Category Archives: Damages Claims

What Has Happened to Craig Whyte’s Threatened Court Action against the BBC?

 

The Sunday Mail today has reported that the BBC has refused to apologise to Craig Whyte in connection with the “Inside Story” programme last month. They report that Mr Whyte had earlier ordered his solicitors, Carter Ruck, to sue on his behalf, and that, as they have no right of audience in Scotland, they have engaged Bannatyne Kirkwood France to pursue the matter in this jurisdiction.

 

I find it very interesting that no action has yet been raised by Mr Whyte, despite the threats to do so immediately. As he was quoted as saying to Tom English in the Scotland on Sunday three days after the programme, “It’s outrageous. I actually can’t believe that they went with the allegations they went with. We told them. We sent lawyers letters all week, warning them that these things aren’t true and warning them what would happen if they ran with these allegations.” There was also comment from a spokesman for Mr Whyte that action was being raised immediately.

 

Interestingly, when Martin Bain won his arrestment order against Rangers, a Rangers spokesman was quoted as saying that they would be immediately appealing this “outrageous” decision. Nothing happened.

 

In connection with the Rangers dispute with former solicitors, Levy & McRae, Collyer Bristow (the London law firm in which Gary Withey, Rangers company secretary, is a partner) lodged a complaint with the Scottish Legal Services Commission on Rangers’ behalf. Levy & McRae alleged that this was done deliberately ignoring significant evidence produced by them to Collyer Bristow to the effect that they were perfectly entitled to act for Mr Bain, despite previously acting for Rangers, this being advice from two QC’s and from the Head of Professional Practice at the Law Society! Mr Whyte, in the same discussion with Mr English last month said, “Levy & McRae acted for Rangers previously and under Law Society rules they shouldn’t be acting against their client so when they represented Bain we complained about them to the Law Society…” This is despite Levy & McRae, about two months ago, asking the Court of Session to overturn the SLCC decision even to accept the complaint as irrational. Rangers, despite clearly being a party to the case, as the complainer, have not entered appearance and therefore, despite Mr Whyte’s noises, do not seem to be pursuing this issue now.

 

As far as the libel proceedings against the BBC go, Carter-Ruck has a well earned reputation as one of the most aggressive, and best, plaintiff’s firms. They generally do not wait prior to raising court action. One demand for a retraction or apology and then they are off to court. Indeed, with the rights of privacy under the Human Rights Act, there is often a case for seeking an interdict or injunction to stop publication of the article or programme complained of in advance.

 

As this is a case where, according to Mr Whyte the BBC knew his complaints prior to broadcast, then once the credits had rolled, one would have expected a writ to follow by return. In addition, there would have been no doubt that this action would have been raised in the High Court in London. People with even the most tangential connection with England try to get their cases heard at the High Court in London. They are known as “libel tourists”. Notorious cases where publications with only minuscule circulations in England have been successfully sued there have led to demands to change the laws, and in the USA for example, moves to make English libel awards unenforceable there. Why is England a good place to sue for libel? Firstly, even though awards of damages have been restricted from years past, they are still much higher than in other jurisdictions, including Scotland. Secondly, it makes far more financial sense for the client, and for his lawyers, to pursue a libel case in London, rather than a defamation action in Edinburgh. The BBC programme was shown, or was available to be seen, in England, and the BBC is based in London. There is no jurisdictional reason not to pursue the case in London.

 

High Court libel proceedings in London are far more costly than defamation proceedings in the Court of Session. Although presently subject to review, “no win-no fee” agreements are very common in libel cases in England, and Carter Ruck are one of the main users of them.  No win no fee agreements save the client funding the claim up front, and also protect them against costs if unsuccessful. The successful lawyer can also recover an enhanced fee from the defendant, increasing their recovery by up to 100%.

 

In Scotland, cases can be pursued “no win, no fee”.  The costs payable to the successful lawyer are far less, and whilst there can be uplifts of fees; they are far less than in English cases. There is little point in pursuing a defamation case in Edinburgh, if you can sue in England. Firstly any damages awarded will be higher, and secondly the greatly inflated costs make it far more likely that the defendant would settle.

 

He clearly has the best advice he can get, but it seems an interesting tactic to look to sue in Scotland. If the case goes ahead, there might be some interesting discussions about the jury. (In Scotland a defamation case is normally heard before a jury of 12 members in the Court of Session in Edinburgh.) After the verdict in John Wilson’s trial for allegedly assaulting Neil Lennon, there was some cynical comment about Scottish juries. One can only imagine what would be said about a jury which found in favour of Mr Whyte or one which found against him.

 

The Sunday Mail quotes his spokesman as saying “This legal action against the BBC is not about money.” I was told a long time ago that if a client tells his lawyer “It’s not about the money” you should run away very fast! The courts deal with monetary damages, not fixing reputations. And clients who say it is not about the money when a case starts become very concerned about it when the case ends unsuccessfully.

 

The Carter-Ruck website still states that they are “advising” both Mr Whyte and Rangers in connection with the programme. I’m not aware of any criticism of Rangers per se in “Inside Story”.

 

As far as the no win, no fee arrangement is concerned via Carter Ruck they state that the following are the factors they consider:-

  • The claim needs to be of a sufficient value or involve a fundamental right or important principle;
  • We need to be satisfied as to the merits of the potential claim; and
  • We need to be satisfied as to the opposing party’s ability to pay any damages and/or costs orders.

If we do not feel able to offer a CFA, we may be prepared to consider offering a differential fee arrangement, whereby we will charge reduced hourly rates as the litigation progresses and enhanced rates if, and only if, the case is won.

 

Presumably Mr Whyte’s solicitors think the claim is worth enough money – after all, accusations of criminality against a prominent businessman would seem to be material. In addition, the BBC can pay an award of damages.

 

Does this suggest therefore that Carter Ruck is not satisfied as to the merits of the claim? As I have commented before, the programme seemed to me to be framed very carefully, making accusations against Mr Whyte which come from public documents, such as court records. In addition, as far as accusations such as that of being a “shadow director” go, this appears to have come from court documents concerning the winding up of Re-Tex Ltd, and qualified privilege applies to reporting of court matters without malice. Proof of malice is extraordinarily difficult.

