An update on forthcoming cases, consultations, legislation and key developments, including:
• Appeals and judgments to watch out for
• Lord Faulks’ speech at the APIL conference
• The Enterprise Act 2016
• The Third Parties (Rights Against Insurers) Act 2010
Shipping claim: fraudulent devices The case of Versloot Dredging BV v HDI Gerling Industrie Versicherung AG on the question of whether an insurer was entitled to resist a claim due to the use of a fraudulent device was heard on 16 March.
Employers’ liability insurance: directors’ liabilities On 12 April the Supreme Court heard an appeal from the Inner House of the Court of Session in the case of Campbell v Gordon. The issue is whether on the liquidation of a company, a director who has failed to obtain and maintain insurance on behalf of the company as required by statute, incurs personal liability to an injured party for loss arising from that failure.
Personal injury: landlord & tenant The appeal in Edwards v Kumarasamy was heard on 5 May to consider whether a landlord under a short lease of a premises, in respect of common parts of the building including the exterior of the building, was liable for his tenant’s injuries under the extended covenant implied into the tenancy by section 11(1A) of the Landlord and Tenant Act 1985.
Disability discrimination: buses FirstGroup Plc v Paulley concerns the Equality Act 2010 and the reasonable adjustments a bus company is required to make in order to accommodate disabled wheelchair users. The appeal is due to be heard on 15 June.
Personal injury fraud: setting aside settlement in Hayward v Zurich Insurance Company Plc the Court of Appeal rejected the insurer’s attempt to set aside a personal injury settlement when the claimant’s fraudulent exaggeration of his injury later came to light. The Supreme Court will hear this case on 16 June.
New - Portal claims: direct offers we understand that permission to appeal has been granted in the case of Gavin Edmondson v Haven Insurance which concerned an insurer engaging directly with claimants to conclude their claims which had been commenced in the Portal. The Court of Appeal ordered the insurer to pay the costs payable on settlement under the protocol scheme to the solicitors. Read more in our update on the Court of Appeal decision.
Supreme Court cases awaiting developments We are awaiting further details for a number of cases where permission to appeal has been granted in recent months:
Impact Funding Solutions Ltd v AIG Europe Insurance Ltd on whether professional indemnity insurers have to indemnify solicitors in respect of loans taken out to cover the cost of disbursements
Google v Vidal-Hall & Ors which concerns data protection and compensation rights and relates to a dispute over the user information through cookies via use of the Apple Safari Browser.
Moreno v Motor Insurers Bureau on the question of applicable law in a personal injury claim brought against the MIB following an RTA in Greece.
Mapfre Mutualidad Compania De Seguros Y Reaseguros SA & anor v Keefe on whether a Spanish insured can be joined into the English proceedings already brought against the Spanish insurer.
Swynson Ltd v Lowick Rose an accountants' negligence case
Brownlie v Four Seasons Holidays Inc involving jurisdiction issues arising out of a fatal accident claim.
NA v Nottinghamshire County Council concerning the abuse of a child by foster parents and the duties owed by local authorities in those circumstances.
Court of Appeal
Update - Employers' liability: training An appeal was heard in April in the case of Quantrell v TWA Logistics in which an employee was injured whilst driving a fork lift truck. Judgment was handed down on 22 April with the Court of Appeal dismissing the claimant’s appeal and upholding the first instance decision that there was no breach of duty.
Update - Motor liability: taxi passenger An appeal was due to be heard on 27/28 April in Hicks v Young in which the claimant sustained a severe brain injury when he fell from a taxi. The case examined issues of negligence, contributory negligence and false imprisonment, and both parties were granted permission to appeal. The hearing did not go ahead as the parties reached settlement.
Motor: ex turpi causa In Beaumont & Anr v Ferrer the High Court rejected the personal injury claims of two claimants who were seriously injured whilst attempting to fare jump a taxi. The case is due in the Court of Appeal on 28/29 June. See the DWF update on the HC decision.
