NASH AND OTHERS V ELI LILLY & CO. AND OTHERS [1993] 4 ALL ER 383
FACTS:-
The Defendants were the manufacturers of a drug, “Opren” used in the treatment of arthritis, which was licensed for use in March 1980 in the UK. Regrettably the drug had serious side effects in and in August 1982 the licence was withdrawn. An initial group action issued proceedings by the 31st January 1987 and their claims were settled. A later action of some 337 patients was begun, but the proceedings were issued after the 31st January 1987. The Defendants applied to strike out the claim on the grounds that they were time barred.
JUDGMENT:-
Purchas LJ went over the history of the group action, and considered Sections 11, 14 and 33 of the Limitation Act 1980. He then considered the submissions from both side. The trial judge had relied on the test expounded in McCafferty v Metropolitan Police Receiver [1977] 2 All ER 756 where Geoffrey Lane LJ said that the test of knowledge under the 1980 Act was partly a subjective test i.e. would this Claimant have considered the injury sufficiently serious, and partly an objective test, namely would he have been reasonable if he did not regard it as sufficiently serious. Therefore taking that Claimant, with that Claimant’s intelligence, would he have been reasonable in considering the injury not sufficiently serious to justify instituting proceedings for damages?
In Davis v Ministry of Defence [1985] CA Transport 413 May LJ said that “knowledge” was an ordinary English word with a clear meaning to which one must give full effect. Reasonable belief or suspicion was not enough.
In Halford v Brookes [1991] 3 All ER 559 Lord Donaldson said that knowledge did not mean “know for certain and beyond possibility of contradiction.” It did however mean “know with sufficient confidence to justify embarking on the preliminaries to the issue of a writ such as submitting a claim to the proposed defendant, taking legal and other advice and collecting evidence.”
Purchas LJ said that whether or not a state of mind was to be treated by the court as knowledge seemed to depend in the first place upon the nature of the information which the Claimant had received, the extent to which he paid attention to that information as affecting him, and his capacity to understand it. There is a second stage at which the information is evaluated. The court should assess the intelligence of the Claimant, consider and assess his assertions as to how he regarded such information as he had, and determine whether he had knowledge of the facts by reason of his understanding of the information. Knowledge did not depend upon the character of the Claimant, with reference, for example, as to how vindictive or forgiving he might be, nor whether he was acquisitive or self denying.
In this case Purchas LJ drew a distinction between acceptable side effects, which did not amount to “significant injury” for the purposes of the 1980 and unacceptable side effects which clearly would amount to significant injury in this context.
Counsel for the Defendant submitted (and counsel for the Claimants did not argue to the contrary) that the presence of the words “first had knowledge” in Section 14(1) meant that once the Claimant had knowledge, nothing would suspend or terminate the process.
However in the case of Davis v Ministry of Defence the Claimant was employed between 1955 and 1971 as a welder. In 1969 he contracted dermatitis, and suffered further outbreaks between then and 1971. Thereafter he claimed industrial injury benefit. His GP thought that the case was his employment, which belief was shared by the Claimant. In 1972, the Claimant applied to his trade union for legal assistance and solicitors were instructed. The claims commission of the Defendants rejected his claim in a letter to his solicitors in 1973, saying that they could find no direct evidence of a connection between the dermatitis and the employment. However an expert report to the contrary did not reach the commission. Proceedings were issued in 1973, but it was never served and so lapsed. New proceedings were issued in 1981.
May LJ said that the Claimant’s injuries were significant within the meaning of Section 14 of the 1980 Act, and that he had believed throughout that his injuries were caused by his employment. However the contrary advice given by his legal and medical advisers meant that he did not know that his dermatitis was capable of being attributed to his working conditions.
The point made by the Defendant’s counsel in this case, about non suspension of time after knowledge was established, was not argued in the case of Davis.
Purchas LJ said that he did not draw a great deal of assistance from the case of Davis. The appeal was from an order striking out the action, rather than a trial of the preliminary issue. Therefore the court could only strike out the action if the question on “date of knowledge” was clear and obvious. Moreover the facts of the case were highly unusual. Purchas LJ said that in his view, it could be argued that a Claimant lost “knowledge” and then regained it again in this way.
