QBE Technical Claims Brief March 2012
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Transcript of QBE Technical Claims Brief March 2012
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Contents
News 1
Jackson reforms postponed 1
Former Autofocus staff face application
for committal for contempt of court 2
Reporting of Injuries, Diseases and
Dangerous Occurrences Regulations
(RIDDOR) relaxation comes into effect 3
Government issues response on civil
justice consultation 4
Costs 5
Early Part 36 offer effective:
SG (A Child...) v HK Hewett High Court
(2011) 5
Interest on costs must run from date
of costs order Simcoe v Jacuzzi UK
Group Ltd Court of Appeal (2012) 5
Road Traffic Accident widely defined
- Griffin v Wisbech Phab Club
Supreme Court Costs Office (2011) 6
Liability 7
Passenger injured in course of crime
unable to claim: Delaney v Pickett and
Tradewise Insurance
- Court of Appeal (2011) 7
Vicarious Liability for Assault at Work:Richard Waddell v Barchester Healthcare
Ltd and Wallbank v Wallbank Fox
Designs Ltd - Court of Appeal (2012) 8
Quantum 9
92 year old Mesothelioma victim receives
significant General Damages Award:
Dennis Ball v Secretary for Energy and
Climate Change High Court (2012) 9
Disclaimer 10
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News
Jackson reforms postponed
A Government Minister has announced
in the House of Lords that the
implementation of the Jackson reforms,
scheduled for October 2012, is to be
put back until April 2013. Lord Wallace
a Liberal Democrat peer and Advocate
General for Scotland, explained that the
Government wished to allow enoughtime to get the complex details right and
for legal businesses to prepare for the
changes.
The Government however, was said to
be still firmly committed to the reforms.
It has rejected all amendments to the
Legal Aid Sentencing and Punishing
of Offenders (LASPO) Bill despite strong
pressure from peers, especially on clauses
43 and 45 dealing with Success Fees and
After the Event (ATE) insurance premium
recoverability. Lord Wallace said that the
reforms once in force (in England and
Wales) would save the NHS Litigation
Authority (NHSLA) 50 million a year.
Several peers raised concerns that
Qualified One Way Costs Shifting
(QOCS) was to be introduced by the Civil
Procedure Rules Committee without any
statutory instrument that could be debated
by Parliament. QOCS would protect
claimants from having to pay a successful
defendants costs unless their behaviour
was unreasonable or they failed to beat
a costs protective settlement offer. Lord
Wallace recognised that the rules would be
difficult to frame and that there was a risk
of satellite litigation but assured the House
that the Government would continue to
consult widely with stakeholders once the
details of the LASPO Bill were finalised.
He also confirmed that the 10% uplift
in general damages (another part of the
Jackson reforms intended to compensate
claimants for the loss of ATE and Success
Fee recoverability) would apply to the
Statutory Bereavement Award.
Comment: Delay in implementation
of reforms will mean a delay in costs
savings for compensators. The avoidance
of satellite litigation is however an
understandable goal.
Currently all amendments to the Bill are
withdrawn but these can be reintroduced
and a vote called for later in the process.
Peers remain concerned that vulnerable
claimants such as mesothelioma victims
and the parents of brain-injured children
could lose up to 25% of their damages in
costs once the reforms are in place. The
reforms are likely to face further challenge
and possible delay.
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Former Autofocus staff faceapplication for committal forcontempt of court
The long running dispute over the
authenticity of evidence provided by
Autofocus on Basic Hire Rates (BHRs)
to the courts on behalf of the insurance
industry appears to be coming to a
head. The credit hire company Accident
Exchange Ltd (AEL) has been alleging for
almost three years that tainted reports
supplied by Autofocus in Road Traffic
Accident cases in England and Wales
have deprived them of recoveries of
between 20 million and 50 million from
defendants. The reports allegedly gave
unrealistically low rates.
In December of 2011, AEL persuaded the
Court of Appeal that there was sufficient
evidence of malpractice for an appeal tobe allowed out of time on four test cases.
Seven more test cases went before the
Court of Appeal on 16 February.
The most recent development at the time
of writing was the obtaining of permission
by AEL for an application to have seven
former Autofocus staff committed
for contempt of court. The Divisional
Court, which granted permission for the
application, ordered that evidence of
widespread perjury presented to the court
by AEL should be referred to the Attorney
General.
