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	England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> McDermott v Inhealth Ltd [2018] EWHC 1835 (QB) (19 July 2018) URL: http://www.bailii.org/ew/cases/EWHC/QB/2018/1835.html Cite as: [2018] EWHC 1835 (QB)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Civil Justice Centre 33 Bull Street Birmingham B4 6DS
		19/07/2018

Mr Justice Lavender:

(1) Introduction

1. This judgment follows a rolled-up hearing of both an application for permission to appeal against a costs order made by District Judge Salmon in the Birmingham District Registry on 1 September 2017 and the substantive appeal. This is a personal injury action brought by Darren Richard McDermott. I will refer to him as the Claimant. The costs order was made after:

(1) The Second Defendant, InHealth Limited, submitted to judgment.

(2) The Claimant discontinued his claim against the Third Defendant, University Hospitals Birmingham NHS Foundation Trust, the Claimant and the Third Defendant having agreed that there should be no order for costs as between the two of them.

(3) The Claimant discontinued his claim against the First Defendant, Ivan Moseley, a consultant neuroradiologist.

2. So far as the costs of the action are concerned, the district judge ordered by paragraphs 1 and 2 of his order that:

(1) The Claimant should pay the First Defendant's costs of the action. This aspect of the order is not challenged.

(2) The Second Defendant should pay:

(a) the costs which the Claimant was liable to pay to the First Defendant; and

(b) the Claimant's own non-generic costs of his action against the First and Third Defendants,

but only in respect of the period after 1 December 2016.

3. The Claimant contends that this aspect of the order should not be subject to any such time limit and that the district judge should have ordered the Second Defendant to pay all of the Claimant's non-generic costs of its action against the First and Third Defendants and all of the costs which the Claimant was liable to pay to the First Defendant.
4. The Claimant originally advanced an alternative ground of appeal, namely that, if there was to be a limited cost order, it should have started from earlier than 1 December 2016. That ground of appeal is no longer pursued.
5. Paragraphs 3 and 4 of the district judge's order dealt with the costs of an application made by the Claimant, which was one of a number of applications made by an application notice dated 15 May 2017. I will refer to this as "the Application". After some discussion, the parties helpfully agreed that:

(1) If I refuse the principal appeal, paragraphs 3 and 4 of the order should stand.

(2) If I allow the principal appeal, paragraphs 3 and 4 of the order should be replaced by orders that Second Defendant bear 100% of the relevant costs.

(2) Background

6. The background to this litigation is as follows. The Claimant was an accomplished professional boxer. Unbeknown to him, he had an aneurysm in his brain. If this had been known, his annual licence to box would not have been renewed, for his own safety. He was required by the British Boxing Board of Control to undergo annual brain imaging as a condition of the renewal of his licence. He did this in March 2010. The imaging was arranged by the Second Defendant, which then operated the London Imaging Centre. The imaging was carried out by the Third Defendant. The resulting scan images were to be sent to the Second Defendant and provided by the Second Defendant to the First Defendant, who was to review them.
7. This process took place pursuant to a protocol, which was devised by the Second Defendant. Dr Chandrashekar Hirjibhai Thakkar was the Second Defendant's clinical lead for neuroradiology. He was responsible for ensuring that the protocol was appropriate. The protocol did not require what is known is an axial gradient echo or "GE" scan. That is the type of scan which would have revealed the existence of the Claimant's aneurysm.
8. Nevertheless, the Third Defendant did conduct a GE scan. The GE scan images showed the aneurysm, but the First Defendant did not report the existence of the aneurysm. There was an unresolved issue whether this was because the Third Defendant did not send the GE scan images to the Second Defendant, the Second Defendant did not provide the GE scan images to the First Defendant or the First Defendant did not identify the aneurysm from the GE scan images.
9. The Claimant continued with his boxing career. In August 2010 he received a blow to the head whilst sparring. This caused the aneurysm to bleed, resulting in brain damage and significant cognitive deficits. The amount of his damages has now been agreed.
10. The Second Defendant sold the London Imaging Centre in March 2012. This affected its access to documents when responding to the Claimant's claim.

