Mak Shiu Cheung v. Luk Man Tai

DCPI 2741/2023

[2023] HKDC 1801

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

PERSONAL INJURIES ACTION NO 2741 OF 2023

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DECISION

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INTRODUCTION

1.This is the second case in recent weeks that I have to deal with concerning a party’s failure to follow the pre-action protocol (“the Pre-Action Protocol”) set out under Part B §§14-23 of Practice Direction 18.1 (“PD 18.1”).

BACKGROUND

2.The defendant took out a summons on 7 September 2023 against the plaintiff resulting from the alleged failures on the part of the plaintiff in complying with the Pre-Action Protocol (“the Summons”).

3.The following orders were sought by the defendant under the Summons:-

“1. Proceedings herein be stayed for a period of 3 months from the date of the order.

2. The Plaintiff make discovery of documents to the Defendant as required under paragraph 66 of Practice Direction 18.1 and the letter from the Defendant’s insurer dated 11 May 2023 and comply with the terms of the Pre-Action Protocol Practice Direction 18.1 as to constructive communication and engagement of a single joint expert.

3. The Plaintiff be disallowed the costs of preparation of the Statement of Claim and Statement of Damages; and

4. The costs of this application be to the Defendant.”

4.The grounds for the application are set out in the affidavit of the defendant’s solicitor, Mr Mark Francis Reeves, filed on 7 September 2023. In the affidavit, the defendant alleges the plaintiff has breached both the Pre-Action Protocol and §66 of PD 18.1. Further, the defendant alleges that the plaintiff has failed to comply with O 1A r 1 of the Rules of the District Court (“RDC”), namely, the underlying objectives of the Civil Justice Reform (“CJR”).

5.The defendant claims that the plaintiff has failed to comply with the Pre-Action Protocol in both their letter of claim and in responding to the defendant’s reply. Specifically, the plaintiff has (i) failed to disclose the fact that there was an existing related employees’ compensation proceedings; and (ii) failed to make discovery of the documents requested by the defendant before issuing the writ (“the Writ”) and filing the statement of claim (“SOC”) and statement of damages (“SOD”).

The Accident

6.This case involved a minor traffic accident which happened on 21 October 2020. The defendant was the insured driver of a light goods vehicle (“the LGV”) while the plaintiff was the front seat passenger travelling on another LGV (“the Other LGV”). In the accident, the defendant drove the LGV into the rear of the Other LGV in which the plaintiff was travelling on. The plaintiff sustained personal injuries (“PI”) as a result. The defendant was subsequently charged with and convicted of the offence of careless driving resulting from the accident (“the Accident”).

The letter of claim

7.The letter of claim in this case as mandated by §15 of PD 18.1 was sent by the plaintiff’s solicitors on 2 May 2023 to the defendant (“the Letter of Claim”). A copy of the Letter of Claim was sent to the insurer of the defendant on the same day.

8.However, contrary to the specific requirements stated under Appendix A of PD 18.1 (“Appendix A”), the Letter of Claim made no reference to the corresponding employees’ compensation case which was commenced on 15 September 2021 under DCEC No. 1943 of 2021 (“the EC Action”). It is not disputed that the solicitors acting for the plaintiff in the present proceedings are also the solicitors on record acting for the applicant (ie the plaintiff herein) in the EC Action[1]. Further, not all the information and documents pertaining to the issue of quantum as listed out in Schedule A of Appendix A (“Schedule A”) had been disclosed by the plaintiff under the Letter of Claim. The only documents accompanying the Letter of Claim were:-

“1. Brief facts of the case prepared by the Police;

2. Police sketch plan;

3. Police statements of various witnesses to the accident including the plaintiff’s; and

4. One medical report from the doctor at the Accident & Emergency Department (“A&E”) of United Christian Hospital (“UCH”).”

9.In particular, the defendant complains that (i) no receipts of any alleged expenses; and (ii) no documentary proof on any income or tax liability had been disclosed/attached by the plaintiff under the Letter of Claim.

The defendant’s reply

10.Under §19 of PD 18.1 the defendant was supposed to give a “constructive reply” to the Letter of Claim within one month. Thereafter, the parties should have over three months to “communicate constructively and provide mutual disclosure of information and documents with respect to issues of liability and quantum (including, without limitation, the information and documents identified in Schedules A and B of the specimen letter which have not already been served) as are reasonably required for attempting to settle the claim in whole or in part, instructing medical expert(s) and / or arranging expert medical examination”. [emphasis added]

11.Due to the alleged incomplete information / documents provided by the plaintiff under the Letter of Claim, when the defendant’s insurer replied to the plaintiff’s solicitors two days later on 11 May 2023 (“the Reply Letter”), they requested, inter alia, the following information / documents on quantum which the defendant claims should have been sent with the Letter of Claim:-

“………

4) Your client’s tax returns and Inland Revenue Department assessment for the assessment years from 2019 up till present;

5) Salary slips and/or MPF records from 2019 up till present;

6) All the documents related to EC, including but not limited to Form 2, 5, 6, 7 or 9 and settlement agreement indicating the total EC amount, if the accident happened in the course of his employment;

7) If the answer is negative, please confirm whether your client received any sick leave compensation during his sick leave period and provide the salary pay slips or any other documents to prove the receipt of the sick leave payment;

8) TAVAS documents, if any;

………”

12.Without the information sought by the Reply Letter, the defendant claims that they could not assess the claim and constructively reply to the plaintiff, let alone entering into any meaningful discussions on settlement prior to the plaintiff’s issue of proceedings.