 

To conclude, does this look at the history of Mr Whyte’s threatened litigation since he took charge at Ibrox, show a pattern emerging of threats and bluster, but no concrete action?

 

 

 

 

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Filed under Bain v Rangers, BBC, Courts, Damages Claims, Football, Rangers

Golfer and Golf Club Found Liable to Player Struck in the Eye – Phee v Gordon + Another

 

 

Lord Brailsford today found both defenders liable in the case of Anthony Phee v James Gordon and Niddry Castle Golf Club, reported at http://www.scotcourts.gov.uk/opinions/2011CSOH181.html.

On the 10th August 2007, Mr Phee, the Pursuer, was playing a round of golf at Niddry Castle Golf Club. Passing from the 6th to the 7th holes, he was struck in the eye by a golf ball driven by Mr Gordon, the First Defender. Mr Gordon was driving off the 18th tee, some 150 yards away from Mr Phee. There were no warning signs on this path, despite its proximity to the 18th tee.

Mr Phee’s position was around 12 degrees to the left of Mr Gordon’s position. According to Mr Gordon, he realised immediately he had hit a bad shot, and shouted “fore”.

Mr Phee heard the warning cry and ducked down, covering his head with one hand and looking up for the ball. In doing so, he was struck in the eye.

The case against Mr Gordon was that he failed in his common law duty of reasonable care not to cause harm to the Pursuer, both by playing his shot when it was unsafe to do so, and by not being quick enough to shout “fore”. The case against the Golf Club was that it failed to fulfil its duty of reasonable care as laid down in the Occupiers Liability (Scotland) Act 1960, s2(1).

Lord Brailsford first had to determine if the defenders owed duties of care to the Pursuer. He followed the approach of Lord Bridge of Harwich in Caparo Industries v Dickman [1990] 2 AC 605:

“What emerges is that, in addition to the foreseeability of damage, necessary ingredients in any situation giving rise to a duty of care are that there should exist between the party owing the duty and the party to whom it is owed a relationship characterised by the law as one of ‘proximity’ or ‘neighbourhood’ and that the situation should be one in which the court considers it fair, just and reasonable that the law should impose a duty of a given scope upon the one party for the benefit of the other”.

Lord Brailsford described the three stage test for determining if a duty of care arises:- “first, it must be determined if damage is reasonably foreseeable; second, it must be determined if there is sufficient proximity between the parties and, thirdly, it requires to be determined if it is fair, just and reasonable to impose the duty.” His Lordship decided that these tests were satisfied for both defenders.

Counsel for Mr Gordon sought to argue that the shot was a “freak shot and a remote possibility which was foreseeable but not reasonably foreseeable”. The Golf Club had accepted that “the shot struck by Mr Gordon which struck the pursuer was a bad or wayward shot but one which would on occasion be struck by every golfer.”

Counsel for the First Defender also argued (and this was adopted too by the Second Defender) that it was necessary to have regard to “the sporting context and the relationship between the two players”. This argument proceeded on the basis that there was a social value in the game of golf in Scotland and that such social value was a fact within judicial knowledge. The social value was that the game was played, on a regular basis, by a very large number of people who derived pleasure from the game. Beyond that it required to be considered that there was an inherent relationship between players on a golf course who played the game within the context of a recognised set of rules and an acknowledged etiquette to the playing of the game. These rules and this etiquette recognised that the game was not risk free but were designed to ensure that risk was reduced to a level which would be acceptable, and importantly, recognised by those playing the game.

In addition, the Golf Club argued that there was an issue of causation in relation to whether or not the erection of warning signs, as desiderated by the Pursuer, would have prevented the accident. The Club argued it would not.

Both defenders sought to place a high degree of contributory negligence on Mr Phee, even though he was only playing his fifth round of golf in his life. They argued that he had not paid attention as he walked along the path in the direction of the 18th tee, and that he had not acted correctly when he heard the warning shout. Indeed, counsel for Mr Gordon sought to argue that the Pursuer was entirely to blame for the accident.

Lord Brailsford rejected that argument saying “I accept that a very experienced golfer might instinctively duck and cover his head. I do not consider that the same reaction could or should be expected of a person in the position of the pursuer. I do not consider that the pursuer, whatever he may have done, acted inappropriately.”

As far as Mr Gordon’s perception of risk went, he told the court he felt he was playing very well that day, and he was not concerned about the risk of hitting someone by driving off line. The court disagreed with that assessment saying “On the basis of his own evidence I consider that these errors were caused by an inflated degree of confidence occasioned by what Mr Gordon considered, wrongly in my view, to be the very good round of golf he was having.” As an aside, one wonders of His Lordship is a golfer – the feeling of playing better than one actually is, is well known to anyone who ventures on to the links.

The court considered that Mr Gordon ought to have had in his contemplation the fact that golfers do, from time to time, play bad shots; that it would not take much of a bad shot to place the Pursuer at risk, and that his own skills were not enough to eliminate such a possibility. Accordingly he owed Mr Phee a duty of care and indeed the primary responsibility for the accident lay on him.

As far as the Golf Club went, the court considered that it too owed a duty of care to the Pursuer and that this was breached by failure to erect signs. “There was evidence from all the golfers involved that they would have had regard to signs had they been in place. Both experts considered that signs would have been a proper and effective way to draw risk to the attention of golfers and, moreover, that such signs, had they existed, would have been likely to have been heeded.” As a result of this failure, and weighing the comparative blameworthiness of the parties, Lord Brailsford decided that Mr Gordon was 70% to blame, and the Club 30% liable.

As touched on above, he rejected the claim that any blame fell on the Pursuer, stating “There is, beyond even these time calculations, the consideration that the pursuer was a novice golfer with, at best, only a sketchy knowledge of how to react to warnings shouted on a golf course. I do not consider that a person in the position of the pursuer on the golf course that day should be judged too finely in any avoiding action he may, or may not, have taken. Quite simply, even if I were incorrect in my finding that he did duck, simply staring and trying to sight a ball would not in my view constitute negligent behaviour”.

Quantum having been agreed already, the case was put out By Order to discuss the precise terms of the decree.