(3) The Litigation

11. The Claimant's solicitors corresponded with each of the Defendants before commencing proceedings. In particular, the Claimant's solicitors sent a letter of claim to the Second Defendant's insurers on 29 May 2013. They alleged breach of duty on the basis that the First Defendant failed to identify the aneurism from the GE scan images. (At that stage it was not appreciated that the First Defendant would say that he had not received the GE scan images.) The insurers replied as follows on 24 June 2013:

"Investigations indicate the alleged failure to diagnose an aneurysm during your client's annual boxing licensing scan in March 2010 is a matter for the consultant neuroradiologist, Dr I Moseley or his professional liability insurers The Medical Defence Union Ltd.

Please confirm by 'open' letter no further action will be taken by your client against InHealth Group Ltd and/or any companies in the InHealth Group."

12. Mr Smith submitted that this letter did not involve the Second Defendant blaming the First Defendant, but merely redirecting the claim. Whether one calls it blame or not, the Second Defendant was saying that, if anyone was liable, it was the First Defendant.
13. The Claimant commenced proceedings by issuing a Claim Form on 27 August 2013. The only defendant was the First Defendant. On 17 March 2014 the court gave permission to the Claimant to amend the Claim Form so as to add the Second and Third Defendants. On a number of occasions in 2014 the Claimant proposed a round table meeting between all four parties. This did not take place.
14. The Claimant served Particulars of Claim on 19 December 2014. The Claimant made a number of allegations of negligence, all of which were said to have resulted in his brain injury:

(1) The Claimant made what has been referred to as the protocol claim against the Second Defendant. This was an allegation that the Second Defendant was negligent in the design of the protocol, in that the protocol ought always to have included a requirement for a GE scan.

(2) The Claimant also made what has been referred to as the scans claim. This consisted of allegations that:

(a) the Third Defendant was negligent in not sending the GE scan images to the Second Defendant (and the Second Defendant was vicariously liable for the negligence of the Third Defendant); alternatively

(b) the Second Defendant was negligent in not providing the GE scan images to the First Defendant; alternatively

(c) the First Defendant was negligent in failing to identify the aneurysm from the GE scan images (and the Second Defendant was vicariously liable for the negligence of the First Defendant).

15. I note at this stage that the Claimant acted reasonably in suing all three Defendants. The district judge made no finding to the contrary. Mr Smith sought to argue that the Claimant acted unreasonably, but I am not persuaded. The Claimant was not responsible for the complexities of the situation which he faced. The Claimant had not been advised of his aneurysm, there were three potential defendants and no defendant was admitting liability, nor was there to be any admission of liability for over two years after the Particulars of Claim were served.
16. The Defendants each served defences in July 2015 denying liability. In particular:

(1) The Third Defendant alleged

(a) that it sent the GE scan images to the Second Defendant; alternatively

(b) that it did not owe any duty of care in relation to the GE scan images because it had not been engaged to undertake a GE scan.

(2) The Second Defendant:

(a) denied that the GE scan images were sent to it; alternatively,

(b) alleged that, if it had received them, it would have provided them to the First Defendant; and

(c) alleged that any duty of care which it owed was limited to complying with the protocol.

(3) The First Defendant denied that he owed the Claimant a duty of care and also contended that:

(a) the GE scan images were not sent to him; alternatively

(b) if they had been, he would not have reviewed them, and would not have been under a duty to review them, because this was not required by the protocol.

17. Mr Smith accepted that the Second Defendant was blaming the Third Defendant, but asserted that the Second Defendant was not blaming the First Defendant, since the Second Defendant's primary case was that it, and therefore the First Defendant, did not receive the GE scan images. On the other hand, the Second Defendant's alternative case was that, if it did receive the GE scan images, it provided them to the First Defendant. As will be seen, the Second Defendant subsequently proposed to adduce expert evidence that, if the First Defendant received the GE scan images, he ought to have identified the aneurysm.
18. It is also relevant to note that both the First and Third Defendants relied on the limited scope of the protocol as limiting the scope of any duty which they owed to the Claimant.
19. On 14 December 2015 the Second Defendant applied for permission to bring a Part 20 Claim against Dr Thakkar. However, that application was not heard, as Dr Thakkar, who was insured by the Medical Protection Society Limited, agreed to indemnify the Second Defendant in respect of the protocol claim. An indemnity agreement was executed on 2 March 2016.
20. Mr Pease of the Second Defendant's solicitors says as follows in paragraph 9 of his witness statement dated 18 June 2018 prepared for this appeal:

"As the Defendants all denied liability on the scans claim, there was no agreement as to the apportionment of liability for the Claimant's damages and costs between the protocol claim and the scans claim. The MPS and Dr Thakkar were unwilling to pay 100% of the Claimant's damages and costs because there were two distinct claims and they were only responsible for D2's liability to the Claimant on the protocol claim. The scans claim (for which the MPS/Dr Thakkar had no liability) independently caused the Claimant's loss. Therefore, causation would need to be apportioned between the protocol claim and the scans claim."

