Knight v Rochdale Healthcare NHS Trust & Ors [2003] EWHC 1831 (QB)

Case No HQ03X0037Neutral citation [2003] EWHC 1831
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Venue Royal Courts of Justice,, Strand, London WC2A 2LLDate 23 July 2003
Before
MR. JUSTICE CRANE
Between
MARTIN KNIGHTClaimantROCHDALE HEALTHCARE NHS TRUSTDefendant(2) THE NATIONAL HEALTH SERVICE LITIGATION AUTHORITYDefendant(3) THE SECRETARY OF STATE FOR HEALTHDefendant
Mr.George Thomas (instructed by the Legal Department, Medical Defence Union) appeared for Claimant.Mr.Angus McCullough (instructed by Capsticks) appeared for First and Second Defendants.
JUDGMENTGeneral
[1]In this action the Claimant, a consultant orthopaedic surgeon, seeks an indemnity in respect of his liability to a former patient, Mrs.Smettem-Minson. In previous proceedings she claimed damages for negligence from the Claimant. That action was settled for a figure of £700,000 plus costs.[2]The first application before me was an application by the Claimant for permission to amend the Particulars of Claim. By that amendment the claim against the third Defendant is abandoned. The claim for damages against the Second Defendant is abandoned. The other principal change is to plead a breach of contract by the First Defendant as an alternative to his claim under the Civil Liability (Contributions) Act 1978 ("the 1978 Act"). The Defendants neither consented to nor opposed the amendments. I gave permission, since the Claimant should be able to put his claim in the alternative way.[3]The second application was an application by the Defendants, supported by the Claimant, for an order that there be tried as a preliminary issue the question whether the claim under the 1978 Act is barred by the Limitation Act 1980 ("the 1980 Act"). Although the amendment of the Particulars of Claim would leave the Claimant with a claim not barred by the Limitation Act, the proposed issue is both important and eminently capable of separate resolution. I agreed with the parties that it should be tried as a preliminary issue and that I should try it forthwith, as both parties wished.[4]The third application was that of the Defendants to strike out the claim against the Second Defendants. I deal with that straight away.[5]The claim against the Second Defendants is now, as a result of the amendment, simply one for a declaration that the treatment of Mrs.Smettem-Minson fell within the category of treatment covered by the NHS Indemnity. Mr.George Thomas, Counsel for the Claimant, explained that the Claimant wished to establish for the future that the interpretation of the indemnity arrangements asserted by the Second Defendants was wrong. That would not offer any advantage to the Claimant in the present action, but would be of potential benefit to him and perhaps other consultants in connection with other claims. I accept the arguments of Mr.Angus McCullough, Counsel for the Defendants, in making this application. I agree that it is very difficult to discern a cause of action against the Second Defendants. Moreover, even if the court can in principle allow the action to continue and has a discretion to grant a declaration, I see no advantage to the Claimant, or indeed anyone else, in the Second Defendants remaining a party. They will in any event continue to handle the litigation on behalf of the First Defendants. The court will consider the availability of an indemnity in the circumstances of this case. In so far as the arrangements for the treatment of this patient were typical, the conclusions of the court will be available. To embody those conclusions in a declaration against the Second Defendants assists no one.[6]Subject to any submissions of Counsel as to the form of the order, I propose to strike out the statement of case as against the Second Defendants under CPR 3.4(2)(a) as disclosing no reasonable grounds for bringing a claim against the Second Defendants. The preliminary issue[7]An agreement to settle the original action was reached on 24 October 2000. A consent order was made, embodying the agreement, on 8 November 2000. The limitation period for claims under the 1978 is two years, by virtue of the Limitation Act 1980, section 10. The present claim was issued on 1 November 2002. It is therefore of crucial importance whether the limitation period runs from the date of the agreement or the date of the consent order.[8]The agreement was recorded in a letter from the Mrs.Smettem-Minson's solicitors, which read:
"The claimant accepts your offer of settlement of £700,000 plus costs. The Certificate of Total Benefits shows that there are no deductible benefits. We have this morning notified the Court, Counsel and witnesses that the action has been settled. We enclose a draft Consent Order, which is based on a lump sum payment of damages. In the event that our client would be interested in a Structured Settlement (the matter in respect of which we are not competent to advise her) would your clients be prepared to pay the whole or part of the damages in that way? We have arranged for our client to have independent advice and we await hearing from you further therefore."