Conclusion

As the court observed, these cases often turn on their individual facts. But there are some wider lessons to be learned, I think.

I imagine that prudent Golf Club Secretaries across Scotland will be out checking their courses to see if there are any areas where warning signs might be placed. There might also be an addition to the scorecard telling players what to do if they hear a shout of “fore”. If, for example, the Second Defender here gave a clear warning that, on hearing such a cry, a player should not look up for the ball, might they have escaped liability, or had it reduced?

In addition, one would not be surprised if insurers of Golf Clubs sought to have some form of limitation or exclusion of liability incorporated into the “contract” for playing golf, though that raises further legal complications.

Prudent golfers too should be checking their home insurance policies to see whether or not they would be covered personally, in the event of a wayward drive having the same catastrophic effects as that of Mr Gordon on Mr Phee.

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Filed under Civil Law, Courts, Damages Claims, Negligence

18th October – Is the Rangers End-Game Approaching? Bain, McIntyre, Arrestments and HMRC

There is an increasing spiral of activity regarding the finances of Rangers FC Ltd. As discussed before, the courts are being asked to consider issues about Rangers regularly. The BBC is poised to show a documentary about the takeover, and has already discussed the issues on Newsnight Scotland and online. Gerry Braiden in the Herald has written informed and insightful pieces as regards developments.

After lots of hard and interesting work by, inter alia, the Rangers Tax Case Blog and Phil Mac Ghiolla Bhain, the story of the possibly imminent demise of one of the two giants of Scottish football has come into the public eye.

Mr Mac Ghiolla Bhain indeed views his work on this issue as complete – http://www.philmacgiollabhain.ie/job-done/

If some observers are correct, it is not just the crest, but the whole Club poised to shatter

But there are still many twists and turns to go, so I thought I’d try to offer some thoughts re the legal aspects of matters presently arising.

 

McIntyre v Rangers

Why were Rangers not represented today (18th October) at court? Good question! I have various thoughts but it cannot be as simple as them having run out of money to pay their lawyers, can it? If that is the case, then there would be far more serious consequences should they fail to appear on Friday when Mr Bain’s case calls again.

It might simply be the case that Rangers’ counsel viewed the motion by Mr McIntyre as being impossible to oppose successfully. In that event, why spend extra money on having counsel and solicitor attend court? But, as I mention above, I cannot imagine things are so bad that Rangers could not fund an appearance re this today.

The former Finance Director at Rangers, Donald McIntyre

Might they have decided that opposition to the application would lead to the exposure of more dirty linen? After all, from all reports, Mr McIntyre’s counsel had stated his case at length last week. Therefore, in the absence of opposition, Lord Hodge simply had to consider the same issues as he had in dealing with Mr Bain’s application – firstly, whether Mr McIntyre had a prima facie case, secondly whether there was a real and substantial risk that enforcement of any decree which might be obtained in the action would be defeated or prejudiced by reason of Rangers being insolvent or verging on insolvency, if the court did not grant warrant for diligence on the dependence and thirdly, whether it was reasonable in all the circumstances to grant a warrant, including the effect which that grant may have on any person having an interest.

The non-appearance by Rangers can be seen as an implied admission regarding the three parts of the equation. Of most importance is the implicit admission that he has a prima facie case, and this time not one with a counterclaim against it (at least so far).

It also seems to confirm that, despite strident comment from Rangers that the decision of Lord Hodge in the Bain arrestment would be appealed, in fact this has not and is not happening.

Mr McIntyre’s case, if it follows a similar route to that of Mr Bain, is unlikely to reach a full hearing before next summer. Clearly his hope is that his arrestment will be in place long enough to provide him with some protection, as I will look at below.

 

The Arrestments By Mr Bain and by Mr McIntyre

Arrestments – an arrestment only catches funds in an account when the arrestment is lodged. If an account has £1 million in it today – nothing tomorrow – and £1 million the next day, then if the Sheriff Officers serve the arrestment today, there is success, but if tomorrow, it fails. That is the creditor’s hard luck, and a debtor would often be advised to take steps to put funds beyond the reach of an arrestment, if possible. There is no “punishment” for the debtor for their cupboard being bare when the Sheriff Officers come knocking!

Sheriff Officers visiting Ibrox Stadium earlier this year

One wonders if the Sheriff Officers might pitch up at Rangers’ bank tomorrow (19th October), once the cash takings from tonight’s friendly against Liverpool, are banked. Better to hit the account after those funds are deposited. Alternatively, it might be advisable to wait till just before pay day, when there should be funds in the account.

Mr McIntyre is likely to have a good grasp on his former employer’s cash flows, and should be able to advise his lawyers as to the best day to go for the arrestment.

In addition, the arrestment could be served upon someone due to pay Rangers money. For example, a TV company or sponsor, could have the funds they are due to pay Rangers frozen before they are paid to the recipient.

The Bain and McIntyre arrestments (the latter if successful) are “diligence on the dependence” of ongoing actions, not final decrees, so unlike the HMRC position mentioned below, there is no automatic transfer of those funds possible till after the conclusion of the relevant cases. These actions by the former directors are intended to ring fence funds to meet their claims, if successful.

The position about the “ring fencing” has been subject to some discussion.

As far as I understand, the position is as follows.

S61 of the Insolvency Act 1986 deals with the power of a receiver to dispose of property. I have assumed a receiver would be appointed first by “Group” under the floating charge assigned from Lloyds TSB to Craig Whyte’s Group when he acquired the Club. Subsection 1 states “Where the receiver … is desirous of selling or disposing, of any property or interest in property of the company which is subject to the floating charge by virtue of which the receiver was appointed and which is…(b) property or an interest in property affected or attached by effectual diligence executed by any person, and the receiver is unable to obtain the consent of such creditor … the receiver may apply to the court for authority to sell or dispose of the property or interest in property free of such … diligence.”

The question is, what is “effectual diligence”?

S61 (1) (1B), as inserted by S14 of Schedule 5 to the Bankruptcy and Diligence etc. (Scotland) Act 2007 states “For the purposes of subsection (1) above, an arrestment is an effectual diligence only where it is executed before the floating charge, by virtue of which the receiver was appointed, attaches to the property comprised in the company’s property and undertaking”.

