Stage 3 hearings were originally conceived as streamlined disposal proceedings, designed to address simple, straightforward arguments. However, as I’ve experienced over the last five years, with Courts increasingly encountering more complex and nuanced arguments.
In some instances, this complexity necessitates detailed and constructive submissions, including reliance on relevant case law. There are still occasions where disputes can be resolved by drawing on legal principles that are not modern. In one recent matter, for example, I successfully advanced an argument on behalf of a defendant to defeat a claimant’s £4,200 bicycle claim by relying on case law dating back to the nineteenth century.
The Stage 2 negotiations
The Claimant advanced a claim for £4,200, said to represent the cost of replacing a carbon‑fibre road bicycle. The basis of the claim was an expert report suggesting that it was “more likely than not” that the structural integrity of the carbon frame had been compromised, but recommended a ‘non-destructive test’ to determine if that was the case or not.
In the stage 2 pack, the Claimant invited the Defendant to pay for the non-destructive test, but by this point the Claimant was on the litigation slide towards a stage 3 hearing, with no return save for settlement.
The Stage 3 hearing
The claim for the bicycle immediately drew judicial scrutiny. The District Judge expressed surprise both at the value of the claim and at the limited amount of supporting evidence, noting in particular:-
- There was no explanation as to why further testing had not been undertaken
- The report did not identify the age of the existing bicycle
- There was no evidence as to its specification or pre‑accident value
My opponent made the analogy that the bicycle’s frame was akin to a motorcycle helmet. There was no way to know whether the structural integrity was compromised, and whether it was sensible to replace it in full.
My submission was the proposition that the Claimant’s position was untenable because it was not in keeping with the principles set out in McGregor on Damages. In particular, I referred the Judge to the case of The Gazelle [1844] 166 ER 759, which the Judge quite quickly identified as being about a boat. I said the following quote:-
“If that party derives a greater benefit than mere indemnification incidentally, it arises only from the impossibility of otherwise effecting such indemnification… which the law will not place upon him.”
I submitted that the Claimant could have had a legitimate claim for the cost of a brand new bicycle because such bicycles do not have a second hand market like motorvehicles (as per Bacon v Cooper (Metals) [1982] 1 ALL ER 397).
I argued that betterment was only appropriate when it was completely unavoidable. If there was no such market, and carrying out a repair was impossible, the claimant would be able to go down that route. However, I said that the claimant quite clearly failed on that issue because it did not undertake the non-destructive testing. It was clearly recommended by the engineer to ensure that the carbon frame was not compromised, and because no testing was done, there was no way the Claimant could prove it was impossible.
I referred the Judge to the Court proceedings pack, which showed that the Claimant had requested that the Defendant pay for the testing. I said this was too late and that the Claimant should have done so sooner. I also said that costs weren’t an issue because the Claimant had the right under the pre-action protocol to request an interim payment, which the Defendant could not refuse if a medical report was uploaded.
The Judge, in his Judgment, found that the court had not reached the point in the analysis that the repairs were impossible, as the Claimant did not fulfil the initial requirement. Since there was no evidence that repair was impossible, the claim was considered a claim for betterment. As a result, the £4,200 replacement claim was dismissed, and recovery was limited to the £700 repair cost suggested by the Defendant and included in the Court Proceedings Pack.
Concluding remarks
The doctrine from ‘The Gazelle” reminds us that damages law is based on indemnity, not opportunity. A Claimant cannot circumvent the acquisition of evidence or practical steps like testing or repairs for a better outcome disguised as necessity. Betterment is only allowed when truly unavoidable, not for convenience or lack of investigation.
Given the prospective outcome of having what appears to be a significant windfall (a legitimate windfall nonetheless), it is important that Claimants appropriately demonstrate that it is impossible to avoid betterment. .
It is also important for Claimants to demonstrate that there are no second-hand markets available to support the proposition that they should receive a substantial sum of damages, rather than lower damages subject to diminution in value.
Information
Alec Hancock is a practising Barrister at Magdalen Chambers in Exeter. For instructions on matters, please contact Magdalen Chambers via clerks@magdalenchambers.co.uk or by telephone on 01392 285 200.
