v- Bourous
Insurers take note, you should be aware of the rules and cannot complain when they are applied.
In ‘The London Borough of Islington -v- Bourous [2022] EWCA Civ 1242’ the Court of Appeal joined two appeals as they raised similar issues. The Claimant in each case was a taxi driver who was injured in a road traffic accident. Each made a claim under the Protocol for Low Value Personal Injury Claims in Road Traffic Accidents (‘the RTA Protocol’). Each succeeded in the county court. The issue concerns the circumstances in which a claimant who makes a claim under the RTA Protocol for personal injuries can recover for damages to reflect the losses he suffers because the vehicle he uses to earn his living was damaged or written off, and he could not use it until it had been repaired or replaced. The Appellants in both cases (who were the defendants in the county court) are, in effect, the insurers.
Mr Siad Bourous had brought a claim against the Defendant (Appellant) following an RTA in which his taxi sustained damage. In addition to claiming for credit hie charges of £11,825.49 in respect of the hire of a replacement vehicle while his own vehicle was unavailable, the Claimant sought to recover damages for personal injury and storage. Vehicle repair charges had been agreed. The Defendant had offered £6,747.84 for the hire costs stating, ‘ We can only consider a rate of £151.36 inc VAT per day’.
Liability was admitted within the portal at Stage 1. As damages could not be agreed at Stage 2, pursuant to CPR PD 8B, a claim was brought under CPR 8, following which the matter proceeded to a hearing at Stage 3 on 21 July 2020. At that hearing, the Defendant argued that the appropriate remedy open to the Claimant was to claim for loss of profit and not hire in accordance with Hussain v EUI ltd [2019] EWHC 2647 (QB). As the Claimant had evidently neither made a claim for loss of profit nor provided any evidence to support personal use of the damaged vehicle or any need to continue working, the hire claim was dismissed, although judgment was given for storage and repairs in the sum of £4,076.
The Claimant appealed with the permission of the Deputy District Judge stating that it was not open to the Defendant to raise the issue of loss of profit for the first time at the Stage 3 hearing when the only dispute identified by the Defendant at Stage 2 was in respect of the credit hire charges was in relation to the rate of hire.
In particular, the Claimant relied in the decision of His Honour Judge (HHJ) Freedman in Mulholland v Hughes [2015 Lexis Citation333, whether the Claimant’s appeal succeeded in circumstances where the Defendant had failed to raise the issue of need at Stage 2 and went on to argue need at Stage 3.
The Claimant successfully appealed against that decision on the grounds that the Defendant (Appellant) had failed to properly identify the basis for disputing hire within the RTA Protocol, having only raised the issue of rates with Stage 2 and the issue of loss of profit for the first tome at the Stage 3 hearing itself.
The dismissal was set aside. The Court declined to transfer the matter to Part 7 and remitted the case back for determination at a Stage 3 hearing before a different District Judge.
The matter was further appealed by the Appellants before Lady Justice Elisabeth Laing.
Two appeals were joined as they raised similar issues. The Claimant in each case was a taxi driver who was injured in a traffic accident. Each made a claim under the Protocol for Low Value Personal Injury Claims in Road Traffic Accidents (‘the RTA Protocol’). Each succeeded in the county court. The issue concerns the circumstances in which a Claimant who makes a claim under the RTA Protocol for personal injuries can recover for damages to reflect the losses he suffers because the vehicle he uses to earn his living was damaged or written off, and he could not use it until it had been repaired or replaced. The Appellants in both cases (who were the Defendants in the county court) were, in effect the insurers.
Both Appellants in this case suggested that their appeals raised points of wide importance about the scope and interpretation of the RTA Protocol. Lady Justice Elisabeth Laing disagreed with this. Lady Justice Elisabeth Laing considered, on the contrary, that each appeal turned on what, in the framework of the RTA Protocol, was actually in issue in each claim at the Stage 3 hearing before the Deputy District Judges and before the Circuit Judges who heard the appeals from decisions of the Deputy District Judges.
