Baker v Quantum Clothing Group Ltd [2007] EWCA Civ 750

Case No B3/2007/0795(A), B3/2007/0795(B)[2007] EWCA Civ 750
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM NOTTINGHAM DISTRICT REGISTRY
(HIS HONOUR JUDGE INGLIS)
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate Thursday, 28 th June 2007
Before
LORD JUSTICE RIXLADY JUSTICE SMITH
Between
BAKERAppellantQUANTUM CLOTHING GROUP LIMITEDRespondent
(DAR Transcript ofWordWave International LimitedA Merrill Communications Company190 Fleet Street, London EC4A 2AGTel No: 020 7404 1400 Fax No: 020 7831 8838Official Shorthand Writers to the Court)
Mr J Hendy QC, Mr T Huckle & Mr R Leary (instructed by Messrs Wake Smith) appeared for Appellant.Mr R Owen QC (instructed by Messrs Weightmans) appeared for RespondentMr R Owen QC & Mr Stewart (instructed by Messrs Praxis Partners) appeared for Second Respondent.Mr Purchas QC & Ms C Foster (instructed by Messrs Reed Smith Richards Butler) appeared for Third Respondent.
Judgment
[1]This is a ticklish question of appeal case management which arises out of test litigation called The Nottinghamshire & Derbyshire Deafness Litigation. That litigation essentially raises the issue of whether textile employers in Nottinghamshire and Derbyshire should be held liable in respect of noise induced hearing loss (“NIHL”) suffered by employees arising out of their being subjected over a long term to industrial noise in their employment at a level above 85 db (A) leq but below the long established watershed of 90 db (A) leq. Although a group litigation order (“GLO”) was contemplated as one way forward in this litigation, ultimately the parties were agreed that the matter should be dealt with by means of test cases and that those test cases should all be heard together; that the evidence adduced in one should all be admissible and cross-admissible in all the others; and that effectively, even if not totally formally, the findings and liabilities established in one case should have a bearing not only across the test cases litigated but ultimately across the hundreds if not thousands -- there is some uncertainty about the total number -- of cases which were lying behind the test cases being litigated. So ten test cases were chosen of which, I think I am right in saying, three dropped out before the actual trial began, so that at the five-week trial which was ultimately heard by HHJ Inglis seven test cases against four separate defendants were litigated.[2]In the case of the claimant and now appellant Miss Baker her defendant was a company which at the start of her employment at any rate (which goes all the way back to 1971) was called Simpson Wright & Lowe Limited. That company had gone through a number of mergers and amalgamations and also changes of name and ultimately by the time of trial was called Taymil Limited, and is now called Quantum Clothing Limited (“Quantum”). Other defendants were a company called Meridian, which is the current name or successor to the well-known Courtaulds Group, and also a company called Pretty Polly. There was a fourth defendant, whom I need not identify.[3]The judge found that the claims in all seven test cases tried before him failed. Apart from other questions and important generic issues debated before the judge, the claimants’ difficulties were in showing that at a marginal excess over 85 db (A) leq and at a time when the claimants were getting on in years it could be proved to the satisfaction of a court that any hearing loss had been due to NIHL and had been caused by any breach of duty. Indeed only Mrs Baker succeeded in establishing that her fairly modest noise-induced hearing loss had been caused by her employment and the judge put a figure on her loss and damage at £5,000, an obiter judgment of his because he held that in the case of her employer, whom I have identified as now called Quantum, there was no question of any breach of duty until the time at the end of the 1980s when this country enacted the relevant 1989 regulations (taking effect at the beginning of 1990) in response to a 1986 directive of the European Community in relation to a new liability introduced by such legislation for noise at a level beginning at 85, at which point the legislation in question required protective apparatus to be provided.[4]So although Mrs Baker would have recovered £5,000 if she had been able to establish a breach of duty, by reason of the time at which the judge held that Quantum first began to be liable or would have begun to be liable for any failure to provide protective apparatus to deal with a noise level of more than 85 db (A) leq, Mrs Baker’s claim failed: there had been no breach of duty before, and protective apparatus was then provided. So far as Meridian and Pretty Polly were concerned, the judge dealt with those employers differently from the way in which he dealt with Quantum and the fourth employer, whom I have not named.