This refers to the date of crystallisation of the floating charge, rather than the date of its creation. It crystallises, effectively, when it is enforced, by which method the receiver would be appointed. Therefore, as these arrestments have been put in place prior to the floating charge crystallising, the receiver would need the permission of the court to interfere with the arrested funds.

Subsection 3 provides that the court should not grant such authorisation “unless it is satisfied that the sale or disposal would be like to provide a more advantageous realisation of the company’s assets than would otherwise be effected.

So, on one view, the arrestments are useful for Messrs Bain and McIntyre.

If a liquidator is appointed however, the arrestments could lose their effectiveness, at least as regards benefiting the claimants.

S185 (1) of the Insolvency Act states “In the winding up of a company registered in Scotland, the following provisions of the Bankruptcy (Scotland) Act 1985—(a)subsections (1) to (6) of section 37 (effect of sequestration on diligence) … apply so far as consistent with this Act, in like manner as they apply in the sequestration of a debtor’s estate…”

Turning to s37 of the Bankruptcy (Scotland) Act 1985  we see at ss4 “No arrestment … of the estate of the debtor… executed—(a)within the period of 60 days before the date of sequestration and whether or not subsisting at that date; … shall be effectual to create a preference for the arrester…; and the estate so arrested …, or the proceeds of sale thereof, shall be handed over to the permanent trustee.”

So, if the there is a winding up (i.e. liquidation) within 60 days of the arrestment being lodged, then it gives the arrester no advantage. In that case, the funds go into the general pot, and are distributed to creditors.

In respect of Mr Bain therefore, if Rangers survive liquidation until 12th November, he has secured a substantial part of any award which might finally be due to him.

Can the gates of Ibrox repel the tide of financial attackers?

 

 

The HMRC Arrestment re the Small Tax Case

If, as has been discussed and assumed, HMRC succeeded in trapping £2.3 million, then this will automatically be paid to HMRC by the bank 14 weeks after the arrestment was carried out.

As I get bored with stating, Rangers could agree to let HMRC get their hands on those arrested funds. They are not obliged to wait the 14 weeks. Whilst the sum remains unpaid, interest will be accruing on the debt.

Why might they delay paying? It could be to annoy HMRC, but that is never a good idea. Otherwise it can only reasonably be that Rangers think they can defeat the HMRC claim by entering receivership and then liquidation quickly enough to render the arrestment ineffective, but as we have seen, 60 days gives the arrestment effective force against the liquidator.

If the company is wound up before the 60 days expire (at the end of this month) then the funds go back into the pot for creditors, and defeat the HMRC preferential claim.

From a PR point of view, and in the interests of getting HMRC onside to any extent, one would think they would be willing to hand that amount over. Clearly they have no intention of doing so.

 

What Comes Next?

Mr Bain is in court on Friday and we may hear more about potential witnesses. I understand that amongst the witnesses for Mr Bain it is likely that Messrs Murray, McLelland and Johnston would be called. That would be three heavyweight witnesses, who, one would suspect, might be less than enthusiastic about Craig Whyte bearing in mind his treatment of them and their colleagues.

The 60 day period for the HMRC arrestment runs out on 27th or 28th October. Will things happen before then?

Will Rangers try to interdict the BBC from showing this documentary on Thursday? If not, their PR barrage has already annoyed many, as they arrogantly bar co-operation with the BBC.

I might not get my detailed thoughts about freedom of speech and prior restraint down on paper before the programme goes out, but generally, unless the issue is one to do with national security, the courts are reluctant to block programmes before transmission. The remedy for actionable wrongs in such a broadcast is not to stop the show, but to allow an action for damages for defamation.

 

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Filed under Bain v Rangers, Civil Law, Courts, Damages Claims, Football, McIntyre v Rangers, Rangers

The Scotsman – “News of the World has not Appealed Sheridan Verdict” – Shome Mishtake Shurely?

Tommy Sheridan’s case has taken a bit of a back seat as far as press coverage is concerned, having been overwhelmed by the tide of News of the World disgrace over the summer, and following on the rejection of his application for leave to appeal against his criminal conviction for perjury.

The Scotsman today has an article which discusses Mr Sheridan’s appearance at a fund raiser to assist with his civil case.

Tommy Sheridan - in happier times

The article is one which seems to maintain the recent proud tradition of our newspapers, both the Scotsman and elsewhere, having very poor coverage of the meat of legal issues.

David Allen Green, the highly acclaimed lawyer and commentator, has focussed for some time now on “Bad Law” coverage in the media – discussing cases where what is reported bears little or no relation to the issues actually raised, or where the legal understanding of the position in the article goes badly wrong. This piece seems, to me, to fall into that category.

The article states:-

(Sheridan’s) solicitor, Aamer Anwar, is pursuing the cash payment on the basis that News International has yet to lodge an appeal against the initial decision at the Court of Session in Edinburgh to award damages to Sheridan over a series of allegations about the left-winger’s private life in the now-defunct News of the World.

“News International, which has been dogged by allegations of phone-hacking, pledged to appeal against the damages award in the immediate aftermath of Sheridan’s conviction in Glasgow last December.

It goes on to quote Kenny Ross, described as a leading figure in the Fire Brigades Union, and chair of the Defend Tommy Sheridan Campaign. He is quoted as saying:-

Tommy is pursuing News International for the £200,000 he was awarded in 2006. His solicitor is writing to News International to say that Tommy wants the money the court said he should have. News of the World hasn’t lodged an appeal against the original decision, despite saying that it would do that. Tommy’s solicitor will be arguing for the damages to be paid on that basis.

What’s Wrong With The Piece?

It struck me as rather odd that, according to the article, News International (NI) had not appealed against a judgement made by a jury in August 2006.

Generally courts only allow appeals to be lodged in a very short time window after decisions are made. Five years for lodging an appeal doesn’t fit anywhere within the rules in Scotland anyway.