Costs: fixed costs Bird v Acorn concerns the stage of fixed costs that should apply when a case drops out of the portal, is listed for disposal and then settles. The hearing will take place on 19/20 October.
Costs: fixed costs & the multi-track the question in Qader v Esure is whether fixed costs apply to a claim which starts under the low value personal injury claims protocol but subsequently proceeds on the multi-track. The appeal is listed for 25/26 October.
Motor liability: pedestrian children in AB v Main a car collided with children who had been playing at the side of the road but then moved into the road. The driver was held liable with a 20% discount for contributory negligence. The defendant has leave to appeal the finding of primary liability. The appeal will be heard on 15/16 February 2017.
Credit hire: rates evidence On 21/22 February 2017, the Court of Appeal will hear appeals in two important credit hire cases in respect of rates evidence and the approach that a court should take in the event that the rates evidence does not reflect the claimant’s case. Clayton v EUI Ltd andMcBride v UK Insurance Ltd.
Portal claims: £400 club Last month there were press reports of a decision in the Cardiff County Court in which the judge ordered reimbursement of pre 2013 stage 1 costs paid by insurers following an admission of liability, but following which the cases did not proceed to stage 2. The judge granted a leapfrog appeal to the Court of Appeal which has been given a hear-by date of 28 February 2017.
Update - Costs: assignment of CFA On 11 May judgment was handed down in Jones v Spire Healthcare Limited concerning the assignment of a conditional fee agreement. HHJ Wood QC allowed the claimant’s appeal, finding that both the benefit and burden of the CFA were assigned. You can read the judgment on Andrew Hogan’s blog.
Insurance contract law reform: insurable interest Last month the Law Commission and the Scottish Law Commission published a draft Bill following their review of the issue of Insurable Interest, having previously made proposals for reform in 2008 and 2011. They were asked to return to the issue due to the increased numbers of requests to write policies which include cover for children, cohabitants and to insure ‘key employees’ for substantial amounts. The draft Bill is intended to reflect the proposals set out in the issues paper and the Law Commissions have invited comments on the draft Bill by 20 May 2016 with a view to publishing a final draft Bill and report in autumn 2016.
Update - Fixed costs in clinical negligence claims With a consultation promised in early 2016 the Department of Health confirmed in January that its intention is to introduce Fixed Recoverable Costs in clinical negligence claims from 1 October 2016. Last month we reported that APIL had been told that the consultation was due to be published in May. We now understand that it is expected after the EU Referendum in June.
CMA legal services study In January the Competition and Markets Authority launched a market study to “examine long-standing concerns about the affordability of legal services and standards of service.” The CMA plans to examine three key issues: whether consumers can make informed decisions about buying legal services; whether they are getting enough protection and satisfactory redress if things go wrong; and whether current regulation is distorting competition in the market. Interim findings will be published in July 2016 with a final report due in December.
The following consultations are awaiting official responses:
MedCo: call for evidence Following the March publication of the outcome of the MoJ’s Call for Evidence relating to the operation of the MedCo Portal, the MoJ carried out a brief consultation, which was isolated to the definition of an MRO for the purpose of receiving instructions via MedCo. This short consultation closed on 15 April and a response is awaited. Read more about the outcome of the Call for Evidence in our update.
Claims Management Regulation: fees cap In February the MoJ published a consultation on proposals to cap the level of fees that regulated CMCs can charge consumers. It is currently only proposed that the cap should apply to the financial products and services claims sector. However, the consultation does invite views on whether fee controls in the personal injury sector should be considered as well. The consultation closed on 11 April.
Court fees increase: Justice Committee Inquiry The House of Commons Justice Committee has concluded its inquiry into the effects of the introduction and levels of increased fees across criminal courts, the employment tribunal and the civil courts. From a civil justice point of view the Committee was particularly interested in hearing about the effects on access to justice and the competitiveness of the legal services market internationally. Transcripts of all of the written and oral evidence can be found on the Inquiry webpage and the report of the Committee is now awaited.
Court fees increase: government response It was last December when the MoJ responded to the court fees consultation with proposals to implement fee increases of 10% across the range of civil proceedings but also to retain the cap on issue fees in money claims at £10,000. The implementation dates for these changes are still awaited.
