Circumventing the Principle of Finality: The Applicability of Rule 3.1(7) CPR

Raghav Trivedi, an advocate based on the Midlands Circuit, analyses the decision of Simmons v City Hospitals Sunderland NHS Foundation Trust [2016] EWHC 2953 (QB) and its potential impact upon the Court’s power to revoke or vary orders.

In Simmons v City Hospitals Sunderland NHS Foundation Trust [2016] EWHC 2953 (QB), a clinical negligence case, the High Court held that the Defendant was entitled to vary an order by which judgment had been entered by consent based on admissions. This was an application made under Rule 3.1(7) CPR, and with the High Court applying the established test from Ladd v Marshall [1954] 1 WLR 1489, it allowed the order to be varied and the admissions to be withdrawn.

Facts and Submissions

The Claimant was admitted to hospital on 18 October 2009 for an emergency caesarean section and was discharged on 20 October 2009. Unfortunately, the Claimant’s wound did not heal and, on 6 November 2009, the Defendant took action to treat the wound through surgery, diagnosing the Claimant with necrotising fasciitis. This did not resolve the problem and the Claimant underwent six further operations during November 2009. Despite being discharged from hospital, the Claimant went on to develop a recurrent incisional hernia which had resulted due to the repeated operations she had undergone. The Claimant therefore required further surgery in September 2011 and a diagnosis was made of pyoderma gangrenosum. On 12 October 2011, the Claimant also developed pulmonary embolism.

The Claimant issued legal proceedings, alleging negligence by the Defendant’s staff. The Claimant contended that the diagnosis of necrotising fasciitis should have been made sooner, the result of which would have been that the necrosis would not have spread and the Claimant would not have undergone repeated surgery. In those circumstances, the Claimant contended that she would not have developed incisional hernia, pyoderma gangrenosum and pulmonary embolism.

The Defendant admitted that necrotising fasciitis ought to have been suspected earlier and, had it been diagnosed then, the Claimant would not have suffered a further progression of that condition but would have undergone surgery which would have prevented further necrosis and avoided the incisional hernia. The Defendant did not admit that its negligence had caused the subsequent pyoderma gangrenosum or pulmonary embolism.

The Defendant’s solicitors instructed an expert dermatologist in August 2015 to deal with the remaining issue of causation of the pyoderma gangrenosum and pulmonary embolism. She gave a preliminary opinion in September 2015 expressing the view that the original condition diagnosed as necrotising fasciitis in November 2009 might have actually been an earlier occurrence of pyoderma gangrenosum.

The Defendant did not feel able to adopt the expert’s provisional opinion as a positive case and, on 19 November 2015, the Defendant consented to an order being made entering judgment based on its admissions. Judgment was subsequently entered for the Claimant by consent in relation to the admissions made by the Defendant.

However, after a conference between all experts instructed by the Defendant in January 2016, the experts agreed that the Claimant had in fact suffered from pyoderma gangrenosum in 2009. The final report of the expert confirmed her view that the Claimant suffered from pyoderma gangrenosum in 2009 and not necrotising fasciitis.

The Defendant therefore made an application to the High Court pursuant to CPR 3.1(7) which states “a power of the court under these Rules to make an order includes a power to vary or revoke the order.”

The Claimant submitted that the discretion under CPR 3.1(7) ought not to be exercised because the expert’s report would not have been admissible on an appeal, applying the established three stage test from Ladd v Marshall. The Claimant submitted that the Defendant had failed to satisfy the first stage of that test, to show the Court that the evidence contained in the expert report could not have been obtained with reasonable diligence before judgment was given. The Claimant submitted that this was not a case in which new evidence had become available because the expert had already expressed her view in her provisional opinion before judgment was entered. The Claimant stated that the Defendant ought to have postponed consenting to the final judgment, informing the Claimant and the Court of the issues arising from the expert’s report.

The Defendant submitted that proceedings were still at an early stage, having not progressed beyond statements of case and disclosure. The Defendant stated that the stage had not been reached when expert evidence was due to be served and no directions for the service of evidence had yet been given.

Judgment

Despite the Judge stating that this was a final judgment which, subject to appeal, decided issues of liability, he exercised his discretion under CPR 3.1(7) to allow the order to be varied and the admissions to be withdrawn.

The Judge’s main focus was upon the Ladd v Marshall test. He accepted that the second and third limb was satisfied by the Defendant with the expert evidence probably having an important influence on the result of the case and appearing to be credible. In respect of the first limb, the Judge was satisfied that the Defendant had not failed to exercise reasonable diligence in obtaining the expert report before judgment was given. The Judge stated that no directions with regards to expert evidence had yet been given and there was no reason for the Defendant to have anticipated that the expert evidence would have cast an entirely different factual basis for the case. The Judge believed that the Defendant could not be criticised for first consulting all experts involved to obtain a considered view on the preliminary opinion.

However, a pivotal reason for allowing the Defendant’s application to succeed was that the Judge believed the admissions the Defendant sought to withdraw were inextricably linked with an issue remaining in dispute; namely, the cause of the pyoderma gangrenosum. The Judge stated that it could not be right to conduct a trial of the above issue on a factual basis which, if the expert was correct, would be false.

The Judge stated that if the application was solely seeking to withdraw admissions, the circumstances of the case favoured the withdrawal of the admissions under CPR 14.1(5). The Judge accepted that the proceedings were at an early stage with no directions for the service of evidence. The Judge was particularly concerned with the fact the Claimant had not produced its own expert evidence, stating that the Claimant was not prejudiced by the withdrawal of the admissions because the case had not yet progressed on the basis of them.

Potential Impact

It would seem, on a basic level, that this case will provide support for future applications under CPR 3.1(7) where judgment has been entered by consent based on admissions. However the Judge made clear that the principle of finality is paramount and something exceptional would be required to vary or revoke an order. In this case, the Court could not conduct a trial on a potentially false basis and this turned the application in favour of the Defendant. Therefore, it would seem that the test to be applied under CPR 3.1(7) is a high threshold discretionary test, requiring not only the application of Ladd v Marshall but all the circumstances of the case. This judgment is a clear example that the Court’s discretion is circumscribed by the rule that the Court will not easily circumvent the principle of finality outside of the appeals procedure even where judgment is entered by consent.

It is quite surprising that Ladd v Marshall was applied by the Judge when an application under CPR 3.1(7) is not an appeal under Part 52 CPR. The judgment therefore leaves a couple of questions unanswered:

-       What actually differentiates an application under CPR 3.1(7) and an appeal?

-       Was it correct for the Judge to apply Ladd v Marshall to an application under CPR 3.1(7)?

It may be that because the judgment was entered by consent and based on admissions, this created the avenue for the Defendant to make an application under CPR 3.1(7). Indeed, it may be that Ladd v Marshall was applied because it was the closest possible authority which could be used to determine whether the order should be varied. Only time will tell whether the applicability of CPR 3.1(7) has been extended or whether this judgment can only be applied to circumstances very similar to its own.