[9]The offer is not before me and it is not suggested that it is necessary to look at it. The suggestion of a structured settlement went no further. The consent order read:
"CONSENT ORDER Upon reading the consent of Solicitors for the Claimant and Solicitors for the Defendant, it is hereby ordered, by consent as follows:- 1. That the Defendant do pay to the Claimant's solicitors, within 21 days, the figure of £700,000 in full settlement of the Claimant's claim for damages against the Defendant. 2. That in addition, the Defendant do pay the Claimant's costs, to be agreed or made the subject of a Detailed Assessment on the standard basis. 3. That there be Legal Aid Taxation of the Client's costs. 4. That upon payment of the above written sums the Defendant be discharged in respect of the Claimant's claim herein."
There follow the signatures of both solicitors. The order was duly initialled, presumably by the District Judge. It is not suggested that the order as submitted differed from the draft enclosed with the letter (which I have not seen), but in any event Mr.Thomas did not rely on any difference between the agreement as embodied in the letter and the precise terms of the Consent Order.[10]The history of the legislation is of interest.[11]The Limitation Act 1963, section 4(2), dealing with the time limit for contribution between tortfeasors, read: "For the purposes of this section the date on which a right to recover contribution in respect of any damage accrues to a tortfeasor (in this subsection referred to as "the relevant date") shall be ascertained as follows, that is to say -(a) if the tortfeasor is held liable in respect of that damage by a judgment given in any civil proceedings, or an award made on any arbitration, the relevant date shall be the date on which the judgment is given, or the date of the award, as the case may be;(b) if, in any case not falling within the preceding paragraph, the tortfeasor admits liability in favour of one or more persons in respect of that damage, the relevant date shall be the earliest date on which the amount to be paid by him in discharge of that liability is agreed by or on behalf of the tortfeasor and that person, or each of those persons, as the case may be; and for the purposes of this subsection no account shall be taken of any judgment or award given or made on appeal in so far as it varies the amount of damages awarded against the tortfeasor".[12]The 1978 Act made new provision for contribution "from any person liable in respect of the same damage" (section 1(1)). Section 1 provided for liability arising from an agreement and for liability arising from a judgment, in the following terms: "(4) A person who has made or agreed to make any payment in bona fide settlement or compromise of any claim made against him in respect of any damage (including a payment into court which has been accepted) shall be entitled to recover contribution in accordance with this section without regard to whether or not he himself is or ever was liable in respect of that damage, provided, however, that he would have been liable assuming that the factual basis of the claim against him could be established. (5) A judgment given in any action brought in any part of the United Kingdom by or on behalf of the person who suffered the damage in question against any person from whom contribution is sought under this section shall be conclusive in the proceedings for contribution as to any issue determined by the judgment in favour of the person from whom the contribution is sought".[13]Mr.Thomas accepted that the inclusion of the word "determined" in subsection (5) implies a decision of a court. Thus a judgment entered by consent would not be within subsection (5). Although at first sight there would be as much reason for such a judgment to be conclusive as there would be for a judgment resulting from a court's decision, it is understandable that cases of consent should fall within subsection (4) because of the requirement in that subsection of bona fides.[14]Schedule 1, paragraph 6, substituted a new section 4 for section 4 of the 1963 Act. The new section 4 was in most respects identical for present purposes with section 10 of the 1980 Act.[15]Section 10 of the 1980 Act is headed "Special time limit for claiming contribution". It reads as follows (and the underlining of the most important words is mine):
"(1) Where under section 1 of the Civil Liability (Contribution) Act 1978 any person becomes entitled to recover contribution in respect of any damage from any other person, no action to recover contribution by virtue of that right shall be brought after the expiration of two years from the date on which that right accrued. (2) For the purposes of this section the date on which a right to recover contribution in respect of any damage accrues to any person (referred to in this section as "the relevant date") shall be ascertained as provided in subsections (3) and (4) below. (3) If the person in question is held liable in respect of that damage - (a) by a judgment given in any civil proceedings; or (b) by an award on any arbitration; the relevant date shall be the date on which the judgment is given, or the date of the award (as the case may be). For the purposes of this subsection no account shall be taken of any judgment or award given or made on appeal in so far as it varies the amount of damages awarded against the person in question. (4) If, in any case not within subsection (3) above, the person in question makes or agrees to make any payment to one or more persons in compensation for that damage (whether he admits any liability in respect of the damage or not), the relevant date shall be the earliest date on which the amount to be paid by him is agreed between him (or his representative) and the person (or each of the persons, as the case may be) to whom the payment is to be made". (5) An action to recover contribution shall be one to which sections 28, 32 and 35 of this Act apply, but otherwise Parts II and III of this Act (except sections 34, 37, and 38) shall not apply for the purposes of this section."