13.It was subsequently discovered by the defendant that in fact a list of documents had been filed in the EC Action by the plaintiff (as the applicant in that case) on 6 July 2022. It made extensive discovery of quantum documents including medical reports, medical records, tax returns and payroll records. The defendant says this has amply demonstrated the fact that the documents sought by them were readily available to the plaintiff when the defendant’s insurer made their request in the Reply Letter as the documents were (save for one item) all dated back in 2020 and 2021.

14.The plaintiff’s solicitors failed to respond to the Reply Letter. Instead, they issued the Writ and filed and served the SOC and SOD in the present proceedings some 3½ months later on 22 August 2023.

The defendant’s submissions

15.The defendant’s primary submission is that the Letter of Claim has failed to disclose all the required information and documents under the Pre-Action Protocol which left the defendant in an invidious position of not able to provide a “constructive reply” as specified under §19 of PD 18.1. As such, the defendant claims that the plaintiff has failed to comply with the Pre-Action Protocol which led to the premature issuing of the SOC and SOD and stifle any chance of an early settlement between the parties.

The plaintiff’s submissions

16.The plaintiff’s solicitors rely on four grounds in their written submissions of why they consider they should not be held responsible in failing to comply with the Pre-Action Protocol.

17.First, the plaintiff’s solicitors while on one hand admitted that they have “overlooked” the Reply Letter, on the other hand they blamed the defendant for not sending them a reminder when the plaintiff had failed to respond to them. They claim this is particularly so when the defendant knew that the action would almost become time-barred by that time.

18.The plaintiff further submits that the defendant in the Reply Letter had failed to give a “constructive reply and/or clear constructive reply” in relation to the following two matters:-

“(i) Whether the insurer admit liability; and

(ii) Whether there will be 3^rd party which may be at fault given the fact that the Defendant, i.e. the driver, was driving a light goods vehicle and was probably under the employment at the material time and that his employer (whose name and address is still unknown to us) may be vicariously liable for the Plaintiff’s claim. If so, it may be necessary to add his employer as one of the Defendants and time is essential for the Plaintiff to see the Defence within the limitation period.”

19.The plaintiff says that because the case would be time-barred on 20 October 2023, they felt obliged to issue the proceedings in August 2023.

20.Second, the plaintiff’s solicitors claim that the issuing of the present proceedings was necessary and inevitable. They claim that even if the defendant have received the requested documents from the plaintiff, the issuance of the proceedings was still inevitable for the following reasons:-

(i)  liability has not been admitted by the defendant;

(ii)  expert medical examination has not been arranged; and

(iii)  negotiations for the settlement of the plaintiff’s claim would need time.

21.However, significantly, the above submissions came with the plaintiff solicitors’ concession that, once they realized that the Pre-Action Protocol had not been “strictly complied with” by them, in order to “save costs for argument and to cure their mistake without delay”, they agreed to waive the costs for the preparation of the SOC and SOD in this case. They further agreed to stay the proceedings for a period of 3 months during which they could negotiate for the single joint expert’s examination on the plaintiff.

22.Third, the plaintiff’s solicitors claim that while they have not served copies of any pre-accident and post-accident earnings together with the SOC, their position is that it was not necessary for the defendant to issue the Summons. They say that the defendant’s solicitors should have given them more time to respond to their request instead of issuing them the letter and the Summons on the same day. They further claim that they had since acted promptly and provided all the documents on hand to the defendant’s solicitors on 20 September 2023.

23.Fourth, the plaintiff’s solicitors deny that they have failed to file the list of documents in this case as claimed by the defendant. They rely on O 24 r 1 of the RDC where list of documents are required to be filed after the close of pleadings only.

24.Based on the above, the plaintiff’s solicitors say that the issue of the Summons was “totally unnecessary” and by doing so the defendant’s solicitors had failed to act in accordance with the spirit and provisions of O 1A, r 1 of the RDC, namely, the underlying objectives of the CJR. In particular, they say the defendant had failed to pay respect to the cost-effectiveness of any practice and procedure to be followed in relation to proceedings before the court and to promote a sense of procedural economy in the conduct of proceedings. As such, the plaintiff submits that the costs of the Summons should be borne by the defendant or at least there be no order as to costs.