Discount rate consultations The process of reviewing the discount rate and the methodology in setting it began in August 2012. In August 2014 it was revealed that a panel of experts was to be appointed to prepare a report giving expert investment advice to assist with the review but the panel only began its considerations in March 2015. An MoJ update in January confirmed that the expert panel’s report had been received and was being analysed by the MoJ to enable the Lord Chancellor to consider the matter further. However they were not in a position to indicate when an announcement on the rate would be made.
Update - Enterprise Bill: late payment of insurance claims This Bill which includes provisions giving policyholders a right to damages for late payment of claims received Royal Assent on 4 May. The late payment provisions will come into force on 4 May 2017. Read more in this month’s update from Jacquetta Castle and Robert Goodlad
Update - Third Parties (Rights against Insurers) Act 2010 The 2010 Act has now been updated by regulations (the Third Parties (Rights against Insurers) Regulations 2016) to reflect changes in insolvency law. The 2010 Act will finally come into force on 1 August 2016.
Motor insurance: implications of ECJ Vnuk ruling for UK legislation In late 2014 Transport Minister Robert Goodwill confirmed the government's intention (pdf) to amend the Road Traffic Act to comply with the Vnuk judgment. In October 2015 a ministerial response to a written question suggested that an impact assessment was being prepared ready for a consultation on any changes. Speaking last month at an Insurance Post Claims Club event the MIB’s technical head Paul Ryman-Tubb confirmed that attention has turned to the EU Motor Insurance Directive. He said that the EU Commission is beginning to understand the complexity of the judgment and it is likely that the Commission will make an announcement shortly. You can read more in this Post article(subscription required)
Update – End of 2015-16 Parliamentary session the 2015-16 session was prorogued on 12 May. This means that the Private Members’ Bills we have been following will make no further progress. These were the Negligence and Damages Bill concerning damages for psychiatric injury and fatal accident claims; and the two Mesothelioma (Amendment) Bills seeking an additional levy on insurers for mesothelioma research. We will keep an eye out to see if any are re-introduced in the new session.
Also on the horizon...
Update - Autumn statement: small claims track & low value whiplash claims We await the consultation on the government's proposals to remove the right to general damages for minor soft tissue injuries and to increase the small claims track limit for personal injury claims to £5,000. It is now expected in June with any subsequent reforms expected either in April or October 2017. In a keynote speech at this month’s APIL conference, Lord Faulks confirmed the government’s intention to proceed with these reforms. You can read more about this speech in Simon Denyer’s update
Update - MedCo According to the MedCo website, 20 users have been suspended from using the MedCo portal for bypassing the random allocation of experts process and have been invited to make appropriate representations regarding the serious breach of the MedCo authorised user agreement. The website also states that further users have been identified manipulating the search function and have also been asked to explain their conduct. This was something touched upon by Lord Faulks in the speech mentioned above. Hinting that more action could be on the way, he said“I am also pleased to note the clear channels of communication that are developing between MedCo and the SRA which will, I am sure, result in appropriate regulatory action being taken when necessary”. Lord Faulks also indicated that the government was pleased with the work of MedCo in its first full year. Those experts not accredited by 1 June 2016 will not be able to receive instructions from the MedCo portal.
Update - Insurance Fraud Taskforce Since publication of the Taskforce's final report in January (read more in our update) there have been a number of developments which appear to complement the work of the Taskforce. The Home Secretary announced the launch of a Joint Fraud Taskforce which is intended to create a new era of collaboration within the financial sector. We now have Carol Brady’s review of Claims Management Regulation, and in March the SRA issued a warning notice to solicitors of the ‘risk factors when dealing with personal injury matters’. Again in his APIL speech Lord Faulks confirmed that the government is currently considering the Taskforce’s recommendations with a view to taking firm action.
