Kearney v Barrett

• Jurisdiction: Ireland
• Judge: Mr Justice Michael Peart
• Judgment Date: 17 December 2003
• Neutral Citation: [2003] IEHC 110
• Court: High Court
• Docket Number: [2001 No. 17747P]
• Date: 17 December 2003

[2003] IEHC 110

THE HIGH COURT

Record Number: No. 17747P/2001

KEARNEY v. BARRETT & ORS T/A COLLINS BROOKS & ASSOCIATES

Between:

Siobhan Kearney and Padraig Kearney

Plaintiffs

And

Richard Barrett, Thomas J. Brooks, Fachtna J. McCarthy, and Veronica Collins, practising under the style and title of Collins Brooks & Associates

Defendants

Abstract:

Practice and procedure - Motion to strike out - Tender offer Settlement negotiations - Purpose of tender offer - Whether offer validly tendered when defendants entered negotiations without explicitly stating them to be without prejudice - Whether prejudice to plaintiffs suffered thereby - Whether action is one for personal injuries - Whether tender offer validly made within time frame provided by Rules of Court - Courts Act, 1988, Section 1(1) - Rules of the Superior Courts 1986, Order 22.

Facts: the plaintiffs by way of notice of motion sought an order striking out the notice of a tender offer made by the defendants. They contended that as the defendants, when they attended settlement negotiations, did not reserve their position to put in a lodgement or make a tender, they could not do so after unsuccessful negotiations had taken place. They submitted that as a matter of public policy defendants ought not to be allowed to take advantage of the plaintiffs in this manner after unsuccessful settlement negotiations had occurred, and that in this particular case significant prejudice had been caused to the plaintiffs because of the concessions which were openly made at the negotiations on their behalf concerning the value of the case and the reasons for that value. The plaintiffs also submitted that that the offer was defective, as it had not been made in accordance with Order 22, rule 1 of the Superior Court Rules which governed non personal injuries actions. The defendants disputed the plaintiffs' contention that once a party entered into without prejudice negotiations with the other side, that party was precluded from thereafter making a lodgement or tender offer, unless they specifically reserved their right to do so. The defendants submitted that since the introduction of S.I. 391/1998, being the so-called 'disclosure rules', under which parties are obliged in any event, in personal injury actions, to make disclosure of their expert reports, that this had changed the climate in which personal injury litigation was conducted. They submitted that if it was intended that a tender offer could not be made after a plaintiff had made concessions during settlement negotiations, the Rules of the Superior Courts 1986 would have to say that specifically, and they had not done so.

Held by Peart J in refusing the application 1, that the fact that the present case included claims other than personal injury claims or that only one of two plaintiffs in the action were so claiming did not take the case outside section 1(1) of the Courts Act 1988 and that, accordingly, the action came within Order 22, rule 7 of the Rules of the Superior Courts 1986, in the same way as the action was covered by the disclosure rules provided by S.I. 391/1998.

2. That the plaintiffs' submissions were predicated on the idea that if the defendant was kept unaware of the weaknesses of the plaintiffs' case it would be possible to obtain for the plaintiff an amount of damages which exceeded the true value of the case, were the plaintiffs' case, warts and all, to be disclosed to the other side.

3. That when the court was considering whether a tender offer which had been made, should be allowed to remain in being or whether it should be struck out on the basis that it ought not to have been put in after unsuccessful without prejudice negotiations, the court could not look at the situation in the same way as the plaintiffs, who may have felt that some tactical advantage was lost to them, but had to consider the matter from the point of view of justice, and from the point of view of the purpose of the lodgement and tender mechanism, including the public interest and see whether any injustice could flow from the revelation of perhaps the real quality of the plaintiffs' case.

4. That there was nothing in the Rules which said that a lodgement could not be made after such negotiations, subject if necessary to an application for leave being made. In the present case the defendants believed that they did not require leave since they were doing so within four months of the date of service of the Notice of Trial, since in their view it was an action to which Order 22, rule 1(7) applied.

5. That therefore the tender offer had been made in accordance with the Rules of the Superior Courts 1986.

Reporter: P. C.