The response from insurers has been
mixed. Two insurers are reported to have
settled some 900 AEL cases out of court
and at least two others are reviewing
old cases. Other insurers maintain
that notwithstanding any defects with
Autofocus evidence their settlements were
on the whole, fair and reasonable.
Comment: It seems almost inevitable that
further credit hire claims will be re-opened.
The number of claims affected is uncertain
but estimates of over 18,000 have been
reported. The battle between motor
insurers and credit hirers continues.
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Reporting of Injuries,Diseases and DangerousOccurrences Regulations(RIDDOR) relaxation comes
into effect
With effect from 6 April 2012, the current
reporting trigger for people injured at work
of more than three days incapacity will be
increased to more than seven. Employers
will still need to keep a record of any
workplace accident where an employee is
incapacitated for more than three days but
need no longer report these accidents.
Employers will now have fifteen days in
which to report the accident to the relevant
enforcing authority (Health and Safety
Executive, local authority, Office of Rail
Regulation) as opposed to the previousten days.
A Health and Safety Executive guide to
the amended regulations can be viewed at
www.hse.gov.uk/pubns/indg453.pdf
Comment: The changes bring the
regulations into line with the obligation
of an employee to obtain a Fit Note from
their GP for absences of over seven days
(see April 2010 Brief) and follows oneof the recommendations for reduced
bureaucracy contained in Lord Youngs
report Common Sense Common Safety
(see November 2010 Brief).
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Government issues responseon civil justice consultation
The Ministry of Justice (MOJ) consultation
on reforming civil justice in England and
Wales Solving Disputes in the County
Courts closed at the end of June
last year. The consultation covered a
number of important areas for potential
reform including aspects of Lord Justice
Jacksons reforms of litigation funding. The
long awaited Government response was
finally issued on 9 February this year.
Key features are:
ExtensionoftheupperlimitoftheMOJ
scheme for dealing with low value
Road Traffic Accident injury claims
from 10,000 to 25,000 subject
to further evaluation of the existing
scheme
ExtensionoftheMOJschemeto
cover low value Employers and Public
Liability injury claims subject to further
consultation
Extensionofthefixedrecoverable
costs regime to cases of higher
value and across a broad range of
claim types again subject to further
consultation
IncreasingtheSmallClaimsTrack
upper limit to 10,000 with a further
increase to 15,000 after evaluation of
the effects of the increase to 10,000.
This will not apply to personal injury
claims
AllSmallTrackclaimstobe
automatically referred to the Small
Claims Mediation service. Parties to
the claim will be required to cooperate
with a mediator but will not be obliged
to go through the full mediationprocess.
No implementation dates or timescales
have been given for any of the proposed
changes in the response itself but a
covering e-mail said that the Government
would look to introduce the changes
through secondary legislation such as the
Civil Procedure rules by April 2013.
Comment: The response has been
criticised by some commentators as
indecisive and as a missed opportunity
to help deliver a more cost effective and
efficient claims process. Despite recent
statements from several Government
representatives (including the Prime
Minister) to the effect that the Government
remains firmly committed to reform of civil
litigation, the reform process appears to
be losing some momentum.
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Costs
Early Part 36 offer effective:SG (A Child...) v HK Hewett High Court (2011)
The court was asked to rule on the
claimants entitlement to costs following
his acceptance of a Part 36 offer over two
years after it was made. The offer hadbeen stated as being open for acceptance
for the usual 21 days but was not
withdrawn thereafter. The Claimant was a
minor with a brain injury and the settlement
was approved by the court.
The Claimants solicitors argued that
they could not have advised their client
to accept the offer at the time because
the available medical evidence did not
give a certain enough prognosis. The
Defendants case was that the offer
was sufficiently generous that despite
the uncertainty of the prognosis it was
reasonable for the claimant to be put at
risk on costs.
The Court held that the normal costs
consequences of Part 36 should apply.
The claimant would be responsible for the
defendants costs from the date of the
expiry of the normal acceptance period
and the defendant would only have to pay
the claimants costs up to that point.
The Court had the power to depart from
the normal rule but only in exceptional
circumstances and the mere fact that
there was uncertainty over the value of the
claim was insufficient. The fact that the
claimant was a minor suing by a litigation
friend was not material.
Comment: Claimant solicitors will often
argue that they cannot consider early Part
36 offers without a firm prognosis. As this
case shows however, an early offer can
still be effective.
