Legal Watch:Property Risks & CoverageDecember 2015Issue 010

In this issue:

• Property Risks and Coverage seminar programme 2016

• Case Management/Relief from Sanctions - Update

• A contribution claim conundrum: where to sue?

• The importance of issuing proceedings in the correct court

• London iTree Urban Forest Survey

• Riot Compensation Bill 2015-2106- Update

Contact usIf you would like any further information on the cases or articles featured in this issue, please contact:

Paul Cha

T: 0207 469 6235E: Paul.Cha@plexuslaw.co.uk

Robert Kay

T: 020 7469 6256E: Robert.Kay@plexuslaw.co.uk

Marise GellertT: 020 7469 6249E: Marise.Gellert@plexuslaw.co.uk

IntroductionJohn Osborne had it wrong. So as we move into 2016, it has to be all about looking forwards very positively for myself and my stalwart ‘Property Risks and Coverage Team’ here at Plexus Law, as we now are.

Despite a year marked by some obvious and undeniable turbulence, the PRC team members have continued to excel and have not waivered once in keeping their promises to our clients and to one another. And as someone once said, “what doesn’t kill you makes you stronger”.

In fact, that turbulence aside, 2015 has been another hugely rewarding year in both terms of the work entrusted to us and the development of the team. We have seen new partners join, both organically, as in the case of Alison Heard, and through lateral gain, as in the case of Robert Kay.

The scope and scale of work undertaken has broadened and deepened, with new panel status gains and the development of our international credentials. The team as a whole is now recognised as a fully-fledged and leading unit in its sector by the major client guides. A great achievement for a team only formed through merger two years ago.

We in PRC look forward to 2016 and to continuing to do battle on behalf of you, our clients, with only renewed energy and determination and having been further forged by fire.

Thank you for your undiminished support that we promise again to repay to you instruction by instruction.

Richard Houseago

Practice Head Property Risks and Coverage

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This month we consider two recent cases on case management/relief from sanctions. We also take a brief look at the London iTree Urban Forest Survey and provide an update on the progress through Parliament of the Riot Compensation Bill 2015-2016.

Thanks go to Paul Cha for his article on XL Insurance Company SE (formerly XL Insurance Company Ltd) v AXA Corporate Solutions Assurance and to Robert Kay for his article on when cases should be issued in or transferred to the TCC following the case of Chliaifchtein v Jessop.

Finally, set out below are details of our forthcoming seminars, including our National Conference on 12 May 2016. The seminars are free to attend and will be followed by drinks. Please circulate the programme to any of your colleagues who may be interested in attending.

Here are the hyperlinks you can use to book your place:

To book your place for our Leeds seminars email: kirandeep.kaur@plexuslaw.co.uk

To book your place for our London seminars email: Alison.Heard@plexuslaw.co.uk

To book your place for our Manchester seminars email: Chris.Heitzman@plexuslaw.co.uk

If there are any topics not currently on the Seminar Programme which you would find useful please let Alison Heard know so that we can add them to our next Seminar Programme.

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Property Risks and Coverage seminar programme 2016

Date Location Seminar To book your placeWednesday 13 Jan 2016

5.30pm

Leeds

Radisson Blu Hotel

1 The Light

The Headrow

Leeds LS1 8TL

Claims handling:

Obtaining and preserving evidence

Differences in Property Claims North and South of the Border:

Key differences between Scottish and English property damage claims across the major perils of floods, fires and defective products; limitation and costs.

Followed by drinks

Email:

kirandeep.kaur@plexuslaw.co.uk

Thursday

4 Feb 2016

5.30pm

London

Plexus Law

Peninsular House

30-36 Monument Street

London EC3R 8NB

Claims handling:

Obtaining and preserving evidence

Differences in property claims north and south of the border:

Key differences between Scottish and English property claims across the major perils of floods, fires and defective products; limitation and costs.

