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Action for damages: Res judicata

Smith v Sabre Insurance Company Limited
9 April 2013
Inner House, Court of Session

Facts

The claimant was involved in a road traffic accident in March 2009 for which the third party, who was insured by the defenders, was responsible. The claimant raised an action against the insurers in the Court of Session seeking damages for various expenses arising from the loss of use of his car following the accident. The claimant had already obtained decree (judgment) against the insurers in a sheriff court action in which he had claimed damages for injuries suffered in the same accident. On that basis the insurers argued that the claimant should not be allowed to continue pursuing the Court of Session action on the grounds that the matter was res judicata. The claimant maintained that settlement of the sheriff court action had not discharged his claim for damages for the loss of use of his car. The judge held that, as the subject matter and the ground of action were the same in both cases - the claimant’s right to obtain damages from the insurers on the basis on the third party’s negligence - the insurers‟ plea of res judicata should be upheld and the action against the insurers was dismissed.

The claimant appealed against the judge’s decision. He argued that he had two separate rights of action, one for personal injury and one in respect for damage to his property, and that there were two grounds of action producing a clear division between the two claims. He argued that, in the absence of an unambiguous statement to the contrary in Scottish authorities, the majority decision in the English case of Brunsden v Humphrey (1884) 14 Q.B.D. 141 should be followed. In that case it was decided that an action of damages for damage to property did not preclude a subsequent action for personal injuries arising from the same wrongful act.

Findings

The appeal was refused. The appeal court did not accept that the decision in Brunsden was or should be part of the law of Scotland. The appeal court confirmed that it was a sound legal principle that if a person suffered damage as a result of a single negligent act, that gave rise to a single right to obtain damages which had to be pursued in one action. The distinction between damage to the person and damage to property, each giving rise to a separate cause of action, was not consistent with the law of Scotland. In reaching his decision, the judge had considered what had been litigated and decided in the sheriff court action and what was proposed to be litigated and decided in the Court of Session and the appeal court decided that the judge had been correct in concluding that both were the same. The appeal court commented that there were sound policy reasons for the one action rule and, although the effect of the rule might be harsh, any change to this would involve legislation.

Comment

This is an important decision which has the weight of the Inner House of the Court of Session behind it. Although the one action rule has been followed in practice in Scotland for many years, until now there has been no definitive Scottish court decision confirming the position - however, the Inner House’s decision makes the Scots law position on this point clear.

The circumstances in this case are not unusual. The claimant had instructed one firm of solicitors to deal with his personal injury claim while another firm (instructed by Accident Exchange Ltd.) were dealing with the claim for hire charges and other losses arising from loss of use of his car. It appears that, despite the fact that the solicitors dealing with the personal injury claim were aware that there was also a claim for financial losses, they proceeded to raise a court action for the personal injury aspect only. It is essential that, if there are different aspects of a claim arising from one incident, these are pursued in a single action. If it is open to a claimant to raise a number of different actions in relation to different heads of claim, this could to lead to confusion and delay in resolving claims. This would leave those defending claims - in most cases insurers - in the situation of not knowing whether, having settled a claim, a further claim for another head of damages might be pursued at a later stage. This is clearly unsatisfactory for a number of reasons, not least the difficultly created in relation to valuing a claim for reserve purposes.

Link to judgment

Contact

For further information please contact Catherine Hart, Professional Support Lawyer, DWF Biggart Baillie, Scotland on 0141 228 8000

By Catherine Hart

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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