1 Mr Justice Michael Peart delivered the 17 day of December 2003:

2 This is an application made by the plaintiffs by way of Notice of Motion dated 7th November 2003 seeking an order striking out the Notice of a Tender Offer made herein by the defendants on 22nd August 2003.

3 This notice of motion is grounded upon an affidavit of John Shaw solicitor, sworn on the 9th day of October 2003. In his affidavit Mr Shaw states that some negotiations took place between the parties on 9th June 2003 in an effort to try and reach a settlement of this action. The negotiations were unsuccessful.

4 However Mr Shaw states that during the negotiations various aspects of the plaintiffs case were weighed between the parties in relation to its strength and/or weakness, and he states that very significant prejudice has been caused to the plaintiffs in this case because of some concessions which were openly made by the plaintiffs' counsel, which concessions concern the value of the case.

5 The negotiations took place, as I have stated, on 9th June 2003 and on 22nd August 2003 a Notice of Tender Offer in the sum of €100,151 was served by the defendants. Mr Shaw states that it has always been his view that unless the defendants, when they attend settlement negotiations, reserve their position to put in a lodgment or make a tender, they can do so after unsuccessful negotiations have taken place.

6 states in his affidavit that it is one thing to show a party's hand in the course of negotiations, but that it is another thing for that to be used thereafter by the other side for that purpose of calculating a tender and then making that tender. He submits in his affidavit that as a matter of public policy defendants ought not to be allowed to take advantage of the plaintiffs in his manner after settlement negotiations have taken place, but which proved unsuccessful, and states that in this particular case very significant prejudice has been caused to the plaintiffs because of the concessions which were openly made at the negotiations on behalf of the plaintiffs concerning the value of the case and the reasons for that value.

7 He also states that if the plaintiffs had realised that following the negotiations a tender offer was going to be made, the negotiations would have been much more circumspect in the way they were conducted. He goes on to say that if the defendants, at the negotiations, had specifically reserved the right to make a lodgment or tender following any unsuccessful negotiations, he would have advised the plaintiffs not to proceed with such negotiations and to allow the defendants make whatever settlement proposals they had but without any input from the plaintiffs at the negotiations.

8 A replying affidavit sworn the 25 ^th November 2003 by Mr Fergal Dennehy has been filed. He is the solicitor acting on behalf of the defendants. He states that in April 2003 he wrote to the plaintiffs' solicitors on a without prejudice basis asking whether they would be interested in meeting with a view to possibly compromising these proceedings, and that the plaintiffs' solicitors responded stating that they had no difficulty with such a meeting provided that they got sight of the defendants' valuer's report and their medical reports. The meeting for the 9th June 2003 was then arranged, and Mr Dennehy states that the meeting proceeded on a without prejudice basis. Prior to the meeting the said reports were furnished to the plaintiffs. However Mr Dennehy states in his affidavit that he had also requested that plaintiffs' valuer's report and medical reports be furnished to him, but that the plaintiffs' solicitor declined to do so, except that prior to the meeting the agricultural adviser's report was furnished, but nothing more. In those circumstances. Mr Dennehy states that it was the defendants who revealed their hand in this matter and not the plaintiffs.

9 He denies that the defendants tried to take advantage of the plaintiff in relation to the negotiations and the subsequent tender offer. In fact he states that before the negotiations with the plaintiff took place, the defendants met amongst themselves and determined to make an offer at the negotiations to the plaintiffs in the sum of €100,000. This was done but that offer was refused. He points to the fact that after the negotiations the tender offer was put in at a sum of €100,151, and that it is clear that in fact no advantage was in fact gained or taken as a result of the negotiations.

10 In his affidavit, Mr Dennehy goes on to state that he disagrees with Mr Shaw's contention that once a party enters into without prejudice negotiations with the other side, that party is precluded from thereafter making a lodgment or tender offer, unless they specifically reserve their right to do so. He also points to the provisions of S.I. 391 of 1998 which obliges parties to an action to disclose to each other their experts' reports, and that clearly any rule there may have been that a party could not make a lodgment after without prejudice negotiations no longer applies. He also states that in fact the...