Update - Claims Management Regulation Carol Brady published the final report following her independent review of claims management regulation in March. The review had been commissioned by the Treasury and the MoJ to examine the perception of widespread misconduct among CMCs and make recommendations to improve the regulatory regime. At a recent meeting, Carol Brady indicated that a new team overseeing CMC regulation was already up and running within the FCA. She also indicated that there had been no opposition to the recommendation that it be made mandatory for all CMCs to disclose their referral source and that it was likely that this measure will be implemented.
Mesothelioma claims: LASPO funding provisions In late 2014 following a Justice Select Committee inquiry, the government decided not to end the exemption from the application of LASPO provisions on recoverability to mesothelioma claims. They said a further review of the likely effects of the funding reforms on mesothelioma claims would be carried out in due course and this will now form part of the Post Implementation Review of LASPO which is due to take place between April 2016 and April 2018. In the meantime FOIL wrote an open letter to the MoJ highlighting that the ongoing exemption is prejudicing mesothelioma claimants who are not receiving the 10% uplift on general damages and whose claims are not settling quickly. FOIL recommends a mesothelioma portal with an accompanying fixed costs regime to expedite straightforward claims.
NIHL claims: government action In June 2015 the ABI published its report Tackling the Compensation Culture: Noise Induced Hearing Loss, improving the claims system for everyone which highlighted concerns about the increasing numbers and cost of NIHL claims. In late July the MoJ announced that in response to those concerns it had asked the Civil Justice Council to consider the issue and make recommendations. They are to consider how a fixed costs regime for NIHL cases might work and how the handling of these claims might be improved. The group was aiming to prepare an initial report by November with a final report by April 2016 but we have not yet seen any initial recommendations. In the meantime, at a conference in March DWF examined the issues involved in dealing with fraudulent NIHL claims. Read more in our update
Fixed costs extension: Civil Justice Council Last month the Gazette reported that the Civil Justice Council had invited senior judges, lawyers, costs lawyers and academics to start looking at the ‘principle’ of extending fixed recoverable costs. This came after LJ Jackson’s speech in January proposing fixed costs in claims worth up to £250,000 and the government’s confirmed support for the principle of extending fixed recoverable costs. The first meeting was due to take place on 11 March and we await further details of the discussions. This was another issue on which Lord Faulks confirmed the government’s support during his APIL speech.
Civil Justice Council (CJC) review of Damages Based Agreements The government's response to the CJC review of DBAs is still awaited. In September the CJC made a number of recommendations but the main issue of interest going into the review was the government’s decision not to permit hybrid DBAs, and in particular concurrent hybrid DBAs. Under this type of hybrid “a law firm receives concurrent funding via both a DBA and via some other form of retainer (e.g. discounted hourly rates), in the event of the claim’s success; and receives discounted hourly rate fees in the event of the claim’s failure.” The Working Group was divided on whether these should be allowed but it concluded that “it was a policy decision which was ultimately one for the government” and “the government should be encouraged to evaluate the arguments in favour”. Read more in the CJC media release
Update - Civil Courts Structure Review: LJ Briggs' Interim Report In February Lord Justice Briggs published an interim report for his review of the structure of the civil courts. The headline recommendation was the introduction of an online court capable of handling claims with a value up to £25,000. This also fits with last year's recommendations from Richard Susskind's advisory group. Comments on the interim report were invited by 29 February with a final report due by the end ofJuly 2016. In the meantime, Briggs LJ has visited British Columbia and the Netherlands to look at similar initiatives in those places and he has been holding meetings with stakeholders around the country to obtain oral feedback on his proposals.
Motor Insurers' Bureau: new agreements In February 2013, the Department for Transport consulted on a review of the Uninsured and Untraced Drivers Agreements. We have previously reported on the new Uninsured Drivers Agreement which came into force for accidents occurring on or after 1 August 2015. The DfT also published a Supplementary Agreement to the Untraced Drivers Agreement, although work continues on a new Untraced Drivers Agreement, with a further DfT response expected in due course. The new agreements can be found on the MIB website. In the meantime, the agreements are the subject of an ongoing judicial review by the road victims’ charity RoadPeace for non-compliance with EU law.