[5]The judge said that so far as the great majority of textile employers -- or what he sometimes described as the average textile employer -- was concerned, there was no duty to provide protective apparatus to deal with the noise level of between 85 and 90 db (A) leq until the 1989 regulations came along. I am a little uncertain as to his precise date, but he did not particularly have to identify whether in those circumstances the duty would have begun at the time that the 1989 regulations came on the scene or only with their coming into effect at the beginning of 1990. However, in the case of Meridian and Pretty Polly the judge held that these were large employers who had actual knowledge which went beyond the knowledge of the great majority of employers or the average employer, and that in their case their duty to provide protective apparatus at a level between 85 and 90 db (A) leq came into effect at the very beginning of 1985: he allowed a lead-in period of some two years or so from the time following the promulgation of a 1982 draft directive of the EC Commission when certain consequential consultations and so forth ensued. That was a draft directive which was altered in its substance before the ultimate 1986 directive came on the scene.[6]So had a NIHL claim been established against Meridian and Pretty Polly, the judge would have measured the date and therefore the extent of their liability from the beginning of 1985. However, in the case of Quantum there would be no duty until the end of the decade.[7]Now those seven test cases which went to trial were all conducted by one set of solicitors, Messrs Wake Smith, and one set of counsel where Mr John Hendy QC led, and the litigation was financed, as we have been told, by a conditional fee arrangement supported by an after-the-event costs insurance policy which covered the claimants in general. Following the claimants’ lack of success at trial the judge made costs orders against the claimants. However, he limited their liability in the case of Meridian’s and Pretty Polly’s costs to only 90%, on the basis that those companies had failed on the ground of their actual additional knowledge to put back a time of liability to the late 1990s. The judge also had to consider whether to give permission to appeal to any party requesting appeal.[8]The only claimant to request permission to appeal on the merits was Mrs Baker, for reasons which may be obvious from the facts that I have already stated. He gave Mrs Baker permission to appeal, but he also contingently gave the other claimants permission to appeal against his 90% costs order on the basis that if Mrs Baker’s appeal succeeded in showing that a general date for liability for noise at 85 db (A) leq and above should be pushed back in time to an earlier period, then it may be (see paragraph 22 of his costs judgment) that either a greater percentage discount should be allowed on the costs that they should have to bear or possibly there should be no liability at all:
“because the claimants as a whole would have prevailed on important issues at the heart of this litigation.”
Those important issues he identified elsewhere in his costs judgment, for instance at paragraph 5, where he accepted that at the heart of the litigation in all the cases were two generic issues of importance to claimants and defendants in industrial deafness cases generally, and they were liability at common law for damage caused by exposure under 90 db (A) and liability under section 29 of the Factories Act 1961. He accepted that those were the main issues which had taken up time during the trial. He went on in paragraph 6 of that costs judgment to further illustrate that point.[9]Now on Mrs Baker’s appeal a notice of appeal has come forward and that notice of appeal and the skeleton argument which has been filed and served along with it indicate that Mrs Baker adopts a broad attack upon the judge’s judgment. The skeleton refers to the generic issues in the case, and asserts that the claimants won on those generic issues or at any rate won to a large extent, in particular against Meridian and Pretty Polly. The skeleton goes on to argue on a very broad level by reference to general jurisprudence that the judge had erred in his attitude to the facts before him both in respect of the Factories Act statutory duty and at common law. The submission on that appeal is therefore that the judge should have found that the knowledge in the industry -- that knowledge being both actual and/or constructive -- already by 1972 (which is the date of an important code of practice relating to NIHL) was such that liability and a duty in respect of exposure at 85 db (A) leq should be imposed upon employers generally, in addition to that liability at 90 db (A) leq which has commonly been dated to that date, at least in relation to that code of practice.[10]Thus at paragraph 23 the skeleton goes on to say that in any event the judge had no proper basis and gave none for exempting Quantum from a finding of actual knowledge because the evidence he had himself recounted in his judgment revealed, it is submitted, very similar actual knowledge to that of Meridian and Pretty Polly. The argument about constructive knowledge in the industry as a whole is said to be overwhelming (see paragraph 32 of the skeleton argument) and (at paragraph 38 of the skeleton argument) it is also submitted that Quantum was plainly a major employer in the industry in a similar position to Meridian and Pretty Polly and that as such a major employer its actual knowledge was to be inferred accordingly. And that, in any event, it should be fixed with constructive knowledge of the risk of injury at 85 db (A) leq well before 1983. As I said, Mrs Baker seeks to take it back to 1972.