The version of the RTA Protocol which applied in these cases applied to all relevant claims issued on or after 31 July 2013. It had to be used in all claims which arose from a road traffic accident, and which included a claim for damages for personal injury, and which the claimant valued at less than £25,000, and for which the small claims track would not have been the normal track if proceedings were issued (paragraphs 1.2(1) and 4.1). Damages claimed in relation to a vehicle (including credit hire charges) did not count towards the £25,000 total (paragraphs 1.1(18) and 1.4 of the RTA Protocol).
Jackson LJ made ten general points about the RTA Protocol that were significant for these appeals.
- Stage 2 leads, or should lead, to a narrowing of the issues (paragraph 6).
- PD 8B ‘substantially modifies the Part 8 procedure so as to make it suitable for low value RTA claims where only quantum is in dispute’ (paragraph 9).
- That procedure is designed to minimise costs (paragraph 9).
- It delivers ‘fairly rough justice’ (paragraph 9).
- That is justified because the sums are small, and a ‘full-blown trial’ is not appropriate (paragraph 9).
- The evidence the parties can rely on at Stage 3 is limited to what is in the CP (paragraph 9).
- The RTA Protocol has ‘an inexorable character’. If a case is in it, the parties ‘follow the designated steps or accept the consequences’ (paragraph 11).
- The rules specify when a claim stays in the RTA Protocol and when it may or must drop out (paragraph 11).
- The costs which District Judge imposed on the parties were ‘totally disproportionate to the sum at stake’ (paragraph 29).
- The RTA Protocol is ‘carefully designed to whittle down the disputes between the parties as the case passes through the various stages. By Stage 3, the amount in dispute should be much smaller than it is at Stage 1 (paragraph 33).
Having summarised the relevant law, the procedural histories and the arguments at some length Lady Justice Elisabeth Laing stated that the reasons for her decision could be brief. The appeals turned on the uncontroversial application of the RTA Protocol to their own procedural fact and did not raise any wider points.
As set out in Paragraph 143 of the Judgment, Lady Justice Elisabeth Laing said:
“Defendants in these cases are almost always insurers, as they are in these two appeals. There are hundreds of thousands of these claims every year, and they are routine for insurers. Insurers can be assumed to be familiar with the provisions of the RTA Protocol and to have ready access to legal advice if an unusual or difficult issue arises in one of these cases. I have summarised the relevant provisions of the RTA Protocol and the decision in Phillips v Willis. The themes which emerge from both are that the RTA Protocol is intended to be a quick and cheap procedure to enable the parties to settle at a cost which is proportionate both to the sums at stake, and to the run of the mill legal issues which arise, and in a way which does not place an undue burden on the courts. The RTA Protocol is designed to enable the parties to narrow and limit the issues in dispute, so that if a decision by the court is necessary at Stage 3, that decision will only concern the narrow issue which the parties’ exchanges under the RTA Protocol will already have defined for the court. As Jackson LJ observed, the RTA Protocol has ‘an inexorable character’. If the parties do not observe its provisions, they bear the consequences: for example, if an issue is not raised, or evidence is not served when it should have been, it can (in general) not be raised later.”
The Note in the White Book
There is a passage in the White Book which the Court of Appeal held is incorrect
Paragraph 35 of the Judgment
The editorial note in paragraph 8BPD.7.1 of the White Book says that Phillips v Willis [2016] EWCA Civ 401; [2017] RTR 4, ‘illustrates that transfer out of the Protocol Stage 3 procedure to Part 7 will be rare and for exceptional cases only’.
Post-script: the note in the White Book
I consider that the note (see paragraph 35, above) is not an accurate statement either of the actual decision in Phillips v Willis, or of its implications. The power to transfer cases to Part 7 is not constrained in the way that the note suggests.
Conclusion –
The outcome of this case is that Insurers should be aware that they need to follow the rules contained within the RTA Protocol as the failure to do so does not permit grounds to appeal decisions made without good reason.
How can PIC help?
PIC can provide advice on the rules contained within the RTA Protocol.
Susan Marshall, Costs Lawyer
16/02/2023