DISCUSSION

History of the Pre-Action Protocol

25.PD 18.1 under its formal title of “Practice direction – 18.1 Personal Injuries List” was first introduced in April 1996 (“PD 18.1 (v1)”) after a pilot scheme had started the year before. It has been revised and updated three times since then: first in September 1998 (“PD 18.1 (v2)”); then in February 2001 (“PD 18.1 (v3)”) and the last time in April 2009, ie the current PD 18.1.

26.The Pre-Action Protocol as stated in Part B of the current PD 18.1, which came into effect on 2 April 2009 (the same date as the implementation of CJR), was not new. It first came into existence under PD 18.1 (v3), which came into effect on 1 February 2001. It was introduced by the then PI Judge of the High Court Mr Justice Seagroatt.

27.Under the original version of the protocol, a request for a claimant to issue a letter of claim to the proposed defendant no later than four months prior to the commencement of proceedings; and for the proposed defendant or his insurer to make a constructive reply within a month after receiving the letter of claim, were introduced: (see §2 of PD 18.1 (v3)). Under §2.3, it states that “If a reply is received within the said time, the defendant and/or the insurer should have a period of three months in which to investigate the claim, by the end of which it shall state whether liability is denied and if so, giving the reasons therefor.”

28.A specimen letter of claim which is similar (but not identical) to the one that can be found under the current PD.18.1 was attached as Annex A of PD18.1 (v3). However, no suggested documents as listed out in Schedule A and Schedule B of Appendix A of PD 18.1 have been included in the original version.

29.In the Guidance Note appeared at the end of PD 18.1 v3, Mr Justice Seagroatt explained the importance and the intended goals of the Pre-Action Protocol. I would like to reproduce some of the relevant passages contained in the Guidance note below for ease of referemce:-

“A letter before action is essential. If it does not contain sufficient information to inform a defendant and/or his insurers of the basis, nature and extent of the claim, it is nothing more than a formal equivalent to “we have instructions to claim”.

This protocol is to ensure that a defendant has proper notice of a claim with adequate detail and a realistic opportunity to investigate and react to the claim before a claimant plunges headlong into costs generating proceedings.

…

This protocol is not intended to be forced upon a claimant but if proceedings are initiated and costs generated without having given the defendant an opportunity to respond without such precipitate action, the claimant will have difficulty in justifying such premature expenditure.

…

Too many actions are commenced far too late without giving Defendants the chance to negotiate a settlement. An excessive level of costs is also generated before notification is given.

The costs implications i.e. the need for the Plaintiff to justify the incurring of costs by proceeding whilst the Defendants are accorded the facilities, will mean that if the Plaintiff's solicitors fail to hold their hand whilst giving the Defendants the opportunity provided for in §2.3, they are unlikely to be allowed their costs incurred in advancing the proceedings. The rationale is that having had to issue proceedings because of the circumstance illustrated in §2.4 they would be denying the Defendants the opportunity of complying with the form and spirit of §2.3.

It has been suggested that the 4-month period to be accorded in the recommended protocol to the Defendants for their investigation and opportunity of evaluating the merits of the claim so as to give the Plaintiffs solicitors their positive reaction, will simply act as a brake upon the progress of proceedings. This view is to misunderstand the whole structure of the Directions and its allied proposed protocol. If the Defendants do not use that 4-month period for the purpose for which it is intended they will not be able to obtain extensions of time in the course of proceedings to compensate for their omission or neglect in that regard.

…”

30.Hence, it can be seen from the above that the Pre-Action Protocol is designed to enable the parties to engage in meaningful discussions after all relevant information and documents are disclosed by the claimant. It afforded the proposed defendant or his insurer an opportunity to investigate into the merits of the proposed claim and to allow the defendant the chance to negotiate for a settlement before proceedings are issued. Its aim is to discourage the claimant to issue proceedings unnecessarily and prematurely. It has dire consequences on costs if the parties do not strictly follow the protocol.

31.In other words, from the time when it was first introduced in 2001, the protocol was not meant to be just a “go through the motions” exercise. It was meant to be taken seriously by both the claimant and the proposed defendant / insurer (and their legal representatives) so as to avoid any unnecessary litigation and to facilitate settlement before the issue of proceedings. A claimant cannot simply pay lip service to the protocol.

32.The protocol has been updated and expanded under PD 18.1 in April 2009.

The Pre-Action Protocol under the current PD 18.1

33.The Pre-Action Protocol can be found in Part B §§14 to 23 of PD 18.1. It is to be read in conjunction with §9 and §147 of PD 18.1 which set out general consequences for failure to comply with the practice direction. It is also to be read together with Part D of PD 18.1 on ADR (Alternative Dispute Resolution) which is to encourage parties to resolve disputes through negotiations and/or mediation. It regards trial as the last resort in a PI case.

