Thomson v Berkhamsted Collegiate School

This is an application for orders to be made ancillary to the hearing of a third party costs claim made by the defendant school against the non-parties who are hereafter referred to as the interested parties. It is first appropriate to set out the background to the litigation in which the costs application arises.

On 16^th March 2009, some two weeks into the trial, the claimant, John Thomson, discontinued his claim for damages for injury, loss and damage caused to him through the failure of the defendant, his former school, to take proper measures to prevent him from being bullied. The claimant was born in July 1985. He attended the defendant’s school from September 1994 to June 2002. From the autumn term in September 2001 through to the spring of 2002 representations were made on various occasions by John, then aged 17, and his parents, with whom he lived, to teachers and governors at the school complaining of actions by other pupils and the failure of staff to take any sufficient action in respect of it.

The proceedings that were discontinued on the 16^th March 2009 had begun by writ issued on the 29^th June 2006 and Particulars of Claim dated the 24^th October 2006, whereby damages were claimed for negligence alleged between the years of 1996 to 2002.

The solicitors acting for the claimant in those proceedings were Linder Myers. They were instructed in February 2005. Before they were involved other solicitors had been instructed by the claimant and/or his parents in connection with concerns as to how the school was treating John. Those solicitors were French and Co. They had communicated with the school in connection with alleged professional negligence or personal injury since April 2002 but it appears their retainer had been terminated by both John and his parents by December 2004. Prior to that termination of retainer there had been an application for pre-action disclosure first intimated in June 2004 and made in November 2004. The application was dismissed and the Master awarded the school its costs of defending the application and payment on account of £1,500 plus VAT was ordered. That sum was paid by Dr and Mrs Thomson, the claimant’s parents who are the interested parties in this matter.

The litigation in which Linder Myers issued the proceedings was funded as regards the claimant’s solicitors, leading and junior counsel, by the interested parties. It seems that consideration had been given to funding by the Legal Services Commission at an earlier stage but no such funding resulted.

The defendant school had incurred substantial costs, estimated to have been in excess of £250,000 in defending this action, which they say was wholly misconceived and at the highest would have depended upon facts as to the treatment which the claimant had been subjected which he was unable to prove in his evidence and there was no other material evidence called upon on his behalf to establish that treatment. His father and mother were witnesses on his behalf but on analysis of their evidence it was by and large hearsay evidence, repeating allegations which they say had been made to them by John. By the time the case had been discontinued it was apparent there were substantial problems with respect to any additional evidence that Dr Thomson could give as to John’s treatment.

The defendant intimated on the 16^th March 2009 that it was proposing to seek an order for costs against the third parties, pursuant to Section 51 Supreme Court Act 1981 and CPR 48.2.

On 20^th March 2009 the court ordered that the claimant do pay the defendant’s costs for the action to be the subject of detailed assessment if not agreed. As the claimant’s own case was that he was rendered unemployed and unemployable as a result of the defendant’s negligence during his school years there is no reasonable prospect that he will be able to meet these costs from his own resources. On the same date the interested parties were joined as defendants to these proceedings for the purpose only of costs pursuant to CPR 48.2. The court then gave some directions as to pleadings for the grounds of the application and resistance and for the application to be listed before me in due course as the trial judge.

Already on that date, counsel for the interested parties appearing through their own solicitors, Irwin Mitchell, contemplated that there may be issues as to disclosure of material documents in the application and the question of legal professional privilege. That issue has loomed large in the written submissions made in support of this application pursuant to the directions given on the 20^th March 2009 and after.

