The importance of getting the wording of pre-trial agreements right

31.01.19

A joint minute is a form of pre-trial agreement which is lodged with the court and sets out non-controversial matters between the parties in advance of a proof (trial) or other substantive hearing. The use of joint minutes is actively encouraged by the courts because such agreement can reduce the scope of any hearing and the number of witnesses required. Recently there has been increased pressure from the All Scotland Personal Injury Court to agree joint minutes before substantive hearings. However the implications of joint minutes can be overlooked and care should be taken to ensure that the agreement reflects parties’ intentions. 


A cautionary tale in this regard can be found in Lord Woolman’s recent judgement in McKenzie and others v Asda Group and DHL Services 2018 CSOH 102


That action involved a road traffic accident in which both the Asda driver and the DHL driver were found to be at fault. 


Liability was apportioned 75 percent to the Asda driver and 25 percent to the DHL driver.  The value of the claim had been agreed before proof (trial) by way of joint minute. The terms of the joint minute were as follows:


“In the event that the first and second defender, or either of them, is found liable to make reparation to the pursuers, quantum of damages is agreed to the date of proof in the following sums:


1.    £75,000 to the first pursuer 
2.    £20,000 to the second pursuer
3.    £5,000 to the third pursuer “


At trial, the second defender argued that the claims for the second and third pursuers (claimants) ought to be struck out on the basis that they represented pure economic loss (financial loss which arises from a negligent act where there is no physical damage to an individual or their property).


Lord Woolman rejected this argument for two reasons. In the first place the joint minute was a contract and the wording of the minute did not allow any qualifications; in terms of the contract all that was required for the obligation for payment to arise was for one of the defenders (or either of them) to be found liable for the cause of the accident. 


In the second place and in any event, both the second and third pursuers were seeking damages in respect of the outlays and costs incurred by them as owners of the damaged property. Therefore the second and third pursuers’ losses did not represent pure economic loss. 


Comment 


Although the joint minute in McKenzie did not ultimately make any difference to the outcome in that particular case, the judgement is a timely reminder of the importance of ensuring that the agreed joint minute is carefully considered and appropriately worded as parties will be bound by what has been agreed once the minute is signed and lodged.