Drew Malone v Birmingham Community NHS Trust [2018] EWCA Civ 1376 (19 June 2018)

 

The Court of Appeal overturned an earlier judgment in the case of Malone v Birmingham Community NHS Trust. The Judges considered the proper construction of a CFA and ruled that the CFA was not limited to the Defendant named in the document itself.

 

By way of background the Appellant Claimant was a prisoner at HMP Birmingham. He claimed that whilst in prison there was a negligent failure between August 2010 and January 2011 to diagnose that he had testicular cancer. At that time the prison was operated by the Ministry of Justice but health care services were provided by two NHS trusts, Birmingham Community NHS Trust (the Respondent Defendant) and Birmingham and Solihull Mental Health Foundation Trust.

Initially there was uncertainty over the correct tortfeasor.  The Claimant’s Solicitors corresponded with both the prison and prison medical authorities concerning the claim, but there remained some uncertainty about the body which had been responsible for the Claimant’s medical care. The Claimant personally signed the Claim Form and Proceedings were issued naming all three potential Defendants. Eventually the Birmingham Community NHS Trust acknowledged that it was responsible for the Claimant’s treatment. Accordingly only the Birmingham Community NHS Trust was served with the Proceedings and the other Defendants were removed. The claim settled for £10,000 plus costs.

After conclusion of the matter dispute arose regarding the CFA and costs liability under the same.

The CFA signed by the Claimant contained the following wording:

“All work conducted on your behalf following your instructions provided on [sic] regarding your claim against Home Office for damages for personal injury suffered in 2010.”

On the Detailed Assessment the Defendant asserted that no costs were payable to the Claimant because the only potential Defendant named in the CFA was the “Home Office” and the CFA was accordingly limited to a claim against the Home Office/Ministry of Justice. It did not cover a claim against a health trust, such as the Defendant.

District Judge Phillips, the regional costs judge for Wales, held that as a matter of construction the CFA did not cover a claim against the Defendant and so no costs were recoverable, a decision upheld by His Honour Judge Curran QC.

On appeal the question was whether the wording limited the scope of the CFA to a claim against the Home Office/Ministry of Justice.

The Defendant contended that the CFA makes a positive choice to specify the Defendant as the “Home Office”.

The Claimant argued that the reference to Home Office was made to simply identify the instructions which had been received.

Lord Justice Hamblen, giving the lead appeal judgment, noted the “poor-quality drafting and little attention to detail” in the CFA, however he said the construction of the CFA should be put in context and was consistent with being “descriptive rather than prescriptive”.

He referred to the guidance provided in the last year Supreme Court decision in Wood v Capita Insurance Services and said that “interpretation of such an agreement is likely to call for more emphasis on the factual matrix and contextual considerations and less principal emphasis on close textual analysis”.

He added: “It was and is accepted by the Defendant that the reference to “Home Office” was a misnomer and that it should be treated as referring to the government authority responsible for HMP Birmingham, the Ministry of Justice.”

Further Lord Justice Hamblen said: “If the intention had been to define and limit the coverage of the CFA to claims against a particular defendant, greater care and precision would be expected and, in particular, one would not expect the named defendant to be an entity which was obviously inappropriate.”

The Judge continued: “The CFA was entered into at an early stage and before proceedings were commenced… It is therefore in neither party’s interest to seek to impose strict definitional limits which may exclude foreseeable work, particularly, as here, at an early and embryonic stage of a claim.”

In conclusion Lord Justice Hamblen allowed the Appeal on the basis that “both textual and contextual considerations lead to the conclusion that the CFA is properly to be construed as not being limited to a claim against the Home Office/Ministry of Justice.”

The judgment contains important observations on how Conditional Fee Agreements should be construed. It also shows that a little more care and attention should be taken at the CFA stage.

This is an unusual judgment for a couple of reasons :

• A CFA is a contract and the terms therein ought to be clear. In this case the identity of the tortfeasor was wrong (a) because the entity “Home Office” is a misnomer and (b) “The Home Office” was not ultimately liable. These are 2 reasons why the Court might have supported the lower Courts who found against the Claimant. The lower Courts Judges took a contractual view of the CFA (arguably the correct approach) whereas the Court of Appeal have bypassed that kind of approach in order to achieve a fair outcome.

 

• Whilst this is by definition a fair outcome and a policy decision, it is rare that Court’s go out of their way to favour the party who is at fault (in this case the Claimant whose solicitors could have and should have taken more care when completing the CFA).

This case is an example of the Court finding a way of ensuring that the “least unfair” outcome is achieved. To achieve this, the Court has had to allow the law of equity to pull rank on the law of contract.

Tanya Bland & Guy Platt-Higgins