21. On 25 August 2016 the Third Defendant made a Part 36 offer to contribute one third towards the Claimant's damages and costs, while bearing its own costs.
22. On 10 October 2016 the First Defendant made a "drop hands" settlement offer to the Second Defendant. The Second Defendant did not accept this offer within a reasonable time and it lapsed.
23. The Second Defendant instructed a radiologist, Dr Norman S McConachie, and served his report on 14 October 2016. In paragraph 5.6 of his report, he expressed the opinion (having been instructed to address the issue) that the First Defendant was negligent if he was sent the GE scan and did not look at it. The Second Defendant was seeking to blame the First Defendant if (contrary to the Second Defendant's primary case) he saw the GE scan images.
24. In paragraph 5.12 of his report, he stated as follows:

"I do not know how much, if any, contact Dr Thakkar had with the medical advisors at the BBBC. It should be recognised that screening boxers for the purpose of an annual scan for re-licensing by the BBBC is a very different setting than scanning a patient who has, for example, cognitive problems following a head injury. Scanning protocols should be determined by the requirements of the re-licensing process and the need to detect specific abnormalities as defined by the medical advisers to the BBBC. If one of the abnormalities that would exclude a boxer from obtaining a license was evidence of previous brain haemorrhage or microhaemorrhages then no responsible body of Neuroradiologists designing a protocol for screening boxers should have omitted to include a T2*W GE or SWI sequence in 2010, in my opinion."

25. On 16 March 2017 Dr McConachie provided answers to the Claimant's questions arising out of this aspect of his report. Meanwhile on 15 March 2017 the Claimant made an application for summary judgment against the Second Defendant on the protocol claim.
26. On 17 March 2017 the Second Defendant accepted the Third Defendant's Part 36 offer made on 25 August 2016. The Second Defendant agreed with Dr Thakkar that he would contribute 50% of the Claimant's damages and costs. That left the Second Defendant to bear one sixth of the Claimant's damages and costs. On 20 April 2017 the Claimant purported to accept the First Defendant's settlement offer, but, as the district judge was to find, the offer had lapsed.
27. On 26 April 2017 the Second Defendant's solicitors wrote to indicate that the Second Defendant would submit to judgment on the protocol claim. On 18 May 2017 judgment was given against the Second Defendant by consent on the protocol claim. As there was no longer any practical benefit from pursuing the Claimant's claims against the First and Third Defendants, on 18 May 2017 the Claimant discontinued his claim against the Third Defendant with, as they had agreed, no order as to costs.
28. The District Judge adjourned further consideration of costs until 18 June 2017. He ordered the Second Defendant to file and serve a witness statement giving disclosure of any contribution arrangements or agreements between the Defendants. Mr Pease made a witness statement dated 20 June 2017. This disclosed the existence of the agreements that Dr Thakkar and the Third Defendant would contribute to the Second Defendant's liability for the Claimants' damages costs. I will refer to these as the compromise agreement.
29. In his judgment, the district judge made what was in effect a limited Bullock order. He ordered the Second Defendant to pay the costs which the Claimant was liable to pay to the First Defendant, and the Claimants' own non-generic costs of its action against the First and Third Defendants, but only in respect of the period after 1 December 2016. His basis for doing so was his finding that it was unreasonable for the Second Defendant not to admit liability for the protocol claim by 1 December 2016, having obtained and considered Dr McConachie's report.
30. In giving his reasons, the district judge:

(1) referred (in paragraphs 55 to 57 of his judgment) to CPR 44.2(1) and to the authorities cited to him, summarising the principles as set out by Peter Gibson LJ in Irvine v Commissioner of Police for the Metropolis [2005] EWCA Civ 129;

(2) found (in paragraph 58) that the protocol claim was a free-standing claim;

(3) rejected (in paragraphs 61 to 70) Mr Weitzman's submission that the terms of the compromise agreement meant that the Claimant had in reality succeeded on the scans claim against the Second and Third Defendants; and

(4) decided (in paragraphs 71 to 81) that the Second Defendant ought to have admitted liability sooner and that he would make his order on that basis.

