Negative Declarations - Useful Tool for Defendants in Disease Litigation?

In the High Court case of Jewel Ahmed Toropdar v D (A Minor by the Official Solicitor as his Litigation Friend) (2009), the injured party and would-be claimant (D), who became the defendant for the purposes of this action, was only 10 years of age when he was struck by a car being driven by Toropdar, as a result of which he sustained catastrophic brain injury. Although D had made his intention to bring a claim against Toropdar clear, it was not known when this would be pursued. Thus, given the limitation period applying to minors, Toropdar might have a potential claim hanging over him, and his insurers would be obliged to hold open their (presumably substantial) reserve, for many years. 

 

In December 2006, therefore, Toropdar, through his insurers, started proceedings for a declaration that he was not liable to D for personal injuries and consequential losses arising from the accident. The claim was transferred to the High Court by consent in October 2007 and during a subsequent case management conference, Master Foster declined to order that there be a preliminary trial on the issue of declaratory relief. However, in March 2008 permission to appeal was granted on the basis that the matter concerned a novel point which enjoyed a realistic prospect of success, the appeal being heard by Mr Justice Christopher Clarke in the High Court on 9^th and 10^th February 2009.

 

On the facts of the case Toropdar failed to obtain declaratory relief, predominantly on the basis that his speed was held to be excessive, given the road conditions at the time of the accident. However, one of the questions which was considered, obiter, was whether it is ever right to make a negative declaration in a personal injury case. 

The principle governing the concept of declaratory relief is very succinctly detailed in Part 40.20 of the CPR which states:

 

 

In Toropdar, Mr Justice Clarke also pointed out that to grant declaratory relief was in line with the overriding objective set out in Part 1.1(2) of the CPR.       

 

 

One of the earliest cases to consider the issue of declaratory relief was Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd (1921) in which Lord Dunedin stated, “the question must be a real and not a theoretical question” and “the person raising it must have a real interest to raise it”. In essence, this means that the applicant must show that there is a real chance of an action being brought against them by the injured party.

 

The leading authority is the case of Messier-Dowty Limited and others v Sabena SA and others (2000), in which Lord Woolf considered, “where a negative declaration would help to ensure that the aims of justice are achieved the courts should not be reluctant to grant such declarations.” He was cautious, however, and expressed the view that, “while negative declarations can perform a positive role, they are an unusual remedy in so far as they reverse the more usual roles of the parties … This can result in procedural complications and possible injustice to an unwilling ‘defendant’. This in itself justifies caution in extending the circumstances where negative declarations are granted”.

 

Neuberger J concluded in Financial Services Authority v Rourke (2002), “It seems to me that, when considering whether to grant a declaration or not, the court should take into account justice to the claimant, justice to the defendant, whether the declaration would serve a useful purpose and whether there are any other special reasons why or why not the court should grant a declaration”. 

 

 

Although Mr Justice Clarke agreed in Toropdar, that there was an entirely legitimate reason for both the claimant and the defendant to seek the court’s decision on whether Toropdar was liable to D, he concluded that “such a course is and should be unusual”. The court’s decision is binding on the parties, as with any other claim and, as such, the court always has been, and remains, cautious when considering whether to use its discretion to make such declarations. Indeed, instances where the party seeking the declaration succeeds are few and far between. 

 

On the face of it, it is for the injured party to decide whether or not to make a claim or to start an action against the alleged wrongdoer and to run the risk of an adverse costs order. Thus, despite the court’s stated view that giving short shrift to declaratory relief applications is an outdated approach, it certainly seems somewhat reluctant to grant them. Liability issues would, therefore, have to be very clear-cut to have a reasonable chance of obtaining a declaration.

 

Insurers should take note: the court is unlikely to entertain a request for declaratory relief if the parties are in unequal bargaining positions and if the evidence is incomplete. The parties must be in a position such that they are ready to proceed to trial. 

 

That said, Toropdar has highlighted a potential mechanism for bringing to an early end personal injury claims which might otherwise be hanging over insurers for a considerable length of time.   

 

Laura Collins, Solicitor in the Casualty Unit at Langleys Solicitors.