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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Morrison v British Broadcasting Corporation [2007] ScotCS CSOH_06 (16 January 2007) URL: https://www.bailii.org/scot/cases/ScotCS/2007/CSOH_06.html Cite as: [2007] ScotCS CSOH_6, [2007] ScotCS CSOH_06, [2007] CSOH 06 |
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OUTER HOUSE, COURT OF SESSION [2007] CSOH 06 |
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PD1106/06 |
OPINION OF LORD EMSLIE in the cause DAVID MORRISON Pursuer; against BRITISH BROADCASTING CORPORATION Defenders: |
Pursuer:
Hawthorne; Digby Brown
Defenders: R G Milligan;
Simpson & Marwick, WS
Submissions
[2] Put shortly, the defenders'
position is that the raising of this action in June 2006 was precipitate and
unnecessary where (i) liability was not in issue; (ii) the defenders were demonstrably keen to
negotiate an early settlement of the claim;
but (iii) the pursuer had persistently failed to provide the defenders
with details of his loss of earnings for that purpose. Describing the action as a "costs-building
exercise", counsel submitted that his clients should not merely be relieved of
any liability to meet the pursuer's expenses, but that the whole expenses of
process to date should be awarded in their favour. Failing such an award in favour of the
defenders, counsel submitted that there should be a finding of no expenses to
or by either party, which failing that the Court should, in its discretion,
substantially modify any liability in expenses which the defenders might have
towards the pursuer.
[3] As illustrated by recent decisions of the Inner House in McKenzie v H D Fraser & Sons 1990 SC 311 and Brackencroft Ltd v Silvers Marine Ltd 2006 CSIH 2, it was well settled that the conventional (and ex facie unqualified) offer of expenses in a Minute of Tender carried only such expenses as the court might deem appropriate in the circumstances. A tenderer's liability might, for example, be enhanced by the award of an additional fee, or conversely modified or restricted by reference to the other party's unreasonable conduct at some stage. In the latter context the court might, at its discretion, order expenses to be taxed on a lower scale, or otherwise modified to a specified fraction of the total. In Crombie v British Transport Commission 1961 SLT 115, the pursuer's action of damages was raised without any prior intimation of his claim. The defenders averred this in their defences, and immediately lodged a purported tender of "£500 in full of the conclusions of the Summons". When that offer was accepted by the pursuer, both parties moved for the whole expenses of the action. Following an analogous decision of the First Division in Gunn v Hunter 1886 13R 573, the Lord Ordinary awarded the defenders their expenses, holding that the action had been unnecessary and that an intimated claim would in all probability have been settled on the same basis without any need for litigation. In counsel's submission, that case was correctly decided, and showed how the court should approach the matter of expenses in similar circumstances.
"I note your intention to commence proceedings. I consider this to be a costs building exercise and I reserve the right to bring this letter to thee (sic) attention of the court when the question of your costs arises."
Even after the action was raised,
the pursuer's earnings details were still not made available until after the
end of August 2006. However, as soon as
they were in a position to do so, the defenders took steps to settle the
claim. They had, it was said, acted
reasonably throughout, and should incur no liability for the expenses of an
action which should never have been raised.
Failing that, the pursuer's entitlement to expenses should be restricted
to the
[5] In reply, counsel for the pursuer accepted that, as a matter of law, the expenses carried by the defenders' tender were those which the court, in its discretion, might regard as appropriate. In present circumstances, however, the pursuer's entitlement to expenses should be affirmed without modification. As was clear from the parties' correspondence, the action had been raised in good faith at a time when, despite a formal ultimatum in May 2006, no offer of settlement was forthcoming from the defenders. In any event, loss of earnings formed only a small part of the claim, and vouching of that element was reasonably delayed because of the pursuer's self-employed status.
[6] More importantly, causation of the pursuer's accident had never been conceded on the defenders' behalf, and the action once raised had been met with a full defence on both merits and quantum. It could not therefore be said that the raising of proceedings in such circumstances was unreasonable. Moreover, following efforts by the defenders in August 2006 to recover details of the pursuer's loss of earnings, a Statement of Value of Claim was submitted to the defenders' agents together with a note of adjustments giving further specification on the earnings-loss issue. Despite these developments, however, the action did not settle until approximately three months later. Significantly, the final Minute of Tender was preceded by (i) an extra-judicial offer from the defenders' claims adjusters dated 13 June 2006, proposing settlement of the claim "... in the sum of £5,500 together with your reasonable expenses and disbursements"; (ii) an earlier tender lodged by the defenders on 11 August 2006, offering "£5,500... together with the expenses of process to date in full of the conclusions of the summons"; (iii) a counter proposal by the pursuer on 29 August 2006, offering to settle at "£7,000 ... plus expenses", and (iv) the defenders' offer on 18 October 2006 of "... the global sum of £10,000, strictly inclusive of costs...". Against that background, the pursuer had reasonably understood the final Minute of Tender as including a substantial offer of expenses in his favour, and had accepted it on that basis. If the defenders' motion were to be granted in any of its alternative branches, none of which had been focused at an earlier stage, the pursuer would suffer serious prejudice and might in particular lose his right to receive all or part of the principal sum tendered.
[7] In the whole circumstances, while conceding the court's discretion in this area, counsel invited me to refuse the defenders' motion and award the pursuer his whole expenses in the ordinary way.