On the 30^th June 2009 the defendant sought orders of the court requiring Dr and Mrs Thomson to file and serve disclosure statements setting out correspondence between them and Linder Myers and any solicitor previously instructed by either them or the claimant in relation to the subject matter of these proceedings, any correspondence between Dr and Mrs Thomson and any expert or counsel instructed in these proceedings, attendance notes recording meetings, telephone conversations and other dealings with Dr and Mrs Thomson and any solicitor action in relation to the subject matter of these proceedings. Orders were also sought against the claimant with respect to disclosure and any claim that he may make of legal professional privilege. At that time his solicitors Linder Myers were on the record as representing him and it was anticipated that it would be those solicitors who would prepare the relevant documents and the costs of doing so would be met by the losing party in this application.

Skeleton arguments have been served by both counsel for the defendant and the interested parties on the principles which should govern any application for costs pursuant to section 51 and on the sub-issue, the subject of the present application as to whether disclosure should be ordered and how the court should deal with any claim for legal professional privilege that may arise in the course of disclosure.

On the 21^st September 2009 the court heard oral argument on the question and indicated that it would make orders reflecting part of the applications sought by the defendant with reasons to follow. The reasons for that order are given in this judgment.

The substantive costs application is governed by CPR 48.2 that requires little by way of procedural formality for the determination for such applications other than the service of the funding party as parties to the application. It is reasonably plain from the case law summarised in the notes in the Civil Practice 2009 to this part of the CPR that what is intended is a summary procedure for the determination for such an application.

No formal procedure is set out for applications for disclosure, cross-examination, service of skeleton arguments and the like. In my judgment this is because any orders that the court considers necessary are made in accordance with its discretionary judgment in pursuit of its inherent jurisdiction having regard to the over-riding objective and the intended summary nature of the proceedings. However, summary proceedings are not a term of art, and such a description is not inconsistent with whatever other orders the court might consider necessary to expeditiously and fairly determine the substantive issue.

Thus it would seem that a hearing of some two days where cross-examination may be ordered is not inconsistent with such proceedings: see PR Records Ltd v Vinyl 2000 Ltd and Ors [2007] EWHC 1721 Chancery, 18^th July 2007 a decision of Mr Justice Morgan at [40]. See also Grecoair Inc v John Tilling and Ors [2009] EWHC 115, Queen’s Bench 14^th January 2009 decision of Mr Justice Burton, [42-52]. It is equally plain from those cases that the court has power to exercise disclosure orders in order to facilitate in an economical fashion a fair hearing of the application, although disclosure is often made without formal order.

By the end of the hearing in the present matter, the parties were agreed that I had jurisdiction to make the order, but there were competing submissions as to the issues to which I should direct myself in the exercise of my discretion, particularly on the application of the principle of proportionality in the light of the issues in the present case. I am un-persuaded that the appropriate course is to identify the nearest appropriate practice rule applicable to a full trial and add or subtract from the requirements of that rule. I consider that I should apply a high test of what is considered necessary for the fair determination of proceedings that are essentially summary in nature and should be determined speedily after the conclusion of the trial by the trial judge and bearing in mind the over-riding objective. I further recognise that the court’s powers are limited where documents are the subject of litigation or legal professional privilege, which it has no power to override. If the court decides that it is necessary and in the interests of justice to make a disclosure order, it may proceed to give a detailed order within its general powers under the CPR to remove outstanding issues that may be the source of delay and further expense if unaddressed. Such an order may include inspection of documents by the court where there is a clear issue as to whether privilege attaches to them.

Before considering whether it is necessary to make the orders the defendant seeks, or any orders, the court needs to consider when a third party costs order is likely to be made in cases of this sort. If the case is weak it is inherently improbable that an order would be made. Alternatively, if it is so overwhelming it seems unlikely that ancillary orders for disclosure, inspection cross-examination of otherwise will be considered really necessary.