31. I am not persuaded that the district judge was wrong to reject the submission made on the basis of the compromise agreement. The Claimant had not obtained judgment against any defendant on the scans claim. The fact that the Second and Third Defendants agreed to contribute one third and one sixth of the damages and costs recovered by the Claimant did not involve any acknowledgment of liability by them.
32. One aspect of the compromise agreement which was potentially relevant, but which does not appear to have been raised before, and was not expressly considered by, the district judge, is that the liability for any costs which the Second Defendant might be ordered to pay would be apportioned between the Second and Third Defendants and Dr Thakkar in the proportion of one sixth, one third and one half respectively. This meant that the Second Defendant would only pay one sixth of any costs which it was ordered to pay the Claimant. That was relevant when assessing any potential injustice to the Second Defendant. The district judge said (in paragraph 69 of his order) that the costs order sought would cause injustice to the Second Defendant, but he did not explain the reasons for that finding.
33. The district judge's primary reason for refusing to make the order sought by the Claimant was set out as follows in paragraphs 57 and 58 of his judgment:

"57. … The order is usually designed where different Defendants are pursued in the alternative. It is possible to make Bullock and Sanderson Orders where there are separate claims made against different Defendants, but this is not the ordinary case. However, such orders are not normally appropriate where the Claimant is alleging independent causes of action against two Defendants and where the breaches of duty are in no way connected with each other. The Claimant accepts that the judgment it has obtained against the Second Defendant is on the primary protocol claim only.

58. This was a free-standing claim against the Second Defendant in its own right. Its resolution was not dependent on the outcome of the factual disputes on the secondary claim where all the Defendants blamed each other for the fact that the GE scan was not reported on. It is not the classic Bullock and Sanderson case and is more akin to the situation that arose in Mulready v Bell [1953] 2 WLR 215, cited in Irvine op cit, where the Second Defendant succeeded on independent cause of action that was not, in law or fact, connected with the untried secondary allegation against the other Defendant."

34. Pursuant to CPR 52.20(1), this appeal is limited to a review of the decision of the lower court. Pursuant to CPR 52.20(3), this appeal should only be allowed if the decision of the lower court was either wrong or unjust because of a serious procedural or other irregularity in the proceedings in the lower court.
35. This case concerns an appeal against the judge's exercise of his discretion in relation to costs. The Claimant accepted, by reference to the judgment of Sir Murray Stuart-Smith in Adamson v Halifax Plc [2003] 1 WLR 60, that before the court can interfere it must be shown that the judge has either erred in principle in his approach, or has left out of account, or taken into account, some feature that he should, or should not, have considered, or that his decision is wholly wrong because the court is forced to the conclusion that he has not balanced the various factors fairly in the scale.
36. Factors relevant to the court's discretion as to costs are set out in CPR 44.2(2) and (4). In cases where there are two or more defendants, the Court can order that one defendant bear another defendant's costs, by means of a Bullock or Sanderson order. The law relating to Bullock orders was considered by the Court of Appeal in Irvine. The overarching principle was stated as follows by Peter Gibson LJ:

"… The jurisdiction is a useful one. It is designed to avoid the injustice that when a claimant does not know which of two or more defendants should be sued for a wrong done to the claimant, he can join those whom it is reasonable to join and avoid having what he recovers in damages from the unsuccessful defendant eroded or eliminated by the order for costs against the claimant in respect of his action against the successful defendant or defendants. However, it must also be recognised that it is a strong order, capable of working injustice to the defendant against whom the claim has succeeded, to be made liable not only for the claimant's costs of the action against that defendant, but also the costs of the other defendants whom the claimant has chosen to join but against whom the claimant has failed."

37. Relevant considerations include:

(1) The reasonableness of the Claimant's conduct.

(2) Whether the parties are blaming one another.

(3) Whether the claims against the different defendants are alternatives to one another.

(4) Whether the claims against the different defendants are independent.