Followed by drinks

Email:

Alison.Heard@plexuslaw.co.uk

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Wednesday

24 Feb 2016

5.30pm

Manchester

Plexus Law

21st Floor City Tower

Piccadilly Plaza

Manchester M1 4BT

Insurance Act 2015:

The practical effect on claims handling

Insurance contract terms and conditions:

How to identify different terms in insurance contracts, their legal effect, warranties – pre and post Insurance Act 2015

Third Parties (Rights Against Insurers) Act

Followed by drinks

Email:

Chris.Heitzman@plexuslaw.co.uk

Thursday 16 March 2016

5.30pm

Leeds

Radisson Blu Hotel

1 The Light

The Headrow

Leeds LS1 8TL

Fire claims:

Ignis suus

S86 Fires Prevention Metropolis Act 1774 – accidental fires?

Rylands v Fletcher

Causation

Tactical considerations

Followed by drinks

Email:

kirandeep.kaur@plexuslaw.co.uk

Thursday

12 May 2016

1.30 pm –

7.00 pm

London Stock Exchange

10 Paternoster Square

London EC4M 7LS

National Conference

Speakers

Andrew Moncrieff (Hawkins)

Graham Eklund QC (4 New Square)

Catherine Rawlin (RGL)

Imogen Swain (RGL)

Robert Kay (Plexus Law)

Drinks and canapés reception

Email:

Alison.Heard@plexuslaw.co.uk

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Case Management/Relief from Sanctions – UpdateR (on the application (1) Frank Kigen (2) Janet Cheruiyot) V Secretary of State for the Home Department [2015] EWCA Civ 1286

This is a Court of Appeal decision in respect of a judicial review that deals with the impact of delays caused while awaiting decisions from the Legal Aid Agency on a relief from sanctions application. The Court of Appeal made it clear that, notwithstanding this was a judicial review case, the position was the same in public law and private civil law proceedings, so it is of wide application.

Background The claimants’ application for permission to seek judicial review in respect of a refusal of permission to remain in the UK had been refused because it was submitted a day late. They were also late in applying to have the refusal reconsidered at an oral hearing. That application, which should have been made within 9 days, was made 13 days late because the claimants were awaiting a decision from the Legal Aid Agency about an amendment to their legal aid certificate. They therefore applied for an extension of time. The judge refused, but granted permission to appeal.

The claimants submitted that litigants awaiting a Legal Aid Agency decision were in a different position from litigants in person and could not be expected to deal with matters themselves.

Appeal decisionThe Court of Appeal held the fact that a litigant was awaiting a funding decision by the Legal Aid Agency was not a complete answer to his failure to comply with a procedural requirement but was simply a factor to be taken into account.

An inability to instruct solicitors because of a shortage of funds was not a good reason for a failure to comply with the rules, and a litigant who was awaiting a Legal Aid Agency decision was in essentially the same position as a litigant in person, following the case of ZP (South Africa) v Secretary of State for the Home Department [2015] EWCA Civ 1273. Where solicitors were appointed, those solicitors had to either take the necessary steps to lodge forms promptly, or advise their clients to lodge them themselves.

In this particular case the appeal was ultimately allowed, granting relief, but only because the first instance judge had erred in other respects and the Court of Appeal exercised discretion afresh.

CommentThe decision is helpful in showing that litigants who have applied for, or received, legal aid are in no different position from other parties and must take whatever steps are necessary to comply with deadlines or apply timeously for extensions of time.

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Case Management/Relief from Sanctions – Update continuedCommissioner of Police of the Metropolis V Abdulle & Ors [2015] EWCA Civ 1260

Again, this was a Court of Appeal decision, this time in relation to a first instance decision not to strike out a claim for various failures to comply with directions, such that the trial date was lost. The appeal raised the issue of the width of discretion given to a first instance judge when deciding whether or not to strike out a claim for procedural failures and the grounds upon which an appeal court could or should interfere with that exercise of discretion.

BackgroundThe respondents had brought a claim against the appellant, the Commissioner of Police of the Metropolis, alleging that police officers had unlawfully detained and used excessive force against them. However, there was considerable delay in progressing the claim, much (but not all) of it attributable to the respondents or their solicitors. A trial window was fixed but the respondents failed to file a pre-trial checklist or pay the listing fee. They also failed to communicate with the appellant regarding preparations for trial, including the preparation of a bundle. The only reason the claim was not automatically struck out under CPR r.3.7(4), which provides automatic sanctions for the non-payment of certain fees, including the listing fee, was because no notice of default had been served on the respondents, as was required pursuant to CPR r.3.7(2).

