A UK High Court has decided that settlement of a claim for injuries sustained by a sub-contractor on a construction project would only extinguish a further claim against a hospital for alleged negligent treatment received following the work accident if the settlement satisfied the whole claim.
The defendant hospital brought an application to declare the further civil claim against it an abuse of process on account of the fact that the plaintiff had already accepted a settlement from the main building contractor in an earlier claim for his injuries. Alternatively, the hospital argued that the earlier settlement of the plaintiff’s claim meant that he had been compensated in full for his loss and should not be entitled to recover twice.
The court refused the application. It held that while parties who commit separate wrongful acts which cause or contribute to the same damage are correctly classified as concurrent wrongdoers, the earlier settlement with the main contractor had not served to fully compensate the plaintiff for his loss.
There was a pre-clinical negligence element to his claim, consisting of damage caused by the main contractor which only it could be held liable for. Also included was loss which occurred after the clinical negligence by the hospital but which would have occurred anyway, owing to the underlying work injuries. But, after the clinical negligence, there was additional loss which would not have occurred but for the clinical negligence of the hospital. The hospital and the main contractor could be held jointly liable for that additional loss as concurrent wrongdoers.
The settlement agreement did not serve to compensate the plaintiff fully for his loss.
The court ruled that a proper reading of the settlement agreement was that it did not serve to compensate the plaintiff fully for his loss. Because of contributory negligence, the building contractor was not liable for the whole of the plaintiff’s loss, nor had its settlement purported to satisfy the whole loss which arose in part due to the hospital’s alleged negligence.
The judgment reaffirms that settlement with one concurrent wrongdoer does not release other wrongdoers unless it is clear that it was intended to have that effect or unless the payment clearly satisfies the whole claim. In this case, it did not.
In South African common law, a distinction was made between joint wrongdoers – as persons who are jointly and severally liable for the same wrong – and concurrent wrongdoers, referring to persons whose independent wrongful acts have produced the same damage. Section 2(1) of the Apportionment of Damages Act 1956 abolished this distinction and instead refers to both types of wrongdoers collectively as ‘persons jointly or severally liable in delict to a third person for the same damage’.
The existence of other wrongdoers needs to be investigated before agreeing to settle a claim.
The UK case emphasises the need for caution when adjusting or settling claims for compensation where all role-players may not be involved at settlement stage or where not all parties to a dispute are cited in the legal proceedings. The existence of other wrongdoers needs to be carefully investigated and determined before agreeing to settle a claim – either in whole or in part.