Interest on costs must runfrom date of costs order Simcoe v Jacuzzi UK GroupLtd Court of Appeal (2012)
The Court of Appeal has ruled that in the
County Court (in England and Wales),
interest on costs runs from the date the
court makes the order for costs and not
the usually much later date that costs are
assessed (or agreed).
The decision was made on the basis
that the County Court did not have the
power to alter the date of interest from the
general rule that it ran from the date of the
order. The fact of there being a Conditional
Fee Agreement in place and that the
claimant would not therefore be financing
the costs personally was held not to be
grounds for varying the date of interest.
Comment: This is not good news for the
paying party (usually defendants) who for
the last year or so have escaped paying
interest at 8% from the date of the costs
order. The case in question involved
costs of 74,000 with damages of only
12,750, prompting the Court of Appeal
to comment on the need for the more
proportionate costs regime that Lord
Justice Jacksons reforms are intended to
produce.
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Road Traffic Accidentwidely defined - Griffinv Wisbech Phab Club Supreme Court Costs Office(2011)
The claimant was injured when she
toppled over in her wheelchair as it was
being raised into a vehicle by a hydraulic
platform attached to it. The Phab Club
employee who was assisting the claimant
into the vehicle had failed to put on the
wheelchairs brakes or to secure the
claimants seat belt.
The claimant was awarded costs on
the standard basis but the defendants
appealed arguing that the accident was
a road traffic accident arising out of the
use of a motor vehicle. If the accident was
a road traffic accident then the claimant
would only be entitled to predictive costsunder Civil Procedure Rule (CPR) Part 45.
His Honour Judge Darroch upheld the
appeal finding that the accident had
arisen out of the use of a motor vehicle
and that CPR45 applied. The platform
was physically part of the vehicle and at
the time of the accident, the claimant was
being moved into it to be driven. Predictive
costs applied.
In reaching his decision, the judge
considered the Court of Appeal decision
in Dunthorne v Bentley and Cornhill
Insurance. In that case, the claimant had
been injured when the fist defendant ran in
front of his car to get some petrol for her
own vehicle. That claim was held to arise
from the use of a motor vehicle.
Comment: This case serves as a reminder
that the definition of a road traffic accident
is a broad one and the costs implications
of such a finding can be very helpful to
defendants.
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Liability
Passenger injured in courseof crime unable to claim:Delaney v Pickett and
Tradewise Insurance - Courtof Appeal (2011)
The claimant was catastrophically injured
whilst travelling in the first defendants car.
After the accident, both men were found
to be carrying commercial quantities of
cannabis. The first defendants insurers
declared his policy void when he admitted
he was a habitual drug user.
The insurers successfully argued that as
the use of the car had been to supply
drugs and the passenger must haveknown that the vehicle was being used in
the course of crime, they were entitled to
reject his claim under the Motor Insurers
Bureau (MIB) Agreement clause 6 (1) (e) iii.
The judge also found that the claim failed
on the principle of ex turpi causa non oritur
actio (an illegal or immoral act cannot bethe foundation for an action for damages).
The claimant appealed. The Court of
Appeal, found that on the facts the use of
the car was for the transportation of illegal
drugs and not for the driver to show the
claimant his new car as he had claimed.
The doctrine of ex turpi causa did not
however apply as the accident had come
about through poor driving and not directly
from the illegal activity. The claim failed
however because the MIB Agreement
exclusion applied. The vehicle was clearly
being used in furtherance and in the
course of a crime. The term crime in the
Agreement should not be read as being
restricted to serious crime as that would
make the clause largely ineffective.
Comment: L.J. Ward gave a dissenting
Judgment to the effect that only serious
crime precluded damages under the MIB
Agreement. Fortunately, for insurers, the
majority judgment was that the exclusion
did not only refer to serious crime. Had
the Court of Appeal found that it did, use
of the exclusion would have been greatly
limited in future.
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Vicarious Liability for Assaultat Work: Richard Waddell vBarchester Healthcare Ltdand Wallbank v Wallbank FoxDesigns Ltd - Court of Appeal(2012)
The two claimants in these conjoined
appeals sought damages from their
employers after being assaulted by junior
members of staff at work. Both claimants
had been unsuccessful at first instance.
In the Waddell case, the claimant was a
care home manager who had rung up
a member of staff to ask him to cover
for a sick colleague on a night shift.
The member of staff, who had been
drinking, took exception to the claimants
request. He refused to come in and later
telephoned the claimant to say that he
resigned. Some twenty minutes later,
he cycled into work and assaulted the
claimant. The judge at first instance held
that the assailant was acting on a frolic of
his own and that his employers were not
vicariously liable for his actions.