34.The intent of a letter of claim is to provide the proposed defendant with sufficient information to begin to understand, investigate and assess liability and quantum aspects of the claim. If it is not properly drafted and does not enclose all information and documents “reasonably required”, it will not serve such a purpose.

35.One of the important matters included in the specimen letter of claim as set out in Appendix A of PD 18.1 requires the claimant to clearly state “the accident did/did not occur in the course of employment. / Our client has brought Employees’ Compensation proceedings in the District Court under DCEC No. of ”.[2]

36.Further, under Schedule A, it requires the claimant to include (but not limited to) the following documents in road traffic accident cases with the letter of claim[3]:-

“1. Police Witness Statements

2. Police Sketch Plan

3. Photocopy Police photos

4. Brief Facts of case

5. Medical reports

6. Income proof – reasonably sufficient proof by either pay slips, statement(s) obtained from his employer(s) or bank account/other records (refer to paragraph 66(2) and (3) of Practice Direction 18.1)

7. Tax returns lodged with the Inland Revenue Department by the claimant and his employer(s), and his ORSO and/or MPF statements (refer to paragraph 66(2) and (3) of Practice Direction 18.1

8. Copy identity Card (for proof of age)

9. Medical and other expense receipts”

37.However, the Letter of Claim issued by the plaintiff in this case was lacking in two very material aspects. First, it failed to disclose to the defendant the very important fact that they had already commenced the EC Action on behalf of the plaintiff in this case. Second, it failed to disclose important quantum documents like medical reports and records (saved from one single report from the A&E of UCH dated 24 January 2021); and his earning records like payrolls and tax returns.

38.In my judgment, the failure to provide crucial information like that of the parallel EC Action in this case, particularly when the defendant was not the plaintiff’s employer and hence would not have knowledge of the corresponding EC proceedings unless the plaintiff or his solicitors inform him, defeats one of the main purposes of having the Pre-Action Protocol.

39.Without knowing the existence of the EC Action, the defendant’s insurer would be kept in the dark as to whether such parallel proceedings exist. Hence, they would not be in a position to determine whether it would be in their interest as the motor insurer to take over the EC case from the EC insurer as often the damages recoverable in the motor claim would be larger than the compensation recoverable in the EC proceedings[4]. This would lead to two sets of proceedings arising out of the same accident when a “global settlement” could be achieved. Further, the failure to mention about the parallel EC proceedings would likely lead to duplication of costs; wasting of time and efforts of the parties; and wasting the limited resources of the courts. This is particularly applicable in situation where liability in the EC proceedings and the motor accident case is not in dispute or not disputable as in the circumstances of this case.

40.In my view, early disclosure of the EC proceedings would also have the additional benefit of saving the employer or the EC insurer from taking out a separate recovery action under s 25 of the Employees’ Compensation Ordinance, Cap 282 against the offending driver or his insurer for any compensation paid to the employee under the legislation.

41.In my view, the above explains why the disclosure of a related EC proceedings is so important during the Pre-Action Protocol. A simple “oversight” will not generally be accepted by the court as an excuse from the claimant or his solicitors for failing to state such an important matter in the letter of claim.

42.Further, in my judgment, the disclosure of the fact that an accident occurred in the course of employment and that EC proceedings has already been brought by the proposed claimant will help the parties to focus on the medical and income evidence that might have already been discovered in the EC proceedings. This will certainly help the defendant or his insurer to make a constructive reply with the real possibility that the case can be settled without the need for the plaintiff issuing the common law proceedings.

43.In this case, the plaintiff’s solicitors have not attempted to offer any plausible explanation in their written submissions as to why they have failed to mention the crucial fact that the Accident happened in the course of his employment and that the EC Action had been brought by the plaintiff against his employer. As this matter has been clearly stated in Appendix A, all that they needed to do was to go through the contents and stated all the matters listed out in the specimen letter under Appendix A. I simply do not see any good reasons why they have omitted to include such an important matter in the Letter of Claim.

44.Equally, the plaintiff’s solicitors have failed to offer any plausible explanation in their submissions as to why the relevant quantum documents, including the medical reports & records and income proof like pay slips & tax returns were not listed out and provided under the Letter of Claim. Just like the EC Action, the required documents required to be included (but without limited thereto), are listed out in Schedule A. All that the plaintiff’s solicitors have to do was to go through the list and to make sure that those documents would be attached to the Letter of Claim. This does not require any special skills or legal knowledge. It merely requires a solicitor or his clerk to diligently adhere to the Pre-Action Protocol and follow the exact wording and the documents set out in Appendix A and Schedule A.

