An update on forthcoming cases, consultations, legislation and key developments, including:
- New appeals and judgments to watch out for.
- Carol Brady's report on Claims Management Regulation
- Civil Justice Council consideration of fixed costs extension
- Amendments to costs budgeting and management rules
- £5 million for new mesothelioma research centre
2011 Riots: consequential loss of profit The Mayor's Office for Policing and Crime v Mitsui Sumitomo Insurance Co (Europe) Ltd & Ors was heard on 21 January. The issue is whether claimants are entitled under the Riot Damages Act 1886 to obtain compensation for not only for repairing the damage done to property during a riot but also for any loss of profit which may consequently have flowed from that damage, or for other indirect adverse economic consequences of the riot.
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.
Update - 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.
Update - 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.
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
- Edwards v Kumarasamy on the liability of a landlord for the injuries of a sub-tenant sustained in a tripping incident on a path outside a block of flats.
- 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.
Court of Appeal
Update - Procedure: service of claim form In Barton v Wright Hassall Solicitors the question is whether ineffective service by email should be deemed to be good service given the claim was effectively brought to the notice of the defendants. Judgment was handed down on 23 March and the Court of Appeal refused to validate the ineffective service.
Part 36: costs Webb v Liverpool Women’s NHS Foundation Trust was a clinical negligence case arising out of the events which occurred during the birth of the claimant. We suspect though that the appeal relates to the subsequent costs judgment. Although the claimant failed on a number of specific allegations, she recovered damages in full and beat her own Part 36 offer. The judge made a percentage costs order to reflect the failure to establish all the allegations but awarded the claimant Part 36 rewards in full. The hearing took place on 15 March and judgment is awaited.
Professional indemnity insurance: aggregation The case of AIG Europe Limited v OC320301 LLP (formerly The International Law Partnership LLP) & Ors concerning the aggregation provision in the Minimum Terms and Conditions of Professional Indemnity Insurance for Solicitors and Registered European Lawyers in England was heard this week in the Court of Appeal. Read more in the DWF update on the HC decision
Employers liability: training An appeal is due to take place on 12/13 April in the case of Quantrell v TWA Logistics in which an employee was injured whilst driving a fork lift truck. The case includes issues concerning the claimant's training.
Motor liability: taxi passenger An appeal will 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.
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 now going to the Court of Appeal on 28/29 June. See the DWF update on the HC decision.
Costs: fixed costs In Bird v Acorn the question is which stage of fixed costs 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.
Update - 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.
Update - 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 liabile 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.
Update - Costs: assignment of CFA The claimant’s appeal and the defendant’s cross appeal in the case of Jones v Spire Healthcare Limited concerning the assignment of a conditional fee agreement went part heard in December and is due to resume on 19 April. In the meantime, DWF has also recently been involved in a case involving the attempted assignment of a CFA. Read more in our update on Webb v London Borough of Bromley.
Update - Claims Management Regulation Carol Brady published the final report following her independent review of claims management regulation. 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. Whilst acknowledging that there remains a legitimate need for CMCs, the review makes recommendations aimed at strengthening the existing regulatory regime. These include the re-authorisation of CMCs under a robust new process, and a ‘fit and proper persons test’ for those performing controlled functions within a CMC. The headline news though came from George Osborne in the Budget delivered on the same day, in which he confirmed that the government accepted the recommendations of the review and intended to transfer responsibility for regulating CMCs from the MoJ to the Financial Conduct Authority. Read more in our update.
Update - MedCo: call for evidence The MoJ’s Call for Evidence relating to the operation of the MedCo Portal closed in September. Stakeholders were asked for views on the registration of MROs, the formulation of the search offer and the statement on financial links. Breaking news: the outcomes of the review have been published today (24 March). Read more in our update.
Claims Management Regulation: fees cap Last month 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 closes on 11 April.
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. With the consultation still a work in progress as at 10 February and given the work to be done on the Autumn Statement proposals this date seems increasingly unlikely.
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:
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.
Update - Court fees increase: government response and further consultation As we reported in December, 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 awaited although the long outstanding increases in the fees for a consent application and for an application on notice came into force on 21 March.
Insurance contract law reform: insurable interest The Law Commission and the Scottish Law Commission are revisiting 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. In a consultation which ended on 28 June 2015 they sought views on updated proposals for indemnity and life insurance. Read more in our April update
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 new Bill which was introduced in the House of Lords last September includes provisions which will give policyholders a right to damages for late payment of claims. In the last month the Bill has gone through the House of Commons Committee stage and has had its third reading . The Bill now returns to the House of Lords for final consideration and it is anticipated that it will receive Royal Assent by the end of April. Read more in Jacquetta Castle and Robert Goodlad's article on recent developments. You can also follow the Bill’s progress here.