In the Wallbank case, the claimant was
assaulted when he asked a member of
staff to put more furniture frames into an
industrial oven for coating. The judge at
first instance again held that the employers
were not vicariously liable because the
assault took the employee outside the
course of his employment.
The Court of Appeal held that the
employers were not vicariously liable in the
Waddell case. The assailant had been off
duty at the time of the assault and there
had been a twenty-minute gap between
the request to cover the night shift and
the assault on the claimant. There was
insufficient connection between the
employees work and the assault.
In the Wallbank case, the court held that
the employers were liable. The assault had
been a direct reaction to an instruction
given in the workplace and although the
reaction had been irrational, it was still part
of employment.
Comment: Vicarious liability is a complex
and arguably expanding doctrine.
An employer can no longer escape
responsibility for the act of an employee
simply because it was illegal. The test is
one of the closeness of the connection
between an employees duties and his
wrongdoings. In the above cases, the
closeness of the assaults in time and
space to their employment was the keyfactor.
Our thanks go to Plexus Law who acted
for the defendants in the Waddell action
for their helpful note on this case.
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Quantum
92 year old Mesotheliomavictim receives significantGeneral Damages Award:Dennis Ball v Secretary forEnergy and Climate Change High Court (2012)
The claimant was a former National CoalBoard employee who was diagnosed as
suffering from Mesothelioma at the age
of 92. He sought damages for negligent
exposure to asbestos. All heads of
damages were agreed apart from his claim
for Pain, Suffering and Loss of Amenity
(PSLA), which the court was asked to
determine.
The defendants argued that due to the
claimants advanced age he had not
suffered much loss of amenity and that his
activities were little different from what they
would have been had he not developed
the disease. He had been forced to leave
his flat to live in a nursing home but this
might soon have happened anyway due
to his advancing age. An award at the
bottom of the current (tenth) Judicial
Studies Board (JSB) guidelines bracket for
Mesothelioma of 35,000 to 40,000 was
appropriate.
The claimants Counsel argued that
the claimants damages should not besignificantly reduced due to his age.
Although he had a short life expectancy,
his few remaining years were precious
to him and he had been deprived of his
independence. An appropriate award was
one at the lower end of the previous range
as published in the ninth edition of the JSB
60,000 to 65,000.
Taking all the factors into account the
judge made an award of 50,000.
Comment: this case has been reported
as opening the way for higher general
damages awards to the elderly. The
judge in this case did award more than
might have been expected but he took
into account the loss of the claimants
independence, which will not be a factor in
every case. The award still recognises that
the claimant suffered less loss of amenity
than would a younger man.
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Completed 23 February 2012 written
by and copy judgments and/or source
material for the above available from
John Tutton (contact no: 01245 272
756, e-mail: [email protected]).
Disclaimer
This publication has been produced by
QBE Insurance (Europe) Ltd (QIEL).
QIEL is a company member of the QBE
Insurance Group.
Readership of this publication does not
create an insurer-client, or other business
or legal relationship.
This publication provides information
about the law to help you to understand
and manage risk within your organisation.
Legal information is not the same as legal
advice. This publication does not purportto provide a definitive statement of the law
and is not intended to replace, nor may it
be relied upon as a substitute for, specific
legal or other professional advice.
QIEL has acted in good faith to provide
an accurate publication. However, QIEL
and the QBE Group do not make any
warranties or representations of any kind
about the contents of this publication, the
accuracy or timeliness of its contents, or
the information or explanations given.
QIEL and the QBE Group do not have
any duty to you, whether in contract, tort,
under statute or otherwise with respect to
or in connection with this publication or the
information contained within it.
QIEL and the QBE Group have no
obligation to update this report or any
information contained within it.
To the fullest extent permitted by law,
QIEL and the QBE Group disclaim any
responsibility or liability for any loss or
damage suffered or cost incurred by you
or by any other person arising out of or in
connection with you or any other persons
reliance on this publication or on the
information contained within it and for any
omissions or inaccuracies.
QBE Insurance (Europe) Limited and
QBE Underwriting Limited are authorised
and regulated by the Financial Services
Authority. QBE Management Services
(UK) Limited and QBE Underwriting
Services (UK) Limited are both Appointed
Representatives of QBE Insurance
(Europe) Limited and QBE Underwriting
Limited.
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