The trial date was vacated and the respondents failed to comply with a costs order made against them. The appellant applied for the claim to be struck out under CPR r.3.4(2)(c), on the basis that there had been a failure to comply with a rule, practice direction or court order; the failures to file the checklist, pay the fee or prepare a bundle.

At first instance the judge found that whilst the respondents’ solicitors’ behaviour was worthy of real criticism, as the

claim was effectively ready for trial and was a substantial claim, it should be allowed to continue, albeit on terms.

On appeal it was argued that the loss of the trial date was particularly serious. That had been caused by the respondents’ default without good reason and outweighed the reasons the judge had considered tipped the balance into allowing the claim to proceed.

Appeal decision The Court of Appeal made it clear that had it been considering this application at first instance, it would have struck out the claim. However, in a case management decision where the balance was a fine one, an appeal court should respect the balance struck by the first instance judge unless it could be shown that the decision of the judge at first instance was perverse.

Here, it was not suggested that the judge had overlooked any relevant factor, or taken into account irrelevant factors, nor was it suggested that the judge misdirected himself in law. The appellant’s submissions had concerned the weight the judge had attributed to the various factors that he did take into account in exercising his discretion.

The Court of Appeal made it clear that it would not lightly interfere with a case management decision: that approach applied to decisions to grant or refuse relief from sanctions under CPR r.3.9 and to decisions on whether to strike out under CPRr.3.4(2)(c), following the cases of Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537, [2014] 1 W.L.R. 795 and Chartwell Estate Agents Ltd v Fergies Properties SA [2014] EWCA Civ 506, [2014] C.P. Rep. 36.

“...where the balance

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was a fine one, an appeal court should respect the balance struck by the first instance judge unless it could be shown that the decision of the judge at first instance was perverse.”On that basis, the appeal was dismissed.

CommentThis case makes it clear that the fact that in a finely balanced case others can disagree, is not sufficient to justify a decision being overturned; that is precisely the point of the balance being ‘fine’ and it does not automatically render the first instance decision perverse.

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A contribution claim conundrum: where to sue?XL Insurance Company SE (formerly XL Insurance Company Ltd) v AXA Corporate Solutions Assurance [2015] EWHC 3431 (Comm).

An insured may sometimes find itself with the benefit of more than one insurance policy covering the same loss, particularly in the case of multinational corporations which take out cover for their subsidiaries and affiliates under global programmes of insurance.

Typically, where such instances of double insurance arise under liability policies, an insurer against whom the claim is made is liable to pay the full amount of the claim (as if his policy stood alone) but once paid he is entitled to an equitable contribution from other insurers of the same loss. In XL v Axa such an issue of contribution arose.

BackgroundOn 12 September 2008, a train collision occurred in California involving a passenger train operated by Connex – a Delaware company. Connex was an affiliate of Veolia – part of the French Veolia Group – and traded locally as Metrolink.

XL insured Metrolink (including Connex) under a local policy. Axa (the French domiciled insurer) insured Veolia (including Connex) under a separate policy. Injured passengers claimed against Connex in California.

XL (from London) paid its market share of the liabilities to Connex and Metrolink into an Interpleader fund (it was accepted that payment into the fund was equivalent to the payment out to the insured). Axa refused to pay likewise on the basis that it was not liable under its policy.

XL subsequently commenced proceedings in England and claimed a contribution from Axa in respect of those elements which were double insured.

Axa challenged the jurisdiction of the English courts to determine such proceedings – and contended that it should

have been sued in France under Article 4 of Brussels I Recast. Article 4(1) of Brussels I Recast provides that:

“Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State.”

There are a number of exceptions to this general rule including as set out in Article 7(1) and (2) of Brussels I Recast. Article 7 provides that:

“A person domiciled in a Member State may be sued in another Member State:

(1) (a) in matters relating to a contract, in the courts for the place of performance of the obligation in question

(b) for the purpose of this provision and unless otherwise agreed, the place of performance of the obligation in question shall be:

• in the case of the sale of goods, the place in a Member State where, under the contract, the goods were delivered or should have been delivered

• in the case of the provision of services, the place in a Member State where, under the contract, the services were provided or should have been provided

(c) if point (b) does not apply then point (a) applies

(2) in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur”

Axa disputed the jurisdiction on the basis that the claim was a ‘matter relating to a contract’ (within Article 7(1)), i.e. the underlying insurance contracts between XL and Axa and its respective insureds, and that the place of performance of the ‘obligation in question’ was not England.