For present purposes I consider that the law as to third party costs is sufficiently stated at page 1334 of Civil Procedure 2009 and the judgment of Lord Browne in Dymocks Francise Systems (NSW) PTY Ltd v Todd [2004] UK PC 39; [2004] 1 WLR 2807. I have been assisted by other references to decided cases cited by both counsel in their helpful skeleton arguments on the substantive issues. From this learning I deduce the following general principles of potential relevance to the present case:

In considering whether, in the light of the particular facts and issues in the case, disclosure is necessary for the fair determination of the application I conclude that I should consider:

Although this is a case of family funding I consider that there is strength in the defendant’s contention that this is not a case of a pure and disinterested funder who ought not to be at risk of a third party costs order merely because he has made funds available to improve access to justice without seeking to benefit from the proceedings or having an agenda of his own in respect of them. It was plain from the evidence I heard that both Dr Thomson and his wife were very upset from the autumn of 2001 onwards with the school and how it was responding to their letters and requests. It was plain that they wanted action to be taken against various children said to have been bullying the claimant, were considering taking independent legal action themselves against them, and threatened the school at an early stage with legal action by themselves. The solicitors instructed between 2002 and 2004 frequently referred to clients plural and included both the claimants and Dr and Mrs Thomson in that description. Elsewhere there are references to one or other of the interested parties referring to their case and their claim in correspondence with experts.

All in all, there is a quantity of material indicating that the parents were not merely funders but were directly concerned with the facts of the claim, and promoting the remedies that they identified at various points in the history of this matter by way of vindication of their complaints as well as what they perceived to be the damage done to John.

Further, there were a number of occasions at the trial when Dr Thomson played a very active role in answering questions in witness statements and elsewhere about the effect of the treatment on John and his earning capacity. I appreciate that the interested parties’ case is that their son was a damaged young man who needed much more assistance and support than would normally be the case in a young man of 25 at the date of trial who had successfully completed a degree at Imperial College, London. Nevertheless the fact of intervention in this litigation by the parents beyond the mere question of funding, would be important evidence upon which the defendant could rely in the eventual application to be determined in this case.

Particularly important in that context is the defendant’s submission about the evidence submitted to the court relating to a diary kept by John and Dr Thomson on his own computer about events that were said to have happened to John in December 2001 and January 2002. There was material supporting the defendant’s allegation that Dr Thomson had produced a distorted version of the diary that was made to look like the claimant’s own version but included matters different from what the claimant had originally recorded of which Dr Thomson would have had no direct knowledge himself.

I also consider that the claim was an unusual one for a number of reasons. These include the chronological extent of the bullying claimed and the school’s alleged failure to respond to it. The duration of the pleaded breach of duty was extremely broad going back way before the events of autumn 2001 to a time when John Thompson was a very young boy of nine. In my judgment, taking his evidence at its highest, there was simply nothing that could have properly founded a claim of that nature for such a long period.

The real focus of this case was his assertions as to how he was treated by his fellow students in the autumn of 2001 following in particular the events of the summer of that year after GCSE’s had been taken. It was apparent at the hearing that his own conduct towards the girlfriend of a former close friend of his was likely to be the material cause of the termination of that friendship. No physical bullying was alleged by John his evidence, and on analysis of how he said he was treated from September 2001 onwards, much turned upon the his subjective impression of how he was being treated rather than any objective narrative of a course of verbal harassment or oppression of him. This was, at its highest, fragile material on which to found such a serious claim for damages.

The damages claim itself was for a very large sum of money by way of lost earnings by reason of the fact that he is said to be unemployable and with virtually no social life. The defendant pointed out that the claimant moved to another school at 17; obtained good A level results and went to a prestigious university, Imperial College, London where he studied for a degree that is notoriously challenging to students and obtained a second class degree that was not a bad result. There were sustained challenges made by the defendant as to the credibility of the evidence of the injury and in particular the real state of his social life.

In the light of the evidential difficulties of the claimant’s case, I consider there is substance to the suggestion that this litigation was speculative as to its prospects of success. As a result I very much doubt it would have been funded if the interested parties had not made funds available from their own resources. Equally John’s parents would be aware of the quantum of costs that were likely to be caused to the defendants by the pursuit of this action, as it does not appear to be substantially different to the funds they made available to their son.