The Rules

Section 29 of the Court of Session Act 1988 deals with applications for review of the verdict of a jury in a civil case in Scotland. It states at subsection 1:-

Any party who is dissatisfied with the verdict of the jury in any jury action may, subject to such conditions and in such manner as may be prescribed, apply to the Inner House for a new trial on the ground—(a) of misdirection by the judge; (b) of the undue admission or rejection of evidence; (c) that the verdict is contrary to the evidence; (d) of excess or inadequacy of damages; or (e) of res noviter veniens ad notitiam; or on such other ground as is essential to the justice of the cause.

Chapter 39 of the Rules of the Court of Session deals with time limits for such an application. Chapter 39.1 (1) states:-

“An application under section 29(1) of the Act of 1988 (application for new trial) (a) shall be made to a procedural judge, by motion, within 7 days after the date on which the verdict of the jury was written on the issue and signed.

Chapter 39.2 (1) states:-

A procedural judge may, on an application made in accordance with paragraph (2), allow an application for a new trial under section 29(1) of the Act of 1988 to be received outwith the period specified in rule 39.1(1) and to proceed out of time on such conditions as to expenses or otherwise as the procedural judge thinks fit.”

Is the Scotsman suggesting that NI missed the seven day window, and indeed has done so by over five years, and nearly a year after Mr Sheridan’s conviction? In such circumstances a late review application would receive very short shrift.

If NI had instructed its solicitors to appeal following the verdict, as was publicised, then they would have a stonewall negligence claim against their lawyers if their failure to appeal resulted in them having to pay Mr Sheridan £200,000.

Has News International Actually Appealed? Yes, of Course

However, 20 seconds on Google (including stopping for a mouthful of tea) shows that the above cannot be the case.

On 11th August 2006 the BBC reported, under the heading “Tabloid launches Sheridan appeal” that:-

“The News of the World has launched an appeal after a jury awarded Tommy Sheridan £200,000 in damages in his defamation case against the tabloid. The appeal was lodged with the Court of Session in Edinburgh but has yet to be formally accepted.”

On 13th February 2007 the BBC reported, under the headline “Newspaper’s Tommy appeal date set”:-

A date has been set for the News of the World’s appeal hearing to overturn a £200,000 damages award for calling Tommy Sheridan MSP “a swinger. Two weeks in December have been pencilled into the Court of Session’s diary for appeal judges to hear the Sunday tabloid’s demand for a re-trial.

“Roisin Higgins, counsel for the Sunday tabloid’s publishers said legal argument about a re-trial was expected to start on 4 December and is expected to last for two weeks.“

Then, on 25th September 2007, the BBC, under the headline “Sheridan court appeal put on hold” reported:-

A News of the World appeal against Tommy Sheridan’s libel victory against the paper has been put on hold. The newspaper is seeking to overturn the verdict, after being ordered to pay Mr Sheridan £200,000. Judges agreed that the proceedings should be suspended at a hearing at the Court of Session in Edinburgh. The decision means the case will now be suspended until the Crown inquiry into perjury allegations resulting from the case is resolved.”

So, from all of that, it appears that (a) an appeal was lodged (b) a date for hearing the appeal was set and (c) the court sat to decide to delay the appeal till after the perjury inquiry!

Either Mr Sheridan has a novel legal argument to the effect that the appeal was not properly lodged, which seems highly unlikely in light of the proceedings following it, or the Scotsman has simply repeated what someone has told it, without any check as to the credibility or reliability of the information.

If there had been no appeal, Mr Sheridan would hold a valid decree and his lawyers would instruct Sheriff Officers to take enforcement action against NI. But the lodging of an appeal prevents a decree being issued, so he has, so far, nothing to enforce.

The Scotsman article today also states:-

“News International, which has been dogged by allegations of phone-hacking, pledged to appeal against the damages award in the immediate aftermath of Sheridan’s conviction in Glasgow last December.”

But, as we have seen, the appeal was lodged in August 2006, long before the guilty verdict.

What Is The Correct Position?

As far as I can see here is where the case stands. The appeal was “sisted” (suspended) pending the criminal case. Once that has been resolved, it is open to either party to ask the court to “recall the sist” and put the appeal back on the court lists.

On the basis that the lodging of the appeal stopped NI having to pay Mr Sheridan, on one view they really have no incentive to get the appeal running soon, although excessive delay in doing so could result in the appeal being thrown out.

But Mr Sheridan’s option, if he wants to pursue the matter is simple. He can, either directly, or through his lawyers, ask the court to recall the sist. Such a motion would undoubtedly be granted and the case would be back on the rails.

If Mr Sheridan desires representation at his civil appeal and cannot find lawyers to represent him on a “no-win, no fee” basis, then the costs of him opposing the NI appeal will be high and funds would need to be raised for that. That however is not the story the Scotsman has elected to print.

 

Conclusion

As seems so common these days the press are not able, for reasons of resources I imagine, to address the legal issues in case thoroughly. The Scotsman at this point in the court proceedings (or indeed at ant time) would be unlikely to want to print a 5,000 word article on the likely outcome of the NI appeal (though such an article should be appearing on this very blog soon!). That is understandable and excusable.

What is far less so is when an article is published which, whilst about the law, is factually incorrect, and which, within seconds, can be shown to be so.

The problem is that most of the public get their knowledge of the law and the courts from the media. Where what they are being told is wrong, then the prospects of sensible and informed debate about the many legal issues which affect our daily lives are greatly reduced.

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Joan McAlpine MSP Gets It Oh So Wrong on the Supreme Court Asbestos Case – No Lassie No!

It is the job of Parliament, both at Westminster and Holyrood, to make laws. Whilst a parliament full of lawyers is a prospect too horrible to contemplate, one would hope that the MPs and MSP’s charged with passing legislation would have some grasp of the issues before them. That often seems lacking however.

In addition, as I have mentioned before, the standard of coverage of legal issues in the Scottish media falls far short of the levels of the past, and of what helps properly to enlighten the public.

On 20th September the Scotsman printed a fine example of the “double whammy” of a journalist and MSP producing a woefully inaccurate article.

Step forward Joan McAlpine, SNP list MSP for the South of Scotland. Ms McAlpine has had a distinguished career in journalism, and latterly moved into blogging with the acclaimed Go Lassie Go blog. In May she won a seat at Holyrood.

On 20th September however her piece was so incorrect and inaccurate that there was some discussion about whether or not it could have been part of a “Spot the Deliberate Mistake” competition!