Alternatively, it contended that the claim for contribution was not a matter relating to ‘tort, delict or quasi-delict’ within Article 7(2) but if it was then the place where the relevant ‘harmful event’ occurred was not England.

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XL contended that its claim was one which related to ‘tort, delict or quasi-delict’ and that the place where the harmful event occurred was England. However, in the event that the claim related to a contract, then the place of performance of the obligation was England.

In order to decide whether the court had jurisdiction under Article 7(1) and Article 7(2), the judge considered the very nature of a contribution claim.

Was the claim a matter relating to a contract?The judge noted that Axa did not have any contractual obligation to make any contribution to XL – the judge was not persuaded that Axa’s underlying insurance with its insured (‘somewhere in the background’) was relevant as it did not form the basis for the contribution claim in question. Accordingly, it could not be said that the claim was a matter ‘relating to a contract’ and therefore it did not fall within Article 7(1).

Was the claim a matter relating to tort, delict or quasi-delict?The judge approached this question on the basis of seeking to identify the ‘harmful event’, i.e. some event caused by the defendant which causes damage to the claimant, resulting in a liability for the ‘harmful event’ – since if it was not possible to do so then that strongly suggested the matter was not covered by Article 7(2).

The judge took the view that it was not sufficient that there was some ‘harmful event’ in the background – i.e. the injuries caused to the train passengers by Connex / Metrolink.

“...it was not sufficient that there was some ‘harmful event’ in the background...”

In his view, the contribution claim arose by operation of law – which did not depend on a request for payment and a refusal – it simply depended upon over payment where there was another insurer. He refused to characterise the ‘overpayment’ as a ‘harmful event’. Accordingly, it was not necessary for him to decide where the harmful event occurred.

Comment Axa (the French domiciled insurer) successfully challenged the jurisdiction of the English court to hear and determine the contribution proceedings brought by XL.

The judge considered the true nature of contribution claims (which arise between insurers in the case of double insurance) and he gave some helpful insight in to the accrual of such causes of action.

He concluded, in the light of conflicting judicial authority, that contribution claims do not fall within either Article 7(1) or Article 7(2) and therefore that any such claims against an insurer domiciled in a Member State must be made in the courts of that Member State. It remains to be seen whether this important issue will be subject to an appeal.

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The importance of issuing proceedings in the correct courtIn Chliaifchtein v Jessop [2015] EWHC 3167 (TCC), Coulson J sitting in the in the Technology and Construction Court (TCC), provided guidance on when to issue in or transfer to the TCC.

BackgroundThe underlying facts of the case were complex, relating to a building project in Belgravia and Party Wall Act issues between the neighbours. Thankfully, as Coulson J said, “it [was] happily unnecessary to deal with very much of the detail”. The issue was whether to transfer the claim for approximately £17,000 brought in the Central London County Court into the TCC in the High Court. The basis of the application was there was a point of importance and complexity which justified its transfer.

DecisionCoulson J’s comments regarding complex or difficult cases, are of particular interest. His Lordship held that:-

“As a general rule, basic costs considerations will usually take precedence over points of alleged legal interest or complexity. It is now very rare for claims worth less than £250,000 to be allowed to remain here, and there are some who think that, with the increasing pressure on the resources in both the QBD and the Rolls Building, that cap will have to be increased”.

“As a general rule, basic costs considerations will usually take precedence over points of alleged legal interest or complexity.”