Purchas LJ made the following conclusions:-
Attributability
Purchas LJ said that it was necessary to examine the meaning of the word “attributable” in this context. He referred to a case Guidera v NEI Projects (India) Ltd [1990] CA Transcript 60 had said that attribution should be merely possible, a mere possibility and not a fanciful one. The act of omission of the Defendant must be a possible cause as opposed to a probable cause of the injury. The same approach was employed in McCafferty v Metropolitan Police District Receiver [1977] 2 All ER 756 and Wilkinson v Ancliff (BLT) Ltd [1986] 3 All ER 427.
Purchas LJ said that what was required was knowledge of the essence of the act or omission to which the injury was attributable.
Constructive knowledge
Section 14(3) of the 1980 Act dealt with “constructive knowledge”. In the judgement of Purchas LJ, the proper approach was to determine what this Claimant should have observed or ascertained, while asking no more of him than was reasonable. The standard of reasonableness in connection with the observations and/or the effort to ascertain were therefore finally objective, but had to be qualified to take into consideration the position, circumstances and character of the Claimant.
In relation to 14(1)(b) attributability, subsection (3)(a) was frequently relevant in the form of facts observed by the Claimants from media communications, both by televisions and newspapers, and also from the establishment of the litigation group. Under subsection 3(b) in many cases medical advice became relevant both in a positive and a negative sense. In some cases, the GP’s were not fully informed about the side effects of the Opren drug and in one case a consultant positively excluded the drug as the cause of symptoms.
The mere announcement of the Defendants that the drug was to be withdrawn, that was to be treated as giving the Claimants knowledge.
Identity of Defendants
Two additional Defendants had been added to the action in 1985. The Claimant submitted that time should not run until that date. That was on the basis that the litigation group did not know of the existence of these two extra Defendants until that date. Purchas LJ said that in all the cases with which these appeals were concerned, once attributability was established against one or more Defendants, the identity of the remaining Defendants was reasonably ascertainable.
Exercise of discretion under Section 33 of the Limitation Act 1980
Purchas LJ went over the provisions of Section 33. This only came into effect when the Claimant had failed to establish that the date of knowledge was sufficiently postponed within the provisions of Section 14. The discretion of the court was unfettered and the burden of showing that it was equitable to disapply the limitation provisions fell on the Claimant.
The matters set out in sub section (3) of Section 33 were exemplary and not definitive, although failure to take into account those matters would make a judgment susceptible to attack. The Court of Appeal would be very slow to interfere with the exercise of discretion under this section (Conry v Simpson [1983] 3 All ER 369). Where however it was established that the judge either took into account factors which he should have ignored, or ignored factors which he should have taken into account, or was plainly wrong, then the Court of Appeal would interfere, and substitute a decision based on its own discretion. It should however be mentioned that a judge was not under a duty to refer to each and every fact which he had found upon which he had exercised his discretion.
The primary purpose of the limitation period was to protect a Defendant against the injustice of having to face a stale claim. Once a Claimant had allowed the permitted time to elapse, the Defendant was no longer subject to the disability to accepting without protest the limitation period itself. The court would be directed to consider all the circumstances of the case including conduct before the expiry of the limitation date, as was held in Donovan v Gwentoys Ltd [1990] 1 All ER 1018.
There were also the cases of Hartley v Birmingham City DC [1992] 2 All ER 213, Thompson v Brown Construction (Ebbw Vale) Ltd [1981] 2 All ER 296 and Firmin v Ellis [1978] 2 All ER 851. In Hartley the issue of prejudice to either side was considered. A Defendant would normally suffer prejudice if an order was made, but he would only have lost a windfall unless his ability to defend had been affected by the delay. Therefore if the claim was poor and lacking in merit, there might be significant and relevant prejudice to the Defendant if the limitation provisions were disapplied.
In this case, the trial judge seemed to have confused the consideration of the relative cogency of the cases in the context of the Claimants’ delay under Section 33(3)(a) with the overall discretion to be exercised by the court under Section 33(1). Cogency under Section 33(3)(b) was directed to the degree to which either party is prejudiced in the presentation of the claim because the evidence was no longer available or had been adversely affected by the passage of time. There was no room in the provisions for the argument that lack of cogency in the Claimant’s case could inure to the benefit of the Claimant and thereby prejudice the Defendant.