45.In my view, this is not a case where the plaintiff’s solicitors were unaware of the EC Action as they were the solicitors acting on behalf of the plaintiff (as the applicant therein) in the EC proceedings. The application in the EC Action was filed on 15 September 2021, some 20 months before the Letter of Claim was sent to the defendant and his insurer on 9 May 2023. This is also not a case where the plaintiff or his solicitors were unaware of the existence of those relevant quantum documents required to be included under Schedule A. They had filed the list of documents in the EC Action which included all those documents well before they sent out the Letter of Claim.

46.Hence, I do not find the (unexplained) failures on the part of the plaintiff’s solicitors in this case acceptable at all.

47.Any claimant or his solicitors in a PI case should be aware that any half-hearted and half-baked attempt to purportedly comply with the Pre-Action Protocol, like what had happened in this case, would not be tolerated by the court. Such actions would only lead to unnecessary issue of proceedings; incurrence of unnecessary costs; and delay in bringing the case to an early conclusion, all of which are against the underlying objectives of the CJR. The claimant and his solicitors should be reminded that any unnecessary costs incurred or wasted as a result will very likely to be borne by them as clearly stated in §§9 and 147 of PD 18.1.

The constructive reply

48.In their written submission, the plaintiff’s solicitors argue that it was the defendant who had failed to follow the Pre-Action Protocol in that they had not provided a “constructive reply” to them as required under PD 18.1. In their view, it was that which led to the failure to engage in any meaningful pre-action discussions between the parties.

49.While on the one hand the plaintiff’s solicitors admitted that they have received but “overlooked” the Reply Letter, on the other hand they blamed the defendant for not sending them a reminder to remind them to reply to their Reply Letter.

50.The plaintiff also claims since the Reply Letter did not expressly state whether they would admit liability or not, therefore it was not a “constructive reply” within the meaning of §19 of PD 18.1.

51.I find the plaintiff’s above accusations rather absurd if not disingenuous in the circumstances of this case.

52.In my view, it is beyond any shadow of doubt that it was the plaintiff who has failed to observe the Pre-Action Protocol when they issued the Letter of Claim. He has, as now admitted by his solicitors, failed to include the critical information in the letter itself about the related EC Action. He has also failed to include some of the relevant quantum documents on injuries and income to enable the defendant to make a “constructive reply” to the Letter of Claim.

53.The defendant’s insurer stated in the Reply Letter that they were “still investigating the circumstances of the accident”. It is clear that they were asking the plaintiff to provide those crucial information and documents as part of the process of the investigation and determining whether to admit liability or not.

54.Hence, in my judgment, it would be unreasonable to expect an immediate “constructive reply” from the defendant when those crucial information and documents were still missing. It would be even more unreasonable to expect the defendant to give an answer on whether they are going to admit liability or not when it was the plaintiff who had failed to provide those crucial information and documents specified under Appendix A and Schedule A. In my view, it lies ill in the mouth of the plaintiff to say that it was the defendant who had failed to provide them with a “constructive reply” when the plaintiff was the one who had failed to provide the crucial information and documents under the Letter of Claim in the first place.

What amounts to a constructive reply?

55.As to the meaning of “constructive reply”, §19 of PD 18.1 clearly states what is not a constructive reply. It is obvious that a simple acknowledgement will not suffice. For example, if the insurer says “we have received the letter of claim and will take client’s instructions thereon”, that is not enough. The reply must go further. The meaning given to the word “constructive” in the Oxford English dictionary is “having or intended to have a useful or beneficial purpose”. I agree with the defendant that in the context of §19 the word “useful” probably has the best application. Hence, the defendant’s reply has to be useful in the furtherance of the objects of §19, to provide mutual disclosure of information and documents for attempting to settle the claim in whole or in part. I accept that this was what the Reply Letter sent by the defendant’s insurer on 11 May 2023 was trying to achieve.

56.The defendant refers to two cases which have looked at the meaning of “constructive” for the purpose of a constructive reply. They are Wong Shui Lam v Hospital Authority, unreported, HCPI 151/2009, (Master Roy Yu; 31 December 2009) and Lo Yuen Chong v IWS Environmental Technologies Ltd, unreported, HCPI 1070/2014 (Master J Wong; 21 July 2017). However, both of those cases can be distinguished from the present case. In both of those cases, there was a trail of correspondence passing between the parties. The problem in the present case is that there was only the Letter of Claim from the plaintiff and the Reply Letter from the insurer. Then, there was total silence on the part of the plaintiff after receiving the Reply Letter.

57.The defendant’s position is that once the insurer had given a reply, then the ball was in the plaintiff’s court to give a response thereto. The question is whether the initial reply given by the insurer in this case amounted to a constructive reply.

58.In the case of Wong Shui Lam, supra, the old PD 18.1 (v3) applied as the pre-action letter of demand was sent to the defendant in that case before the current PD 18.1 came into force. It is submitted by the defendant that there was an emphasis under the old practice direction on whether or not a defendant would admit liability, and if it did not to explain why.