Whilst CPR.r.30.3(2) sets out the relevant matters to be taken into account by the court when considering any transfer, the specialist nature of the TCC means that the existing practice is that only claims above £250,000 are likely pass the threshold, subject to certain, non-exhaustive, exceptions. Namely:

• Cases involving adjudications, including enforcements and arbitrations, because of a need for judicial precedent

• International cases involving non-resident parties or foreign projects or developments

• Cases involving new or difficult points of law in TCC business or which have issues of technical complexity suitable for a High Court judge

• Any test case or case which will be joined with others which will be treated as test cases (for example a fire caused by an appliance or vehicle where the value of the claim may not be that great but it may be joined with others in which similar points are taken)

• Public procurement cases

• Part 8 and other claims for declarations

• Claims which cannot readily be dealt with in a county court or civil justice centre by a designated TCC judge

• Complex nuisance claims brought by a number of parties, even when the sums claimed are small

• Claims for injunctions

• If the case has been commenced in the TCC list in London, the court will retain the case if there is a good reason so to do

CommentThis case therefore provides a warning to claimants about commencing or applying to transfer proceedings to the TCC in low value cases. It is unlikely that cases under £250,000

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will be allowed to remain in the TCC in the Rolls Building or be transferred there (and that threshold may even increase): they can be commenced in the county court or a district registry with a designated TCC judge. Accordingly, unless one or more of the above exceptions apply or there are other very good reasons, basic costs considerations are likely to outweigh points of alleged legal interest or complexity.

This case serves as a salutary reminder that legal advice should be taken before commencing a claim; not just to ensure the claim is well-founded but also that the correct venue is chosen. To do otherwise may be incurring costs which are not just unnecessary but also unlikely to be recoverable.

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London iTree Urban Forest SurveyThe results of the London iTree urban forest survey were published on 2 December 2015 in the House of Lords. The report is the culmination of years of work of a partnership project including Forestry Commission, Greater London Authority, London Tree Officers Association, Trees for Cities, Tree Council, Natural England and Treeconomics and is based on a field survey undertaken by volunteer teams during Summer 2014.

A random selection of 725 plots was chosen across inner, outer and greater London; these included any areas of an urban forest (trees and shrubs in London’s parks, gardens, woodlands and open spaces). Detailed records of trees and vegetation within the plots were taken; those details including the stem diameter, tree height, size of tree canopy, condition of the tree, land use, amount of shrub and ground cover.

A pdf copy of the report (which runs to some 84 pages) can be found at http://www.forestry.gov.uk/pdf/2890-Forest_Report_Pages.pdf/$FILE/2890-Forest_Report_Pages.pdf

The i-Tree project seeks to:

• Promote London’s urban forest and the benefits it provides

• Provide a pan London picture of tree and woodland cover

• Engage volunteers in trees and further opportunities to plant and manage them

• Provide verifiable economic values to the benefits that the urban forest provides

• Establish values that are a pre cursor to proper asset and risk management

• Establish parity between the services that the urban forest provides with other recognised urban infrastructure such as street lighting and highways

It remains to be seen how the results of this report will impact upon tree root subsidence and/or Tree Preservation Order

cases but it is likely only to be a question of time before it is referred to in expert evidence in relation to amenity value.

www.plexuslaw.co.uk

Plexus Law is a trading name of Plexus Law Limited, a limited company incorporated in England & Wales. Reg No: 09641584. Registered office: Renaissance, 12 Dingwall Road, Croydon, CR0 2NA.Plexus Law Limited is authorised and regulated by the SRA (SRA No. 626521)

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Contact usFor information on articles and cases featured in other editions of Property Risks and Coverage Newsletters, please contact:

Marise GellertPartnerT: 020 7469 6249E: Marise.Gellert@plexuslaw.co.uk

Riot Compensation Bill 2015-2106 – UpdateThe Bill continues to make its way through Parliament and passed its second reading through the House of Commons on 4 December 2015. The second reading is the first opportunity for MPs to debate the main principles of the Bill.

The Bill will now be committed to a public bill committee where each clause and any amendments to the Bill may be debated. A date for the committee stage is yet to be announced.

As the Bill started in the House of Commons, it must pass through all of the stages in the House of Commons before it progresses to the House of Lords and, ultimately, receives Royal Assent. Clearly that will not now happen until 2016, at the earliest, subject to debate in the two Houses and any subsequent amendment.

The Bill can be found at: http://www.publications.parliament.uk/pa/bills/cbill/2015-2016/0013/15013.pdf

We will report further significant developments as and when they happen.