[11]It is also submitted that the judge was wrong to allow a two-year lead-in period from 1983 to the beginning of 1985, even if Mrs Baker was unsuccessful in pushing the date of liability back as far as 1972: on the basis that she would be right to submit that Quantum’s case should be analogised to that of Meridian and Pretty Polly, and that a 1983 date of knowledge should be adopted, then it is submitted there is no need for a further two years’ lead-in period before the duty and any breach of it ensued.[12]So that is the basic structure of Mrs Baker’s appeal. Now that appeal is to be financed, we are told, by the same underwriters as undertook the potential liability in costs in respect of all the claimants at trial. Indeed it has been made clear to us by Mr Hendy, who assisted us very greatly in his frank explanation of the practicalities behind this litigation, that the underwriters are concerned in Mrs Baker’s appeal not only of course to win for Mrs Baker the £5,000 she would receive if her appeal succeeded, but also to win for claimants generally a much wider range of potential liability against employers generally, and also to win for their own pockets as insurers a recoupment, as it would be hoped would ensue, on the contingent cost appeal which the judge has given permission for, should Mrs Baker’s appeal on the generic issues succeed. So although it is putting it perhaps too coarsely and too broadly, there is an element of “double or quits” so far as the practicalities of the costs liability in this litigation is concerned.[13]Now it is plain that the costs of this litigation have been very heavy indeed. I have mentioned Mrs Baker’s potential modest recovery of £5,000 as possibly waiting in the wings of her appeal, but the costs which have been expended on this litigation can be appreciated if I mention that Meridian’s own costs, as only one of the employer defendants, is put at some £1.3 million. I think, speaking from memory of the figures, that I have read in the papers the total costs involved in this litigation to date must run in the order of some £3 million or so, and the judge has already made some substantial orders in respect of interim payments, although nothing approaching that £3 million figure.[14]Now that is the background to applications which have been made by Meridian and Pretty Polly to join or be joined in Mrs Baker’s appeal as respondents. They rely upon the provisions of CPR Part 52.1(3)(e), which defines the meaning of respondent for the purposes of general rules about appeals. The rule provides:
“Respondent means – (i) A person other than the appellant who was a party to the proceedings in the lower court and who is affected by the appeal; and (ii) a person who is permitted by the appeal court to be a party to the appeal.” (i) A person other than the appellant who was a party to the proceedings in the lower court and who is affected by the appeal; and (ii) a person who is permitted by the appeal court to be a party to the appeal.”
[15]It is submitted by Mr Christopher Purchas QC on behalf of Meridian and by Mr Robert Owen QC on behalf of Pretty Polly that they are respondents within the meaning of sub-rule (e)(i). They were both parties to the proceedings in the lower court and they are affected by the appeal at least and at any rate so far as Mrs Baker’s appeal seeks to put back the date of liability against employers in general to 1972; alternatively to 1983 rather than to January 1985, which is the judge’s extant ruling against Meridian and Pretty Polly in the test cases outside those of that of Mrs Baker. To the extent that the point or points that Meridian and Pretty Polly wish to argue or be permitted to argue on the appeal as respondents go beyond the points already in issue between Mrs Baker and Quantum, Meridian and Pretty Polly submit that they should be in any event permitted under sub-rule (e)(ii) to be a party to the appeal.[16]Now in this connection there has been debate before us this afternoon that, to some extent at any rate, Meridian and Pretty Polly wish to raise an issue or issues that go beyond the scope of the existing appeal between Mrs Baker and Quantum. This is because Meridian wishes to argue on the appeal that the judge was wrong to fix them with actual knowledge of facts which bring their liability back to 1983/1985 and Pretty Polly wishes to argue essentially the same point, although its real interest is in ensuring that they have no liability after 1986, at which point they were in fact issuing protective apparatus to their employees. Therefore, they are to that extent wishing to go beyond the 1983/1985 finding, although on their behalf Mr Owen accepts that it may be that their 1986 point would not be a sufficient reason for them to join in if it were not for the danger of Mrs Baker’s appeal that their liability could be taken back to 1972 or alternatively to 1983.