Her article seems to have been written as a follow up to this earlier piece by Gareth Rose. Mr Rose wrote his piece, with comments from interested parties and despite an over statement of the effects of the particular condition referred to, namely “pleural plaques”, there was little to fault.

This would appear to have prompted Ms McAlpine to pick up her pen and she wrote, under the headline “Shameless Effort to Evade Justice may Affect us all” about the legal challenge brought to the UK Supreme Court by insurers seeking to overturn the Damages (Asbestos-related Conditions) (Scotland) Act 2009, passed by the Scottish Parliament.

 

 

 

ANYONE who thinks the row over the Supreme Court is esoteric should pay attention to a case due in the next few weeks, when insurance companies ask judges to “protect” them from workers with industrial disease. The Supreme Court is asked to overturn an Act of the Scottish Parliament that compensates workers exposed to asbestos on the grounds that this popular legislation violates insurers’ human rights.

The decision is due this Wednesday 12th October, the case having been argued at the UK Supreme Court, and televised live on the internet, in June. Mr Rose noted the due date for the judgment but Ms McAlpine seems to have missed that.

The case is not about insurers asking for protection from workers with industrial diseases either. The case is about whether or not the Scottish Parliament has the competence, standing the terms of the devolution settlement, to pass such a law. Whilst there are a number of claimants named in the proceedings who are persons alleging that they suffer from pleural plaques, they were not sued by AXA and the other insurers, but intervened in the case to have their voices heard, as they were allowed to do by Lord Uist reported at AXA Insurance and Others v Lord Advocate and Others [2010] CSOH 36.

The issue is undoubtedly an important one, but not for the reasons suggested by Ms McAlpine. And the popularity of a piece of legislation has no bearing, as far as I can see, on its legality!

 

 

Now you might think the man with damaged lungs is more deserving of legal protection than the loss adjuster. It’s one thing to respect the dignity and privacy of all human beings, no matter what they have done. But extending this principal (sic) from individuals to institutions is a bizarre development. Do insurance companies bleed? Do they gasp for breath?

Let’s pass quickly over the spelling mistake and move to the next errors. Ms McAlpine seems surprised that insurance companies are claiming the protection of “human rights”. Whilst that might, at first glance, look odd, the position has been clear for many years. Article 6(1) of the European Convention for the Protection of Human Rights and Fundamental Freedoms provides, inter alia, that “In the determination of his civil rights and obligations…everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.” The full title of the ECHR refers to fundamental freedoms and is not restricted to human persons only. A company is, in law, a legal entity and it too has the right referred to under Article 6 for example. There is no issue therefore about a company having “human rights”. It does.

Ms McAlpine, echoing Shylock in the Merchant of Venice, then goes on to contrast the flesh and blood worker with the soulless corporation. But her reference to “gasp for breath” is, as I will show below, also inept.

If they prick us, do we not wheeze...or something like that?

 

 

Asbestos is now recognised as a carcinogen. The lagging and insulation material was once widely used in construction, and particularly in the traditional shipbuilding communities such as Glasgow, Clydebank and Greenock. Survivors tell stories of leaving footprints in deadly dust that covered workshop floors like a light dusting of snow.

Asbestos was hailed upon its discovery as a fantastic material – waterproof, fire-resistant and easy to use. However, it had one drawback – its use could prove fatal to those who worked with it or who inhaled the asbestos dust of fibres. By saying that “now” asbestos is recognised as a carcinogen ignores the fact that that has been acknowledged since at latest the 1970’s.

 

In 2007, judges in the House of Lords in their wisdom decided that pleural plaques were a condition that merited no compensation – reversing the practice of 20 years. The decision prevented future sufferers from pursuing a claim and those who had started one were then left with nothing – the UK government has now retreated and offered the latter a one-off lump sum which is time limited.

The 2007 case, known as Rothwell [2007] UKHL 39, was where the House of Lords overturned around 20 years of legal understanding by declining to treat pleural plaques as being a compensatable injury. This was not some heartless decision by faceless judges, but a reasoned and principles, though widely disputed, judgment. To see why it came about, we need to look at what pleural plaques actually are.

The British Lung Foundation website gives us information on them. It states as follows:-

What are pleural plaques?

Pleural plaques are areas of scar tissue on the pleura. The pleura is a two-layered membrane surrounding the lungs and lining the inside of the rib cage. In virtually all instances of pleural plaques there are no symptoms and you can live with them without having any long-term problems with your health.

If you have pleural plaques, it does not mean that:

  • you will go on to get a more serious disease
  • you have a more serious disease at the moment
  • you are likely to get a serious disease in the future.

While exposure to asbestos does carry a risk of developing a serious lung disease, such as asbestosis, mesothelioma or lung cancer, scientific evidence shows that having a pleural plaque does not increase that risk. Pleural plaques are not the same as asbestosis and they are not a pre-malignant form of cancer.

Do people need treatment for pleural plaques?

No. If you have been exposed to asbestos, but have no symptoms, such as breathlessness, there is no need to have any treatment. If you develop a cough which lasts a long time (more than three weeks) or you cough up blood, it is important to see your doctor straight away. Although these are not symptoms of pleural plaques, it may mean that you have a different, more serious, illness.

Does anyone die from having pleural plaques?

No.

Do people need an operation?

No. There is no need to treat pleural plaques in any way.

———————————————————————

So we have a symptomless condition that, whilst being a marker of asbestos exposure, is not a guarantee that any further condition will develop, nor is it a step on the way to the deadly asbestos related conditions such as mesothelioma. It was for this reason that, after 20 years where claimants for asymptomatic pleural plaques might receive from £5,000 – £10,000 compensation, the House of Lords decided that, as there was no “injury” within the legal meaning, there was no right to compensation.

The insurers, some of whom have gone out of business as a result of asbestos related liabilities, were delighted. Whilst the sums awarded by way of damages were much smaller than in an asbestosis or cancer case, the fact was that the vast bulk of asbestos injury claims related to pleural plaques. This decision therefore saved the insurers possibly billions of pounds. Understandably there was an outcry, but the Rothwell case did not attack the awards for conditions where there was suffering caused.