This appears to me therefore to be an application for third party costs that has reasonable prospects of success on the merits applying relevant guidance from the decided case law to the courts broad exercise of discretion.

However, despite the above, this is an application that does traverse new territory in some respects. This is not a case of a commercial funder or a private or corporate entity that may be regarded as the alter ego of the litigant who was ordered to pay costs. The prospect of John securing a large amount of damages as a result of this litigation would not necessarily directly have benefited the interested parties by putting assets into their own pockets. The hope for improvement in John’s mental state by a successful outcome of this litigation may well be doubted to be an interest of the interested parties own of a kind comparable to financial benefit.

It would, therefore, appear that in so far as either benefit or control was a necessary factor before an order is made (see [18] (iii) above), the defendant’s best prospects of success would turn upon the extent to which it can point to evidence of control and decision taking in respect of these proceedings.

Although the defendant has evidence of the intervention of the interested parties and the extent to which they regarded the cause of legal action against the school their own for the period 2002 to 2004, such material is less prominent for the period after the instruction of Linder Myers in February 2005. Thereafter the inter partes correspondence indicates that the claimant’s solicitors were careful to always refer to their client as the client alone, in contradistinction of the approach to the previous advisers,

It is the costs of the litigation brought by Linder Myers with which I am principally concerned, although it will be for the detailed assessment process to determine if any of the costs incurred before the issue of the Claim Form are properly recoverable. Certainly the costs that might be awarded against the interested parties could be no greater than the costs the claimant is bound to pay.

The defendant submits that it can only demonstrate the element of control, interference, and assumption of responsibility in the litigation if it knows what communications the interested parties have had with the solicitors, counsel or expert witnesses in the case. In my judgment, such material, if it exists, is likely to be relevant, and depending on volume, timing, and substance, may well be highly probative of the central disputed issue in the application. It has never been suggested that there was no such correspondence, although the interested parties state that they have no records of written or electronic communications in their possession.

However, the case for disclosure is much stronger with respect to the period when Linder Myers were acting for the claimant from February 2005 onwards. I doubt whether the defendants would need details of the correspondence with the earlier solicitors given the evidence that already exists about the parents’ interest and relationship to the issues those representatives were exploring. Restricting the period reduces the scale of the disclosure sought and the practical difficulties that may be encountered in obtaining it if the request were limited to the period, February 2005 to 16^th March 2009.

At this point, the court then has to consider whether all such communications are so likely to be the subject of legitimate legal professional privilege as to make the deployment of resources in obtaining discovery futile. The claim to privilege has been made by the claimant personally and not by any solicitor acting for him with knowledge of the material. The solicitors acting for the interested parties are not in possession of the material and not able to make any submissions on whether privilege does in fact apply. The claim seems to be a blanket one in respect of the entirety of the documents sought. There has been no detailed list of documents. No professional lawyer has asserted the existence of privilege after considering the documents and no explanation has been made as to why privilege might exist at all or in respect of all the documents the defendant seeks.

Having regard to the general principles as to when legal advice or litigation privilege arises, in my judgment, it would not normally exist in communications between a solicitor and a third party to the claim that were not immediately connected with the witness statement of that third party or the giving of legal advice to the claimant.

Communications between the interested parties and any expert witness instructed on behalf of the claimant such as a psychiatrist, psychologist, or educational expert would not normally attract litigation privilege applying general principles.

There may be a distinction between the communications between the interested parties and Linder Myers that were done on John’s behalf strictly as his agents at a time when he was too distressed or distracted from giving instructions to his solicitors, and more direct communications from the parents themselves. It would seem that only an analysis of the documents could distinguish the two circumstances if a claim was made in that regard.

If, as the defendant suspects, there may be material indicating that the interested parties were giving instructions on their own account and without any apparent reference to John’s requests, that could be highly probative material in this application which would not generally be considered to be within the scope of legal professional privilege. Certainly, the interested parties could not claim it as their LPP as they dispute that they were the effective party behind this litigation.