[17]Now the judge at critical points of his judgment (see paragraphs 56 and 66 and also paragraphs 61, 68 and 87 to 88 -- that is not his costs judgment but his main liability judgment) made certain findings of actual knowledge against Meridian and Pretty Polly and it may be that in the light of those findings the additional point or points that Meridian and Pretty Polly want to raise go beyond the scope of the existing Mrs Baker/Quantum appeal.[18]I have acknowledged that that is a real possibility, although I would also observe that in the light of the breadth of Mrs Baker’s appeal and the skeleton argument which has been filed on her behalf, it would be very difficult now to anticipate exactly to what degree or extent, if any, the argument of that appeal would stop short of a full examination of the background to the judge’s findings about Meridian and Pretty Polly’s actual knowledge. At any rate whatever might be or might turn out to be the extent of some extension of the existing appeal of Mrs Baker and Quantum, it is accepted by Mr Hendy on behalf of Mrs Baker and by Mr Robert Owen, who also appears on behalf of Quantum as well as on behalf of Pretty Polly, that, speaking on behalf of those parties, Mrs Baker and Quantum, there is no real desire by them to prevent Meridian and Pretty Polly from joining fully in the existing Mrs Baker/Quantum appeal: and when I say “fully”, I mean not only for the purposes of arguing the points raised on that appeal by the existing appellant and respondent but also the additional point or points which Meridian and Pretty Polly wish to argue by reference to the judge’s findings as to their actual knowledge at an earlier period. Mr Hendy accepts that against the background of this litigation as a whole every one has an interest after all this expenditure of costs in finding a solution at the level of the Court of Appeal to the issues which have been raised by the four parties before us this afternoon.[19]Speaking for myself, I fully understand that attitude. Moreover, in addition to the wide scope such as it is of Mrs Baker’s existing appeal, there also looms or lurks the contingent appeal of the test case claimants in general in respect of their costs and also a further prospective appeal which Meridian and Pretty Polly wish to raise, which is that the judge was in any event wrong to dock them 10% of their costs on the finding of actual knowledge because, they submit, he was wrong so to find.[20]In these circumstances I would readily accept that Meridian and Pretty Polly should be joined to the Mrs Baker/Quantum appeal as respondents, and that that is so whether such joinder is as of right under sub-rule (e)(i) or as a matter of permission under sub-rule (e)(ii). I suspect that the formal position is that their joinder is as of right as parties to the proceedings below who are affected by the appeal to the extent that they are affected, as they plainly are, by Mrs Baker’s appeal, and that it is as a matter of permission under sub-rule (e) (ii) insofar as the points that they wish to argue as respondents on the appeal might go further than the present scope of the Mrs Baker/Quantum appeal. I have already made the point that it is very difficult to identify here and now quite to what extent, if at all, in practice their points go further than the existing appeal.[21]The real issue which has been debated this afternoon between parties is whether a direction should be made here and now, a condition imposed upon the introduction of Meridian and Pretty Polly as respondents, in terms of the costs of the appeal. When the matter came before my Lady, Lady Justice Smith, on paper, my Lady considered that the right direction to make was one which limited the issues more strictly to those which arose on the Mrs Baker/Quantum appeal, and in any event to state here and now that Meridian and Pretty Polly would have to bear their own costs in the appeal whatever the result. It has been submitted by Mr Purchas and Mr Owen, nevertheless, that it would be unjust to anticipate the arguing and the outcome of the appeal. They submit that it would be unjust that they should be prevented here and now from recovering costs even though they might be entirely successful in the appeal, and that a practical view had to be taken of the responsibility for costs in this litigation in accordance with the information about that which I have referred to earlier in this judgment.[22]In truth the issues which are being debated are being debated not simply for the sake of Mrs Baker’s £5,000 but for the sake of all the potential claimants and defendants in this litigation, and this litigation will have an important outcome in this NIHL context beyond this litigation itself for other potential claimants and other potential defendants in other industries as well. Therefore, the justice of the matter is to accept that it will not be Mrs Baker who bears any potential liability but the underwriters, who have been in the saddle effectively of the conduct of this litigation as a whole throughout.