 

However the Scottish parliament moved to defend victims inside its legal jurisdiction and in 2009 passed The Damages (Asbestos-related Conditions) (Scotland) Act to ensure the Lords decision did not apply here. It received cross party support in Holyrood. The insurance companies were shameless. This should not really surprise us – they had previously tortured asbestosis sufferers by dragging out their cases for years in the hope the claims would die with them.

Now I hold no great love for insurance companies – my professional career has been largely spent fighting with them, but we must acknowledge that insurers are a business looking to make a profit. As a result they try, as far as they can, to reduce what they pay out. However, the canard that they want to drag out cases till the claimant dies, and thus save money, is one long in the past. The law gives no advantage to the insurance company in these circumstances now, as the claim passes on to the deceased’s next of kin. In fact, some recent decisions at the Court of Session suggest that it might now cost insurers more where they claimant dies than if they survive.

To say that a business doing what it is legally obliged to do – namely to act in the interest of its shareholders, is shameless is unfair. Does Ms McAlpine wish the few remaining insurers based in Scotland, if “shameless”, to leave?

 

The companies challenged Holyrood’s 2009 Act, without a scintilla of embarrassment. Indeed they were brazen in their contempt, not just for the law but for the people of Scotland and the parliament we elected. When the Court of Session in Edinburgh twice throw out their challenge earlier this year, David Williams, the claims and underwriting director of Axa, was reported as saying the industry had always doubted that a Scottish Court would overturn an Act of the Scottish parliament. This insinuates our most senior judges are compromised by nationality.

The courts are there to adjudicate on legal disputes. Is Ms McAlpine suggesting that the insurers ought not to have been allowed to test the issues in court? I fail to see how using the procedures that are there can be seen as contemptuous towards the law, the people of Scotland and the Parliament. Ms McAlpine refers to the Scottish court twice “this year” throwing out the challenges.

In fact Lord Emslie, at [2010] CSOH 2, delivered a lengthy and erudite opinion running to 2409 paragraphs of detailed legal analysis. As might be guessed from the citation, that occurred in 2010, the decision being issued in fact on 8th January that year.

The insurers appealed, as is their right, and this too was rejected by the Inner House, reported at [2011] CSIH 31. The Lord President, and Lords Eassie and Hardie determined that the insurers’ challenges failed. But at no time in either of these judgments did the courts indicate that they viewed the action of the insurers as ones of contempt. Indeed, in the penultimate paragraph of the appeal judgment, their Lordships stated “…while we have not found these matter free of difficulty, we have come to the conclusion that particularly in light of the considerations to which we referred in paragraph [144] above, it cannot be said that the decision to place financial responsibility on the insurers was one which lay outside the margin of appreciation which the legislature enjoys in this sphere.”

The insurers then proceeded to appeal to the UK Supreme Court. There has been a long-standing right of appeal in civil cases to the House of Lords, the UKSC’s predecessor. There are few of the constitutional issues which arose when some, including the First Minister, accused the UKSC of interfering in Scottish criminal law in the Fraser case. Whilst Mr Williams, quoted by Ms McAlpine, was not tactful, his comments were much less offensive to the judges, I would guess, than those of Mr Salmond and Mr MacAskill, who accused the UKSC of “ambulance chasing”! As Ms McAlpine is a staunch Scottish Nationalist, one might think she would be happy that the Scottish courts have a reputation for standing up for Scottish law!

 

Williams went on to declare the insurance companies intention of challenging the act outside of Scotland: “The Supreme Court is our best chance. We are bullish and will be preparing for the next steps of the case.”

There seems to be a refrain in the SNP of treating the UKSC as a “foreign” court. Yes, it sits in London, but generally has at least two Scottish judges sitting in any Scottish case. As has been commented in the context of the Fraser case, it seems odd that the SNP seem to dislike a court sitting in London comprising 40% Scottish judges, but welcome the European Court, where there is one British judge!

 


That case is due to be heard in London early next month. Many observers believe the companies have little hope on Human Rights grounds – the case hinges on their property rights – though stranger things have happened.

As already mentioned, and indeed as had been reported in the Scotsman, the appeal was heard previously and the judgment will be issued on 12th October. Having watched much of the case it is fair to say that the performance of counsel for the Scottish Government was unimpressive, leading to online discussion (not seriously I should add) as to whether or not counsel had been instructed to ”take a dive” so as to lose the case, allowing the SNP to complain that their laws were being overturned by a “foreign” court. Sad to say, Ms McAlpine’s article would actually lend weight to that frivolous theory! And again the snide reference to the case being heard in London – one can hear the sneer in our Parliamentarian’s voice!

After the invective directed at the insurers by Ms McAlpine for arguing about human rights, it is of note that she acknowledges that, in fact, the “property rights” case is observed to be the stronger leg of the insurers’ submissions.

 

But there are even greater issues at stake if the asbestos ruling goes the wrong way. If the insurance companies win, you will effectively see a London court overturn an Act of the Scots Parliament that has with widespread support from other political parties, the trades unions and churches. The immorality and injustice of this would not be lost on the people of Scotland, particularly as it would be impossible for the Supreme Court to similarly dismiss Acts of the Westminster parliament, which is regarded as a sovereign, law-making body in the way Holyrood is not.

Once more we have a disparaging reference to London, ignoring the fact that the UKSC is, as the name hints, the Supreme Court for the United Kingdom! As already mentioned, if Holyrood has exceeded its competence, then it does not matter how “popular” the legislation is – it is ultra vires and cannot stand. For my part, I agree with the judges in the Court of Session regarding this issue, but there is an issue on the retrospective application of the Act which flies against commonly recognised legal principles.

Ms McAlpine’s complaint is that the UKSC cannot strike down a Westminster Act. Of course, under the present constitutional arrangements, like it or not, the Scottish Parliament is a creature of Westminster legislation. The powers of Holyrood derive from the Scotland Act, and Westminster can, short of Mr Salmond making a unilateral declaration of independence, increase or decrease those powers. That is what the present debate on the Scotland Bill is about.

It might be thought indeed that it is the Westminster position which is anomalous. After all, the US Supreme Court can strike down legislation as can the Supreme Courts in many jurisdictions. The courts can, and should, act as a bulwark against unconstitutional and unfair legislation.