At the same time, if the cases were poor, then the Defendants were put to the expense of defending, upon its merits, a poor case, which might well cost, upon the issues apart from liability, far more to defend than the case would be worth.
The evidential context
There were a number of features that arose in many of these cases. There was no dispute as to the connection between such symptoms as were established and the drug Opren. The extent and quality of the contemporary documentation varied much from case to case, and there was a report from a Dr Ward on each Claimant. The Defendants had had individual Claimants examined but his reports were not put before the judge.
Purchas LJ commented that in the hands of a medical expert, a skilful and careful interrogation of the patient could frequently disclose conscious or subconscious exaggerations or falsehoods in the history.
Group action and public policy
The Defendants’ counsel had argued that as a matter of public policy section 33 discretion should not be exercised. Purchas LJ said that there was no argument that could be validly based on public policy. On analysis this was an invitation to the court to impose definite limits on proposed Claimants by manipulating the exercise of discretion under Section 33. That was a matter for legislation on group actions.
Purchas LJ then considered the individual cases and made the following decisions.
FACTS:-
The Defendants were the manufacturers of a drug, “Opren” used in the treatment of arthritis, which was licensed for use in March 1980 in the UK. Regrettably the drug had serious side effects in and in August 1982 the licence was withdrawn. An initial group action issued proceedings by the 31st January 1987 and their claims were settled. A later action of some 337 patients was begun, but the proceedings were issued after the 31st January 1987. The Defendants applied to strike out the claim on the grounds that they were time barred.
JUDGMENT:-
Purchas LJ went over the history of the group action, and considered Sections 11, 14 and 33 of the Limitation Act 1980. He then considered the submissions from both side. The trial judge had relied on the test expounded in McCafferty v Metropolitan Police Receiver [1977] 2 All ER 756 where Geoffrey Lane LJ said that the test of knowledge under the 1980 Act was partly a subjective test i.e. would this Claimant have considered the injury sufficiently serious, and partly an objective test, namely would he have been reasonable if he did not regard it as sufficiently serious. Therefore taking that Claimant, with that Claimant’s intelligence, would he have been reasonable in considering the injury not sufficiently serious to justify instituting proceedings for damages?
In Davis v Ministry of Defence [1985] CA Transport 413 May LJ said that “knowledge” was an ordinary English word with a clear meaning to which one must give full effect. Reasonable belief or suspicion was not enough.
In Halford v Brookes [1991] 3 All ER 559 Lord Donaldson said that knowledge did not mean “know for certain and beyond possibility of contradiction.” It did however mean “know with sufficient confidence to justify embarking on the preliminaries to the issue of a writ such as submitting a claim to the proposed defendant, taking legal and other advice and collecting evidence.”
Purchas LJ said that whether or not a state of mind was to be treated by the court as knowledge seemed to depend in the first place upon the nature of the information which the Claimant had received, the extent to which he paid attention to that information as affecting him, and his capacity to understand it. There is a second stage at which the information is evaluated. The court should assess the intelligence of the Claimant, consider and assess his assertions as to how he regarded such information as he had, and determine whether he had knowledge of the facts by reason of his understanding of the information. Knowledge did not depend upon the character of the Claimant, with reference, for example, as to how vindictive or forgiving he might be, nor whether he was acquisitive or self denying.
In this case Purchas LJ drew a distinction between acceptable side effects, which did not amount to “significant injury” for the purposes of the 1980 and unacceptable side effects which clearly would amount to significant injury in this context.
Counsel for the Defendant submitted (and counsel for the Claimants did not argue to the contrary) that the presence of the words “first had knowledge” in Section 14(1) meant that once the Claimant had knowledge, nothing would suspend or terminate the process.
However in the case of Davis v Ministry of Defence the Claimant was employed between 1955 and 1971 as a welder. In 1969 he contracted dermatitis, and suffered further outbreaks between then and 1971. Thereafter he claimed industrial injury benefit. His GP thought that the case was his employment, which belief was shared by the Claimant. In 1972, the Claimant applied to his trade union for legal assistance and solicitors were instructed. The claims commission of the Defendants rejected his claim in a letter to his solicitors in 1973, saying that they could find no direct evidence of a connection between the dermatitis and the employment. However an expert report to the contrary did not reach the commission. Proceedings were issued in 1973, but it was never served and so lapsed. New proceedings were issued in 1981.
