Change in factual basis of case must be disclosed

LAW REPORT: 21 January 1997
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Vernon v Bosley; Court of Appeal (Lord Justice Stuart-Smith, Lord Justice Evans, Lord Justice Thorpe) 13 December 1996

Where the material facts on whose basis a civil action had been conducted were known by the plaintiff to have altered, he was under a duty to disclose the fact to the defendant and the judge.

The Court of Appeal by a majority (Lord Justice Evans dissenting) allowed an appeal by the defendant, Katherine Sarah Bosley, and reduced from pounds 1,332,231.59 to pounds 541,493.70 the damages awarded by Mr Justice Sedley on 30 Janaury 1995 to the plaintiff, Peter Frazer Vernon.

Dermod O'Brien QC and Daniel Pearce-Higgins (Howard Palser Grossman Hermer & Partners) for the defendant; David Blunt QC and Jonathan Marks QC (Osborne Clarke, Bristol) for the plaintiff; Diana Cotton QC (Treasury Solicitor) as amicus curiae.

Lord Justice Stuart-Smith said the plaintiff's claim was in respect of nervous shock or psychiatric injury suffered by him after witnessing the death of two daughters in a car accident. The defendant did not deny negligence but disputed that the plaintiff suffered post- traumatic stress disorder, as opposed to an extreme grief reaction, and argued that his subsequent psychological problems had other causes.

The appeal court had already handed down draft judgments reducing the judge's award but no final order had been drawn up when, on 17 April 1996, Mr O'Brien received from an anonymous sender copies of a judgment given by Judge McNaught in Gloucester County Court on 6 January 1995 in proceedings between the plaintiff and his wife relating to their children, and a judgment of the Court of Appeal on 4 July 1995 affirming his decision. These judgments revealed that the evidence before the family court had been that the plaintiff's psychiatric health had dramatically improved and he was substantially if not fully recovered.

The defendant applied for, and was granted, a rehearing of the appeal against Mr Justice Sedley's judgment. Further evidence was admitted as to the plaintiff's mental condition at the time that judgment was given. Their Lordships concluded that the plaintiff had made a substantial recovery and that evidence of that recovery should have been disclosed to the defendant's advisers before Mr Justice Sedley gave judgment.

It was the duty of every litigant not to mislead the court or his opponent, not just by giving evidence known to be untrue, but also by leading the court to believe a certain state of affairs, once believed to be true, but now no longer so. That duty continued until the judge had given judgment.

The plaintiff's case had been argued before Mr Justice Sedley on the basis of evidence which the plaintiff knew at the time, and his legal advisers knew shortly afterwards, did not represent the true position. Unless the altered position was communicated to the judge there was a risk that he would give judgment on a basis that was no longer true, and that was what happened here.

Mr Blunt sought to rely on the difference between actively misleading and passively standing by and watching the court being misled. The classic example of the distinction was where a barrister knew his client had previous convictions but the court and prosecution did not: he was not obliged to disclose the convictions but he must not suggest his client was a man of good character.

Similarly, neither the litigant nor his lawyers in a civil case were bound to call witnesses whose evidence did not support their case.

But where the case had been conducted on the basis of certain material facts which were an essential part of the case, in this case the plaintiff's condition at the time of the trial and the prognosis, which were discovered before judgment to be significantly different, the court was being misled, not by the defendant's failure to put before it material of which she could or should have been aware, but by the plaintiff's and his advisers' failure to correct an incorrect appreciation which the court would otherwise have.

His Lordship accepted that the plaintiff's counsel had not deliberately intended to deceive the court. But they made a serious error of judgment in failing to advise him of the need to disclose. By the time the case came before the appeal court, they should have appreciated that they could no longer seek to uphold the judgment.