Teviotdale v Norwich Union Insurance Limited ? Dumfries Sheriff Court, 23 June 2009

Following a Proof in a Small Calim action, the Sheriff found in favour of the Pursuer and granted Decree for just under £1,000. He was addressed in the question of expenses and found the Defenders liable to the Pursuer in expenses as assessed in the Summary Cause Scale on the basis that there had been unreasonable conduct on the part of the Defenders. The Defenders appealed the decision in relation to expenses. The Pursuer dad claimed damages following an accident. Quantum had been agreed and the Proof was restricted to liability. The Pursuer maintained that she had been driving into a parking space when the Defenders' Insured had reversed at speed and collided with her vehicle. The Defenders' position was that, while their insured had been reversing into the parking space, the Pursuer had tried to drive into the same space and had caused the collision. They claimed that the Pursuer's car had not been in the vicinity when their insured had started his reversing manoeuvre. The Small Claims (Scotland) Order 1988 as amended by the Small Claims (Scotland) Amendment Order 2007 sets out the expenses that are recoverable in a Small Claim action. Section 36B of the Sheriff Courts (Scotland) Act 1971 sets out a number of exceptions to the rule limiting recoverable expenses in a Small Claim. One of the exceptions is where there has been “unreasonable conduct” on the part of a party. The Sheriff had recorded that the Pursuer and her witness had travelled from Liverpool to the Hearing. Her evidence had been supported by her witness. The Defenders' Insured had explained that he had driven out of the parking space to allow another car to leave its space. He then tried to reverse back into his space, and collided with the Pursuer's car. He admitted that he had not seen the Pursuer's car when he was reversing as it had been in his blind spot. One of the Sheriff's key considerations had been that the Insured had never seen the Pursuer's car enter the car park. He had suggested in evidence that the Pursuer must have driven into the car park too quickly but that had been simply speculation. After the evidence had been heard, both agents had provided the Sheriff with diagrams showing how the accident had occurred and these had been substantially identical. The Sheriff had found that the Defenders' Insured was at fault as he had a duty of care to keep a proper lookout for other vehicles and he had not seen the Pursuer's vehicle. There had been no contributory negligence. The Defenders' behaviour had been unreasonable as they had allowed the matter to proceed to a proof without making any offer to settle. For there to have been any reasonable hope of the Insured's account succeeding, there would need to be clear evidence that the Pursuer had been driving too fast but there had not been evidence to support such a conclusion. As an insurance company with experience in road accident claims, the Defenders should have realised the difficulties their Insured faced as he had been the one reversing in the car park. There were also steps that the Insured could have taken to avoid the collision. In all the circumstances there had been a very strong likelihood that the Defenders would not succeed in their defence based on the information they had about the accident. It would have been prudent for the Defenders as a commercial organisation to have taken steps to limit their exposure to a motion for expenses on the Summary Cause Scale, perhaps by making an offer to settle, at least on a pragmatic basis. The fact that they had not done so was unreasonable conduct. At the appeal, the Defenders provided two documents, which had not been available to the Sheriff – a copy of the insured's claim form and a telephone attendance note relating to a conversation with the Insured. It was argued that there had been enough information to allow the Defenders to defend the claim. They had been entitled to go to Proof and to make the Pursuer prove her case. It was suggested that the Insured's evidence about not having seen the Pursuer's car as it had been on his blind spot was not consistent with the information he had given the Defenders. The Defenders had been acting in good faith. It was also submitted that it was the Insured's conduct and not that of the Defenders that should be considered. The Sheriff Principal decided that the Sheriff had been correct to consider the conduct of the Insurers as the party to the action rather than the conduct of the Insured. He took the view that the Sheriff's decision was one that he had been well entitled to make in light of the information available to him. There had been clear evidence of fault on the part of the Defenders' Insured and their conduct in failing to negotiate a settlement had been unreasonable because this information had been available to the Defenders during the course of their investigation. The Sheriff Principal refused the Pursuer's motion to certify the appeal as suitable for the employment of Counsel.