[23]Mr Hendy, on the other hand, submits otherwise. He submits that it would be unfair to saddle the underwriters with potentially duplicate costs by the introduction of further respondents, especially as there is the possibility that their introduction will extend the scope of the appeal. It would extend it not only to matters which arise outside Mrs Baker’s personal case but also will probably extend the length of the appeal by a certain amount. Estimates as to that last factor differ. Mr Purchas accepts that it will be extended by half a day or so. Mr Hendy submits by two days. In any event, this is of an entirely different( order from the costs of gearing up for and hearing the five-week trial below. It seems to me ultimately, having listened to the submissions this afternoon, that this issue of costs is one that only the full Court of Appeal that hears the ultimate appeal will be able to judge. Only that court will really be able to judge the extent, if at all, to which the introduction of Meridian and Pretty Polly and their additional arguments really do extend Mrs Baker’s appeal. Only that court will know quite how the arguments lie down with one another or inter-relate. Only that court will be able to take a full, holistic and properly informed judgment on this issue.[24]We therefore accept, perhaps a little reluctantly but nevertheless full-heartedly in the end, that this question of costs must lie over to the full court that hears the appeal. We would only say this: that it is clear that the two clients whom Mr Owen represents, that is to say Quantum and Pretty Polly, see no conflict of interests in being represented by a single set of lawyers and team of counsel. It must ultimately be a question for the full court whether a duplicate representation in terms of solicitors and/or counsel which Meridian would seek to bring into the case is entirely justified. Apart from raising the question which I have done in this judgment, I would say nothing more about it, but at any rate the parties are on notice of that point having been raised.[25]At any rate, for the reasons which I have endeavoured to explain, I would accept and direct that Meridian and Pretty Polly be permitted to be respondents to Mrs Baker’s appeal in order to allow them not only to respond to Mrs Baker’s points but also to make their point about the judge’s findings of actual knowledge against them so as to bring forward the liability in their cases to 1983/1985, and I would leave over to the full court a decision of what the cost outcome of that appeal will be. I would also give permission, if permission is needed, to Meridian and Pretty Polly to issue the respondent’s notices which are before us dealing not only with the date of duty point but also with the 10% costs discount point. I would also suggest that the contingent appeals of the other claims on costs should all be heard at the same hearing, as it seems to me that it is the Court of Appeal on this appeal which will be in a position, and only that court would really be in a position, to deal with that contingent appeal for which permission has been granted.[26]Broadly speaking, I agree with everything that my Lord, Lord Justice Rix has just said. I would come to one caveat in a moment. First of all, let me make it plain that I agree that it is desirable that all issues in this test litigation should be resolved, insofar as they can be, within the context of an appeal brought by only one claimant, Mrs Baker, whose claim was brought against only one defendant, namely her employer, Quantum Clothing. I have never doubted that Meridian and Pretty Polly are entitled to be heard on the appeal. But during the argument I have expressed concern more than once that the issues which Meridian and Pretty Polly seek to raise will extend beyond those issues which properly arise in Mrs Baker’s appeal. The court has no jurisdiction to decide hypothetical points, however convenient it might be to the parties to the group litigation.[27]Whether the points that Meridian and Pretty Polly seek to pursue will in fact go beyond the Baker and Quantum appeal issues, I find it difficult to say after the short interlocutory hearing. I rather think they will, even though the Baker appeal issues are as my Lord, Lord Justice Rix has said, very wide. However, I am content to leave this problem to the full court. No doubt if the full court considers that Meridian and Pretty Polly or either of them are straying improperly into hypothetical issues, they will say so. I regret that this leaves the scope of the appeal somewhat uncertain but I do not think that this problem can be resolved at this hearing.[28]Turning to the question of costs, although when I considered Meridian’s application on paper, I directed that Meridian should be allowed to appear at the appeal and should be required to pay their own costs in any event, since hearing more fully what the funding arrangements are, I have been persuaded that the right course is, as my Lord, Lord Justice Rix has just said, to leave all questions of costs to the full court.[29]I confess that my Lord, Lord Justice Rix’s suggestion that the contingent appeals on costs should take place at the same time or immediately after the hearing of the main appeal took me somewhat by surprise and I cannot say that at the moment I agree with that. I would like to hear some further argument on it if the parties seek for that to happen.