Third Parties (Rights against Insurers) Act 2010 The Insurance Act passed earlier this year made amendments to the TP(RAI)A 2010, to enable it to be finally brought into force. Last month the government published the draft Statutory Instrument needed to bring the 2010 Act into force, accompanied by a written statement from Lord Faulks indicating that he intends to make the regulations as soon as possible. Commencement of the 2010 Act will follow, but not earlier than three months after the regulations have been made.
Update - Riot Compensation Act 2016 In March 2015, the Home Office published a draft Bill to replace the Riot (Damages) Act 1886. In the aftermath of the 2011 riots, various aspects of the 1886 Act were found wanting, including the restrictions on type of property covered and the basis of compensation. The proposed Bill preserves the general principle of state compensation but introduces a compensation cap of £1 million per claim and expressly excludes the right of recovery in respect of consequential losses. The Bill also provides a new, modernised definition of “riot” and proposes reforms to the claims process. The Bill had its third reading in the House of Lords on 22 March and received Royal Assent on 23 March. Details of the Bill can be found here or for further information please contact Fiona James.
Motor insurance: implications of ECJ Vnuk ruling for UK legislation In late 2014Transport 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 about invalid vehicles suggested that an impact assessment was being prepared ready for a consultation on any changes. In the meantime it would appear that attention is being turned to the EU Motor Insurance Directive with BIBA seeking amendments to the MID as part of its recently launched 2016 manifesto.
Negligence and Damages Bill This Private Member's Bill was introduced last October by Middlesbrough MP Andy McDonald and is supported by APIL. Part 1 of the Bill seeks to place people who suffer psychiatric harm after witnessing the death or injury of others on a similar footing in terms of their entitlement to compensation, to those suffering direct physical harm. Parts 2 and 3 aim to repeal the Fatal Accident Act 1976 which currently allows payment of only a fixed sum for bereavement damages and to introduce a new approach similar to that already taken in Scotland, providing for different amounts to be awarded and with increased categories of people and relationships eligible for compensation. Whilst these types of Bill rarely become law, we will be monitoring progress. The second reading has already been postponed on a couple of occasions due to lack of parliamentary time. It is now due to take place on 22 April. You can find more information on the Bill's web page.
Mesothelioma (Amendment) Bills Since the introduction of the draft legislation to govern the Diffuse Mesothelioma Payment Scheme Lord Alton has campaigned for an additional sum to be levied on insurers to invest in research into the disease. A proposed amendment to the (then) Mesothelioma Bill was narrowly defeated and since then, numerous attempts have been made to introduce the provision through Private Members' Bills. The current attempt comes in the form of two Bills, one from each House. Lord Alton's Bill has had its second reading and MP Mike Kane's Bill is due its second reading on 22 April, again following postponement for lack of time. Update: in the meantime, in last week's Budget George Osborne announced £5 million of funding from LIBOR fines for a new mesothelioma research centre.
Also the horizon...
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 May with any subsequent reforms expected either in April or October 2017. Read more about the proposals in Simon Denyer’s update.
Update - MedCo Following its failed judicial review of the MoJ’s decision to randomise selection of Tier 1 MROs in the MedCo search function, Speed Medical is seeking permission to appeal. Read more about the judicial review judgment in Nigel Teasdale's update. We understand that the appeal proceedings should not affect the timing of the release of the response to the call for evidence. On accreditation, MedCo has this month announced its decision to bring the training in-house and today has announced that the date by which experts must be accredited is extended to 1 June 2016.
Update - Insurance Fraud Taskforce As we have reported previously, the Taskforce’s final report was published in January (read more in our update). Since its publication there have been a number of developments which appear to complement the work of the Taskforce. Last month 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 the SRA has this week issued a warning notice to solicitors of the ‘risk factors when dealing with personal injury matters’.
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 has written 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 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 the initial recommendations. In the meantime, at a recent conference DWF examined the issues involved in dealing with fraudulent NIHL claims. Read more in our update
New - Fixed costs extension: Civil Justice Council Earlier this 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 comes 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.
Civil Justice Council (CJC) to look at Damages Based Agreements The government's response to the CJC review of DBAs is 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 - Costs Budgeting and Management The amendments to the costs budgeting and management process, which the Civil Procedure Rules Committee has been reviewing since last summer, will come into force at the beginning of April. The amendments provide that only the first page of Precedent H is required for claims under £50,000 or where the costs are less than £25,000. Claims made on behalf of a child are excluded from the regime, and where the claimant has a limited life expectation the court will ordinarily disapply cost management. Amendments are made to the timing for filing budgets: for lower value claims the budget must be filed with the Directions Questionnaire, for other claims it must be filed 21 days before the case management conference. Agreed budget discussion reports must be filed seven days before the first hearing. Amendments are also made to provide that costs claimed in each phase of the proceedings, are made available to the court when assessing costs at the end of a case. Consequential amendments are made to the PD.
Civil Courts Structure Review: LJ Briggs' Interim Report Last month 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 would also fit 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 of July 2016. Read more in Simon Denyer's update.
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