Discussion
[8] I have no difficulty in accepting that the offer of expenses in a conventional Minute of Tender refers, not to any fixed amount, but to such expenses as the court, in its discretion, considers appropriate in all the circumstances. As the Lord President (Hope) put it in McKenzie, at page 319, the expenses offered in a tender must be those which are "... appropriate to the case as determined by the court". Similarly, at paragraph 8 of the Opinion of the Court in Brackencroft, the Lord President (Hamilton) said:-
"The meaning of the expression 'the expenses of process' is not in doubt. It is
'an elastic, a flexible phrase, and is always subject to interpretation by the Court... the Court determines what the phrase connotes and what expenses are covered by it.'
(Clegg v McKirdy & MacMillan per LJC Alness at p. 447, cited with approval by the First Division in McKenzie v H D Fraser & Sons). Because it is a judicial tender, the court determines its particular content in the light of the circumstances of the case before it.... The result is that, while a party lodging a tender in ordinary form and a party considering or accepting it will not know with exactness the content of the expenses comprised in that tender, he will know that it will be determined by the Court applying judicial principles... in the circumstances of the particular case".
[9] Echoing dicta in some of the earlier cases, the Lord President in McKenzie, at page 321, went on to say:-
"The purpose of the tender is to offer a specific sum with expenses, so that if he accepts it, the pursuer will be placed in the same position as if, at the date of the tender, he had obtained a decree for the amount tendered. There is nothing to stop a defender from making an offer with modified expenses or to stop a pursuer from accepting an offer on these terms, but the rules as to judicial tenders do not admit of this approach because, in the absence of agreement, expenses are always at the discretion of the court."
By comparison with an ordinary decree pronounced by the court, however, it seems to me that there is one very obvious and important difference where a tender is in issue, namely the fact that the tendering party explicitly undertakes responsibility for his opponent's expenses along with the principal sum, and by necessary implication concedes that he will in any event bear his own. In my opinion recognition of that difference is implicit in the last-mentioned observation of the Lord President in McKenzie, and in the other dicta to which he referred. In a case like this, the issue concerns the construction and appropriate content of a judicial offer made by the tendering party towards his opponent, and I am unable to conceive of circumstances in which an express tender of expenses, made contractual by acceptance, could legitimately be construed as permitting the tendering party to demand that the whole expenses of process should instead be awarded in his own favour. Even where its content is subject to assessment by the court, an offer to meet the pursuer's expenses must in my view have the effect of precluding any award in the other direction. I therefore have no hesitation in rejecting the primary argument which was advanced by counsel for the defenders in this case. Indeed counsel very fairly accepted, in the course of the hearing, that he could "... see a logical difficulty" in the position he was adopting.
[10] In this context, I regard the case of Crombie as clearly distinguishable, on the ground that the offer there was of a lump sum only and thus did not qualify as a judicial tender. Because expenses were not mentioned, and in particular were not the subject of any offer by one party in favour of the other, their regulation remained entirely at large for the court. It can only have been on that basis that the Lord Ordinary felt free to award the "tendering" defenders their whole expenses in that case.
[11] I turn now to the more difficult issue as to how far (if at all) I should exercise my acknowledged discretion to modify or restrict the pursuer's recoverable expenses in terms of the Minute of Tender and Acceptance. On the one hand, I am inclined to accept that the pursuer and/or his solicitors acted unreasonably in raising this action at a time when they knew that, despite multiple requests from the defenders' claims adjusters, details of the pursuer's loss of earnings had not yet been made available. The triennium still had nearly two years to run; the pursuer had by then been back at work for about a year; and the defenders seemed interested in trying to settle the claim on a without prejudice basis. At the hearing before me, counsel for the pursuer was unable to identify any positive reason, other than the absence of a settlement offer from the defenders, why the present action should have been commenced as early as June 2006, and she ultimately accepted that the unavailability of earnings-loss details at that time was "regrettable". Had the defenders in their defences conceded liability to make reparation to the pursuer, narrating the circumstances in which the raising of the action had frustrated a genuine desire to settle the claim economically out of court, and if the action had thereafter been settled expeditiously as soon as circumstances allowed, there might have been much to be said in favour of modifying the pursuer's recoverable expenses to a substantial degree.
[12] However, the defenders did not take that course, and on
analysis it seems to me that their own conduct fell short of being as
reasonable as their counsel suggested.
It is true that, for more than a year prior to the raising of the
action, the defenders' claims adjusters repeatedly asked for information which
would enable them to consider the quantum
of the claim. Significantly, however, as
reflected in these adjusters' letter of
[13] The defenders' final tender was, moreover, preceded by a series
of lesser offers and one counter-proposal by the pursuer. On
[14] Against that background, I have reached the conclusion that the
scope for modification of the pursuer's recoverable expenses in this case is,
for practical purposes, quite limited. For
one thing, I do not consider that justice would be done by anything in the
nature of restriction to the
Decision
[15] In the result, I shall on
the pursuer's motion grant decree in terms of the Minute of Tender and
Acceptance, but restricting the pursuer's entitlement to expenses thereunder to
four-fifths. In addition, on an
unopposed basis, I shall certify Angus D McLean, Consultant Orthopaedic
Surgeon, as a skilled witness for the pursuer.