59.In Wong Shui Lam, supra, the initial response in that case from the defendant was to ask for medical evidence and details of other workers involved. There had been a prosecution and the solicitors acting for the plaintiff in the initial letter and in repeated follow-up letters, asking whether the defendant would admit liability pointing to the prosecution and the result. The defendant failed to respond.

60.The distinction between that case and our present case is that there was correspondence going back and forth with repeated requests from the plaintiff as to whether the defendant would admit liability. It was only after proceedings were issued that the defendant finally did so. In other words, the plaintiff in that case had been at pain to achieve an admission of liability, without the necessity of drafting a statement of claim. Despite the constant urging from the solicitors for the plaintiff, the solicitors for the defendant in that case did not clarify their position on liability. At the end, the defendant was found to have failed to respond constructively to the plaintiff’s pre-action letters and was ordered to pay for the costs of the summons.

61.In my view, this is not the situation with the present case here. When proceedings were issued by the plaintiff in this case, liability was immediately admitted as, according to the defendant, these were the instructions given to the defendant’s solicitors when the Writ was passed to them. This is perhaps not surprising given the fact that the defendant had been convicted of careless driving resulting from the Accident. Should correspondence continued after the Reply Letter, then liability no doubt would have been admitted in this case. The defendant as the driver of the LGV who had driven his vehicle into the rear of the Other LGV which the plaintiff was then travelling on simply did not have a defence on liability. Hence, I find the subsequent issue of the Writ and the drafting, filing and serving of the SOC and SOD were all unnecessary.

62.I agree with the defendant that admission of liability is not a prerequisite for an initial reply to amount to a constructive response for the purpose of PD 18.1. In §19, it contemplates an initial constructive reply, and that thereafter over the next three months that the parties should communicate constructively and provide mutual disclosure of information and documents with respect to issues of liability and quantum. It is after the initial response and provision of documentation as necessary that potential defendants should be considering whether to admit liability, or dispute it or raise contributory negligence and should state their position in correspondence with the plaintiff.

63.In Lo Yuen Chong, supra, a letter of claim was issued on 28 August 2014, and the reply was given on 5 September 2014. In the reply, the defendant asked for the documents which were meant to be enclosed with the letter of claim on the basis that such documents were not in fact enclosed. On 12 September 2014, the plaintiff’s solicitors asked for copying costs and repeated a suggestion made in the letter of claim for joint medical examination. It appears that the original documents supposed to be attached to the letter of claim still had not been sent to the defendant’s solicitors because, on 15 September 2014, the defendant’s solicitors disagreed to pay the copying charges and said that they could not reply to the issue of joint examination without the documents. This seems to have been a most unhelpful way to conduct matters. In the same letter, the defendant’s solicitors said with respect to liability, they would revert in due course. The defendant’s solicitors then wrote to nominate a medical expert. Proceedings were then issued with no admission on liability by the defendant.

64.The master unsurprisingly held the defendant’s reply was not “constructive” in that case. It can hardly be said the parties had entered into constructive negotiations in that case with the defendant’s refusing to pay copying charges for documents sought from the plaintiff’s solicitors. Perhaps it was not totally helpful for the plaintiff’s solicitors not to proffer such documents. However, the parties seemed to have reached a pointless impasse where there was no genuine communication between them as to qualify with the requirements laid down by §19 of the PD 18.1.

65.Again, I agree with the defendant that this is not the situation in our present case here. There was simply no reply made by the plaintiff’s solicitors to the defendant’s request for information and documents as set out in the Reply Letter. Bearing in mind that they are all the basic information and documents that have been listed out in Appendix A and Schedule A which a plaintiff or his solicitors are expected to include in the letter of claim, they were necessary for the defendant or his insurer to properly investigate and assess quantum prior to the issue of proceedings, including whether to admit liability or not.

66.While the defendant can be criticized for not following up on its unanswered letter, in my view, the primary responsibility for the failure of communication prior to the issue of the Writ must lie with the plaintiff in this case. Although it is not clear whether there was a deliberate attempt to hide the fact that there was a related EC Action and the quantum documents from the defendant when the Letter of Claim was issued, I am prepared to give the benefit of the doubt to the plaintiff’s solicitors and assume that the failure to include those requested information and documents by the defendant in the Reply Letter was merely due to an oversight on their part.

67.However, this does not mitigate the failure on the part of the plaintiff’s solicitors. In my view, in such case, the principal burden lies with the claimant to include / disclose the basic information / documents specified under Appendix A and Schedule A of PD 18.1 in the letter of claim. In this case, such quantum documents were only in his possession or power to obtain and could not be obtained by any other means by the defendant, given that this was a collision involving vehicles and the defendant was not the plaintiff’s employer. Thus, this case can be distinguished from Lo Yuen Chong, supra, where the defendant was the plaintiff’s employer, and there had already been employees’ compensation proceedings, so documents should in part have been available to the defendant. That is however not the situation here and the principal fault of failure to comply with the Pre-Action Protocol in this case must therefore lie with the plaintiff.