May LJ said that the Claimant’s injuries were significant within the meaning of Section 14 of the 1980 Act, and that he had believed throughout that his injuries were caused by his employment. However the contrary advice given by his legal and medical advisers meant that he did not know that his dermatitis was capable of being attributed to his working conditions.
The point made by the Defendant’s counsel in this case, about non suspension of time after knowledge was established, was not argued in the case of Davis.
Purchas LJ said that he did not draw a great deal of assistance from the case of Davis. The appeal was from an order striking out the action, rather than a trial of the preliminary issue. Therefore the court could only strike out the action if the question on “date of knowledge” was clear and obvious. Moreover the facts of the case were highly unusual. Purchas LJ said that in his view, it could be argued that a Claimant lost “knowledge” and then regained it again in this way.
Purchas LJ made the following conclusions:-
- The antithesis between belief and knowledge which came from the case of Davis was a false antithesis.
- Knowledge in the meaning of section 14 was a state of mind experienced by the Claimant actually existing or which might have existed, had the Claimant, acting reasonably, acquired knowledge from the facts observable or ascertainable by him or which he could have acquired with expert help.
- The period of limitation begins to run when the Claimant can first be said to have had knowledge of the nature of his injury to justify the particular Claimant taking the preliminary steps for the institution of proceedings.
- There might be cases where a firmly held belief actually held by the Claimant precluded consideration of any further steps which he might reasonably have taken to acquire from knowledge of further facts before initiating proceedings. In other cases, the state of the Claimant’s belief would make it reasonable for him to make the further enquiries envisaged in Section 14(3).
- It was to be noted that a firm belief held by the Claimant that his injury was attributable to the act of omission of the Defendant, but in respect of which he thought it necessary to obtain reassurance or confirmation from experts, medical or legal, or others, would not be regarded as knowledge until the result of his inquiries was known to him, or if he delayed in obtaining that confirmation, until the time at which it was reasonable for him to have got it. If negative expert advice is obtained, that fact should be considered in combination with all other relevant facts in deciding when, if ever, the Claimant had knowledge. If no inquiries were made, then, if it were reasonably for such inquiries to have been made, and if the failure to make them was not explained, constructive knowledge within the terms of Section 14(3) must be considered. If the Claimant held a firm belief which was of sufficient certainty to justify the taking of the preliminary steps for proceedings by obtaining advice about making a claim for compensation, then such belief was knowledge and the limitation period would begin to run.
- The onus of proof lay on the Claimant, if proceedings were not issued within three years of the date when the cause of action arose. If the Defendant wished to rely on a date prior to the three year period, the onus was on the Defendant to prove that the Claimant had or ought to have had knowledge by that date.
Attributability
Purchas LJ said that it was necessary to examine the meaning of the word “attributable” in this context. He referred to a case Guidera v NEI Projects (India) Ltd [1990] CA Transcript 60 had said that attribution should be merely possible, a mere possibility and not a fanciful one. The act of omission of the Defendant must be a possible cause as opposed to a probable cause of the injury. The same approach was employed in McCafferty v Metropolitan Police District Receiver [1977] 2 All ER 756 and Wilkinson v Ancliff (BLT) Ltd [1986] 3 All ER 427.
Purchas LJ said that what was required was knowledge of the essence of the act or omission to which the injury was attributable.
Constructive knowledge
Section 14(3) of the 1980 Act dealt with “constructive knowledge”. In the judgement of Purchas LJ, the proper approach was to determine what this Claimant should have observed or ascertained, while asking no more of him than was reasonable. The standard of reasonableness in connection with the observations and/or the effort to ascertain were therefore finally objective, but had to be qualified to take into consideration the position, circumstances and character of the Claimant.
In relation to 14(1)(b) attributability, subsection (3)(a) was frequently relevant in the form of facts observed by the Claimants from media communications, both by televisions and newspapers, and also from the establishment of the litigation group. Under subsection 3(b) in many cases medical advice became relevant both in a positive and a negative sense. In some cases, the GP’s were not fully informed about the side effects of the Opren drug and in one case a consultant positively excluded the drug as the cause of symptoms.