[16]Mr.McCullough submitted that this consent order was not a "judgment" within the meaning of subsection (3). Mr.Thomas submitted the contrary. I shall return to this issue.[17]Mr.McCullough also relied on wording within the section. He pointed out that subsection (1) speaks of a person becoming entitled and both subsections (1) and (2) speak of the right accruing. He submitted that this requires the court to concentrate on the first moment that the right accrues. He relied particularly on the words "held liable" and "a judgment given" as suggesting a decision of a court. Although he conceded that a default judgment might fall within the subsection, such a judgment would rest not on the consent of the parties, but on a conclusion of the court, albeit one based on a failure by one party to comply with the rules. The same may well apply in my view to a judgment entered under CPR 14.4. Although the reference to an award does not include equivalent words to "a judgment given", the words "held liable" apply to awards.[18]Mr.Thomas relied particularly on the words in subsection (4) "in any case not within subsection (3) above". He argued that the court must ask itself whether there was an agreement within the remainder of subsection (4). If there was, the court must ask itself whether the case is nevertheless one that falls within subsection (3); if it does, the case is taken out of subsection (4). Mr.McCullough submitted that the initial words of subsection (4) simply means "in all other cases".[19]I must consider first whether this was a "judgment" within the meaning of section 10(3). I was referred to paragraph 42/1/5 of the Supreme Court Practice 1979 and the equivalent passage in the current White Book 2003 at paragraph 40.1.1. In both those paragraphs the suggestion appears to be made that even by about 1890 it was doubtful whether there was still a distinction between a judgment and an order. However, the judgment of Lord Esher MR in Onslow v. Commissioners of Inland Revenue (1890) 25 QBD 465 seems to me to maintain the distinction. In the recent White Book, it is stated that the definitions in the Supreme Court Act 1981 and the County Courts Act 1984 tended to maintain the distinction, but the actual definitions do not appear to do so. It is true, however, that the RSC maintained the distinction, although not entirely systematically, and that the different words have been carried over into the CPR. I accept that this has been done "apparently unthinkingly", as the White Book suggests.[20]I was referred to Stroud's Judicial Dictionary of Words and Phrases (6th edition) and to Words and Phrases Legally Defined (3rd edition), but it was not suggested that the relevant entries are of much assistance. Neither counsel referred me to any authority or textbook, apart from these and the passages in the editions of the White Book.[21]One important reason for distinguishing a judgment from an order disappeared when the definition of "judgment" for the purposes of enforcement came to include "any judgment or order": see Administration of Justice Act 1920, section 12(1). However, that definition does not assist the Claimant here, precisely because it was inserted to ensure that the problem was circumvented.[22]I accept that in 1978, when the section from which the present section 10 was derived was passed, a "judgment" in such an Act would not necessarily include any court order. The use of the word, especially in conjunction with the words "held liable" and "given", clearly points to the kind of order by which liability is imposed. However, that conclusion does not dispose of the matter because it is accepted by both counsel that the description "consent order" is not necessarily conclusive. In other words, if this was in reality a "judgment", it would not cease to be so by calling it an "order". Although a consent order in the form used here is the usual form in such circumstances, the parties could have agreed that judgment be entered by consent and so drafted the document placed before the court. In my view this consent order, a final order in the litigation, could properly be described as a "judgment" for the purposes of subsection (3).[23]Thus while I place some weight on the words "held liable" and "given" I do not, for the reasons I have given, regard the use of the word "judgment" as in itself conclusive. At one stage of the hearing I was impressed by the argument based on the words "in any case not within subsection (3) above" and not wholly convinced by Mr.McCullough's suggested meaning, since that suggestion seemed to give rise to the same problem. If subsections (3) and (4) are mutually exclusive, there seems to be little need for the words "in any case not within subsection (3) above".[24]However, in the end I prefer Mr.McCullough's interpretation of section 10. My principal reason for doing so is if a firm agreement is made, as here, time undoubtedly starts to run at that moment. It would be different if the agreement required the making of a consent order before it took effect. Neither party so contends here. Although Parliament could have decided that a consent order should restart the clock, there are insufficiently clear words to indicate that. Indeed the words in subsection (1) "Where ... any person becomes entitled" and the words in subsection (4) "the earliest date on which the amount ... is agreed" suggest that the crucial moment is the first moment when liability arises. It is tidy to conclude that subsections (3) and (4) deal separately with cases decided by a court (or arbitrator) and cases of agreement.[25]This conclusion produces the result that in most circumstances the contrast between subsections (4) and (5) of section 1 of the 1978 Act is mirrored in what are now subsections (3) and (4) of section 10.[26]My conclusion on the preliminary issue is that the relevant date for any liability under the 1978 Act was the date of the agreement on 24 October 2000. I invite agreement or submissions from counsel as to the form of the orders required.

Cited in 3 later judgments