Issue of proceedings and breach of §66 of PD 18.1

68.In this case, the plaintiff did not reply to the Reply Letter. Instead, the plaintiff issued proceedings on 22 August 2023 without any further communication with the defendant. The plaintiff did not enclose the documents as required under §66 of PD 18.1 when he issued the present proceedings. The plaintiff should have served with the Writ and SOC documents relating to (i) any statement of facts and finding of guilt; (ii) any post-accident earnings; (iii) pre-accident earnings; and (iv) any statement by the plaintiff and any other eye-witnesses, “if they are available and not already served under the Pre-Action Protocol”. [emphasis added]

69.As all the information and documents were available to the plaintiff or his solicitors at the time of issue of the Letter of Claim, there is in my view no reason why they could not have attached to and disclosed to the defendant at the time when issuing the Writ and the serving SOC in this case.

70.The plaintiff’s solicitors in their submissions try to rely on the fact that they were only required to file a list of documents under O 24 r 1 of the RDC after pleadings are closed.

71.With respect, this is a wrong interpretation of the Pre-Action Protocol. §66 of PD 18.1 requires a plaintiff to additionally serve together with the Writ and SOC documents set out in §65 and the documents specified in §66 (1) to (5) if “they are available and not already served under the Pre-Action Protocol”. They are not required to file a “list of documents” under O 24 r 1 of the RDC at this stage as misunderstood by the plaintiff. It is a completely different and separate obligation introduced by the Pre-Action Protocol.

72.Sadly, in this case, despite given another opportunity to do so under §66 of PD 18.1, the plaintiff and his solicitors have failed to disclose those documents before issuing the Writ and serving the SOC.

Sanctions for failure to comply with PD 18.1

73.The principal sanctions for failure to comply with the Pre-Action Protocol are set out in §§9 and 147 of PD 18.1.

74.§9 reads:-

“Non-compliance with this Practice Direction and the Pre-Action Protocol herein without good reason may lead to adverse costs consequences and/or sanctions including but not limited to those provided in Rules of High Court, Order 62, rule 8 (wasted costs order) and exercise of the Court’s power to stay proceedings”.

75.And §147 reads:-

“If the Court considers any party or legal representative has been at fault or in default in respect of any requirement, act or step specified in this Practice Direction, the Court may make such orders as to costs as it thinks fit, including an order under Rules of High Court, Order 62, rule 8, rules 9(4)(b) or 9A to be payable forthwith”.

76.The approach to be taken by the court in face of a failure to follow PD 18.1 can be gleaned not only from §§9 and 147 but also from §18 which deals with the consequences of a failure to send a letter of claim with sufficient information. §18 reads:-

“Subject to paragraph 21 hereof, in the event of a claimant failing to send a letter of claim, or failing to send a letter of claim which contains information reasonably required to enable the proposed defendant(s)' Solicitors or the insurer(s) concerned to commence investigation and thereby evaluate the merits of the claim and / or the necessity, relevancy and probative value of any expert medical report and / or expert medical examination proposed to be obtained and / or arranged, the claimant and / or his Solicitors may be required to justify the incurring of costs of commencing proceedings and / or of any expenditure incurred which is argued to be premature and, save in cases of urgency, further progress in the proceedings commenced by the claimant may be delayed for such period as the Court thinks fit for the claimant / Plaintiff to comply with the spirit and timescale of paragraphs 15 and 19 hereof”.

77.I agree with the defendant that the Pre-Action Protocol is self-contained and provides all that is needed for the parties to settle a case before commencement of proceedings. It means commencement of proceedings often is not necessary. In my view, it benefits all parties concerned to have the case settled early. Not only it will limit the costs the parties are going to spend on the case and save the court’s time, it also provides a framework to achieve an early settlement for a claimant who will able to obtain his fair and reasonable amount of compensation earlier without going through the trouble and expenses of issuing the proceedings. By doing so, he will be able to get on with his life much quicker.

78.Ignoring the Pre-Action-Protocol will give rise to sanctions. As HH Judge Marlene Ng (as she then was) stated in Siu Fook Cheong v Siu Kwok Fai, New World First Bus Services Limited, unreported, HCPI 768/2009 at §63, “Parties and/or practitioners should not expect the court to smile kindly on any unjustified attempt to sabotage the system of the case management envisaged under Practice Direction 18.1”.

Findings of the Court

79.Based on the above discussions, I find the issuing of the Writ and the subsequent filing and serving of the SOC and SOD in this case to be totally unnecessary had the plaintiff’s solicitors followed the Pre-Action Protocol.

80.I reject the plaintiff’s submission that the issuing of proceedings was inevitable because (i) liability had not been admitted by the defendant; and (ii) expert medical examination had not been carried out.