I accordingly reach the conclusion that on the information presently available to the court, there may well be material relevant to the determination of this application included within the class identified in revised paragraph one of the court’s order herein, that would not be the subject of legal professional privilege and therefore should be the subject of both the disclosure by list and inspection by the defendant thereafter.

I now turn to consider the position of the claimant himself. He is in an odd position. By reason of the court’s order of the 20^th March 2009 he faces a very substantial bill of the defendant’s costs that he is wholly unable to meet. He is therefore in peril of bankruptcy that would doubtless further complicate his fragile mental state as revealed in the distress he showed when giving evidence in court, as well as his ability to get on with a career for himself.

On the 19^th March 2009 he signed a form of authority authorising his solicitors at Linder Myers to authorise any client care documents or other documents requested to be disclosed to his parent’s solicitors acting in the present proceedings, Irwin Mitchell. It does not appear that Linder Myers disclosed any such documents to Irwin Mitchell pursuant to that authority because the court has had its attention drawn to a letter of the 6^th April 2009 saying that firm was unaware of the formal authority signed by John and when he discussed the matters with John he only had instructions to disclose a copy of the retainer letter with a CFA with the strict understanding that the documents should be disclosed to Irwin Mitchell alone.

The letter stated that the solicitor was not instructed by John to provide such documents. If matters had been disclosed to Irwin Mitchell for the purpose of defending these costs proceedings by John it is difficult to see that any legal professional privilege would prevent them being deployed in these proceedings or being made the subject of disclosure by list. However, if there has been no such disclosure then despite John’s apparent willingness to sign a letter of authority on the 19^th March 2009, he has subsequently changed his mind.

The defendant is suspicious that any such change of mind may have been induced by the perception that it may not be in the interests of his parents for this material to come to the court’s attention. The defendant understands that John was living at home at this time.

In the course of communications between the court and the parties by way of proposed directions and directions for the progressing of this case, the court invited John to waive any legal professional privilege that he may have in any of the documents that the defendant seeks disclosure of in order to reduce costs, in order to expedite the hearing and remove a sub-issue in the application. On the 10^th August 2009 John wrote a letter addressed to me that was subsequently circulated to the parties as in respect of the request to waive privilege says as follows:

“I will have to politely decline as I have no idea what that would do to my costs as I do not understand the legal obligations.”

It appears that at the time of this letter John had dispensed with the services of Linder Myers who had come off the record in July 2009. That is unfortunate as the defendant’s application makes it plain that any costs incurred by John or his solicitors in listing documents that the solicitors must have or have had in their possession of the class corresponding to paragraph 1 of the court’s order would be paid for by the successful party in this application, and would not fall on John or Linder Myers. If the defendant’s application does not succeed then the only person liable to pay their costs is John himself personally. If John makes a claim to legal professional privilege in respect of the communications by his parents with his solicitors that are not covered by legal professional privilege as the court infers a number of such documents may not be, he will have raised a false issue contributing to further costs in the resolution of this matter.

Mr Wignall for the interested parties that it would be disproportionate for the court to make the orders requested with the consequences of a difficult problem as to how LPP could be determined and the defendant’s application should rest upon strengths or deficiencies of the material as it presently remains. Mr Miller, for the defendant, submits that it is not open to the interested parties to raise the spectre of satellite litigation and dis-proportionality of the cost of complying, if they do not help themselves by the simple expedient of requesting from Linder Myers all the documents referred to that they must have readily be able to disclose.

It is submitted that there is nothing inconsistent with their obligations to the claimant preventing his solicitors from giving copies of correspondence they have had with the parents. If some of that correspondence did indeed clearly relate to the taking of a witness statement to which litigation privilege would undoubtedly attach it is the solicitors who could most speedily and economically say so. A court would not normally gainsay their expert assessment of the nature of the materials held.