The mere announcement of the Defendants that the drug was to be withdrawn, that was to be treated as giving the Claimants knowledge.
Identity of Defendants
Two additional Defendants had been added to the action in 1985. The Claimant submitted that time should not run until that date. That was on the basis that the litigation group did not know of the existence of these two extra Defendants until that date. Purchas LJ said that in all the cases with which these appeals were concerned, once attributability was established against one or more Defendants, the identity of the remaining Defendants was reasonably ascertainable.
Exercise of discretion under Section 33 of the Limitation Act 1980
Purchas LJ went over the provisions of Section 33. This only came into effect when the Claimant had failed to establish that the date of knowledge was sufficiently postponed within the provisions of Section 14. The discretion of the court was unfettered and the burden of showing that it was equitable to disapply the limitation provisions fell on the Claimant.
The matters set out in sub section (3) of Section 33 were exemplary and not definitive, although failure to take into account those matters would make a judgment susceptible to attack. The Court of Appeal would be very slow to interfere with the exercise of discretion under this section (Conry v Simpson [1983] 3 All ER 369). Where however it was established that the judge either took into account factors which he should have ignored, or ignored factors which he should have taken into account, or was plainly wrong, then the Court of Appeal would interfere, and substitute a decision based on its own discretion. It should however be mentioned that a judge was not under a duty to refer to each and every fact which he had found upon which he had exercised his discretion.
The primary purpose of the limitation period was to protect a Defendant against the injustice of having to face a stale claim. Once a Claimant had allowed the permitted time to elapse, the Defendant was no longer subject to the disability to accepting without protest the limitation period itself. The court would be directed to consider all the circumstances of the case including conduct before the expiry of the limitation date, as was held in Donovan v Gwentoys Ltd [1990] 1 All ER 1018.
There were also the cases of Hartley v Birmingham City DC [1992] 2 All ER 213, Thompson v Brown Construction (Ebbw Vale) Ltd [1981] 2 All ER 296 and Firmin v Ellis [1978] 2 All ER 851. In Hartley the issue of prejudice to either side was considered. A Defendant would normally suffer prejudice if an order was made, but he would only have lost a windfall unless his ability to defend had been affected by the delay. Therefore if the claim was poor and lacking in merit, there might be significant and relevant prejudice to the Defendant if the limitation provisions were disapplied.
In this case, the trial judge seemed to have confused the consideration of the relative cogency of the cases in the context of the Claimants’ delay under Section 33(3)(a) with the overall discretion to be exercised by the court under Section 33(1). Cogency under Section 33(3)(b) was directed to the degree to which either party is prejudiced in the presentation of the claim because the evidence was no longer available or had been adversely affected by the passage of time. There was no room in the provisions for the argument that lack of cogency in the Claimant’s case could inure to the benefit of the Claimant and thereby prejudice the Defendant.
At the same time, if the cases were poor, then the Defendants were put to the expense of defending, upon its merits, a poor case, which might well cost, upon the issues apart from liability, far more to defend than the case would be worth.
The evidential context
There were a number of features that arose in many of these cases. There was no dispute as to the connection between such symptoms as were established and the drug Opren. The extent and quality of the contemporary documentation varied much from case to case, and there was a report from a Dr Ward on each Claimant. The Defendants had had individual Claimants examined but his reports were not put before the judge.
Purchas LJ commented that in the hands of a medical expert, a skilful and careful interrogation of the patient could frequently disclose conscious or subconscious exaggerations or falsehoods in the history.
Group action and public policy
The Defendants’ counsel had argued that as a matter of public policy section 33 discretion should not be exercised. Purchas LJ said that there was no argument that could be validly based on public policy. On analysis this was an invitation to the court to impose definite limits on proposed Claimants by manipulating the exercise of discretion under Section 33. That was a matter for legislation on group actions.
Purchas LJ then considered the individual cases and made the following decisions.
- The Appeal of Miss O’Hara would succeed on Section 33 of the Limitation Act 1980 although her case was statute barred
- The Appeal of Mrs Forster would succeed on the grounds that her action was not shown to be statute barred
- The Appeal of Mr Kirby also would succeed on the grounds that his action was not shown to be statute barred
- All the other appeals were dismissed.