38. I have already dealt with the reasonableness of the Claimant's conduct. It was reasonable for him to bring claims against all three Defendants, and it was reasonable for him to discontinue his claims against the First and Third Defendants once he received an admission of liability from the Second Defendant.
39. As for blame, it is not a necessary condition for a Bullock order that the defendants were blaming one another: see Besterman v British Motor Cab Co Ltd [1914] 3 KB 181. But it remains a relevant consideration: see Irvine at paragraph 31. In the present case:

(1) It is acknowledged that the Second Defendant was blaming the Third Defendant. The Second Defendant was also saying that, if the GE scan images were sent to it by the Third Defendant, they were provided to the First Defendant and the First Defendant was responsible for the fact that he did not review them.

(2) The First and Third Defendants, while not expressly blaming the Second Defendant for the design of the protocol, sought to rely on the protocol as excusing them from liability to the Claimant.

40. As for the question whether there were alternative claims, what Peter Gibson LJ said in paragraphs 24 to 26 of his judgment in Irvine has to be seen the context that, in a case such as Besterman, where the Claimant was injured in a collision between a taxi and a bus, one possible outcome is that both the taxi and the bus were being driven negligently. If that was the conclusion reached after a trial, a Bullock order would probably be unnecessary, since the Claimant would have succeeded against both defendants. But if one defendant admits liability before trial, the possibility that his co-defendant might also have been liable is not an automatic bar to the making of a Bullock order. See also paragraph 39 of Waller LJ's judgment in Moon v Garrett [2006] EWDA Civ 1121.
41. As for the independence of different claims, Peter Gibson LJ referred in paragraphs 27 to 29 of his judgment in Irvine to the decision of the Court of Appeal in Mulready v JH & W Bell Ltd [1953] 2 All ER 215. He summarised the facts of Mulready as follows:

"In Mulready v JH & W Bell Ltd [1953] 2 All ER 215, the first defendant had contracted with the second defendant to construct a factory for the second defendant. The first defendant employed a sub-contractor to do part of the work. The plaintiff, an employee of the sub-contractor, fell from the factory roof, sustaining serious injury. He successfully sued the first defendant for breach of duty under the Building Regulations for failing to take suitable precautions to prevent him falling. He unsuccessfully sued the second defendant for breach of duty under the Factories Act in failing to provide means to ensure his safety while working on the roof. The trial judge, Pearson J, made a Bullock order. This court set that order aside because the causes of action against the defendants were different and depended on different facts."

42. In Mulready, Lord Goddard said as follows:

"A Bullock order is appropriate where a plaintiff is in doubt as to which of two persons is responsible for the act or acts of negligence which caused his injury, the most common instance being, of course, where a third person is injured in a collision between two vehicles and where the accident is, therefore, caused by the negligence of one or the other, or both. It does not appear to us that it is an appropriate order to make where a plaintiff is alleging perfectly independent causes of action against two defendants where the breaches of duty alleged are in no way connected the one with the other."

43. Mr Smith submitted that the district judge was right to find that the protocol claim was an independent cause of action in this sense. He submitted that the protocol claim would have been available to the Claimant whether or not the Third Defendant took the GE scans, that it did not arise out of the same facts as the scans claim and that it was unaffected by the factual dispute as to what became of the GE scan images.
44. In my judgment, however, the protocol claim and the scans claim were not, in Lord Goddard's words, "perfectly independent causes of action against two defendants where the breaches of duty alleged are in no way connected the one with the other." A number of factors indicate that the two claims were sufficiently linked to make a Bullock order appropriate:

(1) The Second Defendant was a defendant to both claims. It was responsible both for the protocol and for arranging the Claimant's scans.

(2) Both claims concerned the allegation that one or other of the Defendants was responsible for the fact that the Claimant's aneurysm was not identified by means of a GE scan.

(3) The protocol was relied on by the First and Third Defendants in their defence to the scans claim.

(4) In resisting both claims, the Second Defendant sought to blame the other two Defendants.

45. It follows that the district judge was wrong to treat the protocol claim as an independent claim in the Mulready sense. Looking at the matter afresh, it seems to me appropriate to order that the Second Defendant pay all of the costs which the Claimant was liable to pay to the First Defendant and all of the Claimant's own non-generic costs of his action against the First and Third Defendants. The Claimant acted reasonably in suing these three defendants, who were blaming one another, and it would not be unjust to order the Second Defendant to bear costs which were reasonably incurred in consequence of the Second Defendant's negligence. Accordingly, I grant permission to appeal and allow the appeal.