Allied to this unwillingness to seek copies of documents of which they were either authors or recipients, the defendant is sceptical of the information that the interested parties have retained none of the documents themselves, whether in a trial bundle format, copy correspondence format, or electronic format on their own computer. Certainly, when he gave evidence, I was impressed with the knowledge of the trial bundles and the detailed procedural history that Dr Thomson demonstrated in his testimony. It was also the case that a number of significant documents had been created by him on his computer, as had letters and representations to various people at various times. It is very surprising that within a short period of time of being on top of this material, the interested parties are telling the court through their solicitors that they have no copy in any form of it. The court has not been informed as to when or how or why they ceased to have access to this material.

I am conscious that when John Thomson was last seen in the witness box he frequently broke down in tears and was psychologically fragile, and that was the reason why his treating psychiatrist recommended to his legal team that he discontinued the proceedings. The order that the defendant seeks is that he disclose his documents, as the interested parties claim not to be in possession of their own copies. The court would not seek to impose an onerous obligation on a vulnerable young man, but recognises that there is strength in the defendant’s submission that all he needs to do is instruct his solicitors to go through their files and abstract the relevant documents, list them and either permit inspection or make a specific claim to privilege. This should not impose any onerous obligation on John at all. Given that both he and his parents could obtain the documents from Linder Myers there would be a reasonable suspicion that failure to adopt such a simple course would be evidence of an obstructive intent.

In the circumstances I conclude that there is a good arguable case for a third party costs order; that the correspondence sought is likely to be probative and not privileged, at least not in its entirety; and that it is not disproportionate for the material to be sought, at least for the period from February 2005.

In my judgment it would be unjust for the defendant to be deprived of the use of such material in pursuit of its application if it proves to be probative and admissible. This is not a fishing expedition, but a pertinent inquiry in the light of the history revealed above.

It is in no one’s interests to delay the determination of this application for longer than strictly necessary, or to raise false objections, the resolution of which causes further time and expense. My assessment is that with good faith, a method can be found with the co-operation of Linder Myers at the expense of the unsuccessful party in this application that will enable me to know whether there is a credible claim to LPP in respect of a particular document or group of documents falling within the terms of the order. For that to happen the particular documents would need to be individually dated and identified if that is practical or reasonably explained why it is not. Some information must be given as to the subject of the correspondence and the basis of the claim to privilege to see whether it falls into a clear category, no category at all or a debatable category of privilege.

The court will then assess the position for itself upon expiry of the time for compliance with these orders and recognises that it may need to inspect documents referred to by either the claimant or the interested parties to ascertain whether LPP exists in respect of a disputable claim. I recognise this means that the court may see documents that it will have to subsequently disregard in its assessment of the issues, if they turn out to be privileged. An economic and efficient way of determining this application permits for no other method. It would not be appropriate to send these documents to another judge to determine since the responsibility for determining this application falls with myself. If a judge is not precluded from determining the application by reason of any strong comments he may have made during the trial, I do not consider that he would be disqualified by reason of having had to inspect documents to determine the issue of privilege.

The court will also be anxious to ensure that this process does not generate opportunities for further disputes and further contested applications before it that would frustrate the object of listing the substantive application in early December for final resolution. Although the court has thus looked ahead to the inspection itself as the necessary means of expeditiously resolving contested issues if they arise, it has not yet decided it will necessarily take that course. Depending upon on the material provided in response its orders, the court will reach a judgment on the papers in due course. Parties claiming privilege in documents under their control, will have to be in a position to deliver such documents to the court for its private consideration forthwith if so ordered.

By contrast, a failure to comply with these orders, or to adopt simple expedience in good faith to enable the court to have the information that it considers relevant to the fair determination to this application, is likely to lead the court drawing very strong inferences against the party in default.

I therefore decided that I should make the orders outlined on the 21^st September and subsequently perfected. I have reserved the costs of this application to itself and that will receive further consideration in due course.