 


This exposes the sham of the current constitutional arrangements. Scots, increasingly, are proud of their parliament, expect it to protect them and want it to have far greater powers. It is sovereign in the eyes of the people because they are sovereign and it is they who elect it.

Ms McAlpine refers to the present arrangements as a “sham”. My trusty dictionary defines a “sham” as a “piece of pretence; something pretending or pretended to be what it is not”. The present arrangement is what it is – it is not what Ms McAlpine wants it to be. That does not make it a “sham”. And if and when the SNP get round to having their much promised referendum, we will find out what the Scottish people want, rather than having Ms McAlpine declare what that is.

 


Even if the damages legislation is not found to be in contravention of human rights law, the court may still grasp the opportunity to extend its authority over Scotland’s parliament. The 1998 Scotland Act says Holyrood laws can only be challenged if they intrude on reserved issues, breach European law or violate the ECHR. The insurers are also asking for a ruling that there is a right to appeal under common law as well – though the system is of course different in Scotland and England which complicates matters further. If the Supreme Court, in which only one of its current contingent of eleven judges is trained in and has detailed experience of Scots Law, said an act could also be reviewed on common law grounds, Holyrood’s status would be relegated to that of local council. It would open the floodgates and any law could be challenged on just about any grounds. Such a ruling would be a sort of ritual humiliation, but would we put up with it?

It is, I am sure, a political decision by the SNP to characterise the UKSC as an arm of Westminster, sitting in its “London” lair, striving to take control of Scotland’s affairs. The court has to deal with the issues put before it. Lord Hope did not ring up AXA Insurance to tell them “Between us, here is what I want you to argue before the court”. As their Lordships mentioned in the judgments referred to in the Court of Session, these issues are very difficult for the court to determine. One could easily see circumstances where a Scottish Government, of whatever hue, sought to pass a law which was abhorrent to the SNP, and where the Nationalists would be delighted for the UKSC to come to Scotland’s aid. But politically it suits for the judges to be disparaged.

As Lord Emslie said in his ruling “But if, hypothetically, a Scottish parliament were ever to legislate in a manner which could be described as a flagrant and unconstitutional abuse of power (it would be) unthinkable that the courts should have no option but to hold themselves powerless to intervene”.

It is true that there is only one Scottish judge out of 11 just now. That is because Lord Rodger sadly died and for each Scottish case heard since his death, including in fact this one, one of the judges from the Court of Session has sat along with Lord Hope to make up the second Scottish judge.

Ms McAlpine is right that any law could be challenged on any ground. But the courts would kick out frivolous or nonsensical arguments, whilst applying full and rigorous analysis to serious cases. If the UKSC rules against the legislation, this would not be a “ritual humiliation” but a decision that the Parliament has gone wrong. We have had devolution since 1999. How many Acts have been declared invalid since then? If Ms McAlpine’s thesis is to be accepted, then this would have been a common event, even if only since the SNP took over in 2005. It has not happened. The decision in the AXA case will not leave Holyrood left akin to a “parish council”.

 

Alex Salmond v Lord Hope...or is it AXA Insurance v Scotland...


This is a David and Goliath clash, whatever angle you view it from. It should not be a party political matter. Kenny MacAskill, the justice minister has said the Asbestos Damages Act was the piece of legislation he was most proud of in the SNP’s first term in office. It had support right across the Labour movement and from industrial injuries lawyers such as the late Frank McGuire whose contribution fighting for justice was marked in a motion by Labour’s Johanne Lamont just this week.

It is interesting that a battle between on one hand insurance companies, and on the other, the Scottish Government is classed as a “David v Goliath” affair. I suspect that Ms McAlpine wishes to classify the UKSC as Goliath, and the plucky SNP as David. In either event, this is a gross distortion.

As mentioned above there is an argument about the payment of compensation to people “suffering” from a symptom free condition. If this was a situation where the law was created to allow payment of compensation for asbestosis or mesothelioma, that would be entirely different. But that is not what this Act is about. It relates to pleural plaques.


Ironically, the Surpreme (sic) Court challenge also comes at the same time as the 40th anniversary of the Upper Clyde Shipbuilders work in, which was commemorated in the parliament last week. UCS played a considerable role in boosting the campaign for Scottish Home Rule that gained momentum from the early 1970s.

Here we come to the nub – this, in the same way as UCS in the 1970’s, is being used by SNP politicians paying little or no attention to the legalities and realities of the argument, in a Scotland – good; London – bad argument. As I said at the start, this would be bad enough from a journalist, but far worse when coming from a Parliamentarian.

The remarkbale and greatly missed Jimmy Reid and the UCS workers

 

It was believed a parliament in Scotland would protect shipbuilding and the men who worked in the yards. Four decades later, it is appropriate that the casualties of that industry should be central to a battle over where power should lie.

The “casualties” referred to are not suffering. The issue is whether the Scottish Parliament went beyond the rules which govern its competence. The UKSC Justices will declare their decision on this on Wednesday.

It would be interesting to see what Ms McAlpine’s reaction would be to an order from the European Court that an Act of the Scottish Parliament was invalid – how would that square with her declarations of the people’s sovereignty?

 

Conclusion

For the avoidance of doubt, as lawyers are prone to say, I am happy that the Scottish Government legislated to make compensation payable to pleural plaque sufferers, as people with that condition had been so entitled for 20 years prior to Rothwell.

I have always been on the side of the “wee man” against the “big business”. But that is not the issue here.

We have a prominent politician and writer disregarding the facts for political purposes. I do not suggest that Ms McAlpine has written her piece having decided to ignore the truth which she knows. Instead she has written it, I can only assume, without having ascertained the full position.

It just goes to show that the standard of writing and comment on legal matters in Scotland, whether by press of politicians, is woeful, and I fully expect that the decision on Wednesday will do nothing to change that view.

 

 

 

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Filed under Civil Law, Courts, Damages (Asbestos-related Conditions) (Scotland) Act 2009, Damages Claims, General Scots Law Rambling, Human Rights, Politics, Press, The Scottish Ministers, UK Supreme Court