81.For reasons stated above, I find the failure of admitting liability on the part of the defendant in this case was entirely caused by the plaintiff’s failure to disclose the basic (but crucial) information and documents required of them under Appendix A and Schedule A of PD 18.1. Further, it was caused by his failure to respond to the perfectly reasonable request made by the defendant under the Reply Letter.

82.In my judgment, the fact that the plaintiff’s solicitors in their written submissions were willing to waive the costs of preparing the SOC and SOD really speaks for itself. With hindsight, they must have realized that they should not have issued the proceedings without first providing those relevant information and documents listed out in Appendix A and Schedule A. In my view, this tantamount to an admission of their failure in following the Pre-Action Protocol.

83.I would further reject the plaintiff’s submission that because this case would have been time-barred on 20 October 2023 and hence it was necessary for them to issue proceedings two months earlier on 22 August 2023. I have no hesitation to reject such argument on the following grounds: (i) had the plaintiff included all the required information and documents as specified in PD 18.1, there was no doubt that they would have plenty of time to consider whether to issue proceedings or not; (ii) had they respond to the Reply Letter in May 2023, they would still have plenty of time to engage with the defendant to see if some constructive communications could have been undertaken; and (iii) they could always issue a protective writ and then undergo the necessary negotiations under the framework of the Pre-Action Protocol.

84.The plaintiff also complains that the defendant failed to give the plaintiff any time to respond to the letter from the defendant’s solicitors dated 7 September 2023 and instead issued the Summons. The defendant says that in the circumstances here as described above, it was justified to proceed to issue the Summons and that it was merely following the natural prescribed mechanism facilitated by the District Court practice and procedure. I agree with the defendant on this as it was the plaintiff who has failed to follow the Pre-Action Protocol in the first place. They cannot now blame the defendant for taking action and asking the court to interfere in a timely manner.

CONCLUSION

85.In conclusion, I find the Letter of Claim issued by the plaintiff defective in that it had failed to contain all the basic information and documents specified under Appendix A and Schedule A of PD 18.1.

86.I further find the plaintiff failed to respond to the defendant’s reasonable requests made in the Reply Letter which led to the failure on the parties in engaging in any constructive communications for the 3-month period provided in §19 of PD 18.1.

87.I further find that the plaintiff had issued the proceedings, including issuing the Writ, preparing the SOC and SOD, pre-maturely without given the chance for the parties to engage in any meaningful or constructive discussions during the Pre-Action Protocol stage.

88.I also find that when the plaintiff issued the proceedings and serving the SOC and SOD, he had failed to serve the necessary documents containing such discovery as required by §66 of PD 18.1.

89.In my judgment, had the plaintiff complied with the Pre-Action Protocol, the issue of the Writ and the filing and serving of the SOC and SOD in this case most likely could have been avoided altogether. I agree with the defendant that the 4-month period between May (when the Reply Letter was sent by the defendant) and October (when the case will be time-barred) provides ample time for exchange of information, engagement of a single joint expert and negotiations.

90.I therefore find it in favour of the defendant and make an order in terms of the Summons.

Costs

91.§§9 and 147 of PD 18.1 clearly state that non-compliance of PD 18.1 and the Pre-Action Protocol without good reason may lead to adverse costs consequences and / or sanctions, including but not limited to those provided under O 62 r 8 of RHC, ie wasted costs order and exercise the court’s power to stay proceedings.

92.In my judgment, this is one of those classic situations where a wasted costs order is warranted as I found the present proceedings have been commenced prematurely and unnecessarily. However, the defendant’s solicitors have very reasonably agreed not to seek such a costs order under the Summons. In my view, the defendant has very good grounds to ask for a wasted costs order to be made against either the plaintiff or the plaintiff’s solicitors personally and on an indemnity basis in this case. The defendant instead asked for a costs order which is to disallow costs for preparation of the SOC and SOD only. The defendant however submits that in all the circumstances, it is most definitely entitled to its costs of and arising from the Summons.

93.Given the defendant’s concession, I am prepared to make a costs order on the basis as suggested by them. However, I would like to take this opportunity to remind any future claimant and / or his legal advisors to follow the Pre-Action Protocol to the letter, including the exact requirements under Appendix A and Schedule A. Failing to comply with them will likely lead to an adverse or wasted costs order made against either the claimant and / or his legal advisors.

94.Hence, I order that the plaintiff should bear the costs of preparing the SOC and SOD. I also order that the plaintiff should be responsible for the costs of the Summons as I consider that the issue of it could have been avoided had the plaintiff followed the Pre-Action Protocol.

95.I am prepared to order the costs in this case to be taxed on a party and party and not indemnity basis, which I would have ordered had it not been for the defendant’s concession. Such costs should be taxed if not agreed.

Messrs Yeong & Co, for the plaintiff

Messrs Munros, for the defendant