on track informing fleet professionals
Put down the phone keep your hands on the wheel!
Over the past few decades since the introduction of mobile phones in Britain, we have seen a large amount of road traffic accidents being caused by the use of them at the wheel. According to the World Health Organisation (WHO), the statistics show that a driver is four times more likely to have an accident if they are using their mobile phone whilst driving.
It has recently been reported by the RAC that 95% of motorists regularly see other drivers looking at their phones in stationary traffic. RAC also reported that three in ten motorists say they have used a handheld phone at the wheel, with 29% claiming they do it occasionally and the other 1% admitting they use it on most journeys. The RAC spokesman Simon Williams has stated, `Thirteen years after the introduction of the current law forbidding use of a handheld phone at the wheel of a vehicle, this behaviour is far from being stamped out. In fact, the results of our research suggest the problem has got worse rather than better.' He goes onto say that we need to change our attitude as a society and that `Using a handheld phone should be regarded as being as socially unacceptable as drinking and driving.'
The Insurance Fraud Taskforce tackling fraud Page 4
Violence in the workplace: who takes the blame?
>>> continues on page 2
Q&A Julie Smith, Bidvest Logistics Page 10
Welcome to the summer edition of Hill Dickinson's on track newsletter, which we hope you will find of interest. In each edition we update you on current issues affecting both your bottom line and the way the claims are handled by fleet operators. We aim to provide you with news on some of the most significant legal and operational developments, and discuss the ways that we can help you to maintain efficiency. In this edition, we take a look at the new mobile phone app that could help to prevent accidents on our roads. We discuss the way the Government intends to clamp down on claims management companies (CMCs) in order to reduce cold calling and fraudulent claims. We then look at the latest cash-forcrash scandal and outline the way the Insurance Fraud Taskforce plans to target fraudulent activity. We also consider how the autumn statement proposals could impact the whiplash world. Alastair Gillespie considers vicarious liability and violence in the workplace in light of the Supreme Court decision in Mohamud -v- WM Morrisons Supermarkets plc. Andrew Schtte then provides us with a summary of the Enterprise Act 2016, which will force insurance companies to pay out in reasonable time from 4 May 2017. We look at the chain of causation and the recent High Court decision in Craig Sparrow -v- Arnaud Andre. Phil Oultram then discusses his view on the risk of car hacking in autonomous vehicles and whether this problem can be avoided. We hear from Julie Smith, commercial controller for Bidvest Logistics about claims, her career and handbrakes! Stratos Gatzouris provides his take on the recent Court of Appeal decision in Sean Phillips -v- Carol Willis and how this will affect claims on the portal that include hire charges. We end with Paul Edwards discussing the recent Court of Appeal cases of Broadhurst -v- Tan and Taylor -v- Smith and how part 36 triumphs over fixed costs. We are keen for on track to be as interactive as possible, so please tell us your views both about the issues we cover and on any points that you would like to see in future editions. Best wishes,
Nerys Parry Partner and head of motor claims firstname.lastname@example.org
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The current law
The current law states that you will receive three penalty points on your licence and a fine of 100 if you are caught using your mobile phone at the wheel. The case could go to court and result in you losing your licence or receiving a fine of up to 1,000 or 2,500 if you are a driver of a bus or goods vehicle.
The new mobile phone app
One of the most recent solutions to this problem that has been reported in the press is the new mobile phone app that prevents drivers from using their phone whilst driving. This has been developed by an employer-tracking firm called Romex and the app is called Romex MyFix. This will be available to the consumer market in the near future and a similar app is already available to the car fleet sector by the name of Distraction Prevention.
The Romex MyFix uses the GPS system to detect when the vehicle is travelling at more than 4mph and then disables the screen. This will disable calls, texts, emails and social media messaging - allowing people to accept calls only by using a Bluetooth headset. The user can set it to provide notification of important messages, but they cannot be read until the driver has pulled over. There is the option of declaring yourself as a passenger in a vehicle to disable the app.
The app also monitors a driver's speed and time spent behind the wheel. The product will be aimed specifically at young people as they are (statistically) more likely to use their phones at the wheel. The company is considering setting up a reward system where users earn points and exchange them for free coffees or cinema tickets. The company is also looking into the idea of insurance rebates and is looking for insurance partners.
The mobile phone app is an important step towards tackling the mobile phone at the wheel epidemic. This app could be a useful tool for those who will take the time to download and use it. This could be the perfect new age solution for a new age problem; a way to use the technology to our advantage. Of course, it is unlikely to solve the problem as a whole and it is yet to be seen how many people will actually use the app and how effective it will be. However, it is a step in the right direction and will help to raise awareness of the issue that exists.
It is important that further measures are taken in relation to the use of mobile phones at the wheel. The Government is already looking to increase the penalties for using a handheld phone whilst driving. There has been a government consultation on raising the fine to 150 and increasing the penalty points to four points (six points for HGV drivers). This consultation closed on 15 March 2016 and it is expected that there will be further information provided by the Government shortly.
WHO has suggested the following action should also be taken: legislative measures to target the problem, public awareness campaigns and the regular collection of data on distracted driving. This problem needs to be tackled headon to prevent further lives being lost for the sake of a phone call that could have waited.
Nerys Parry email@example.com
on track summer 2016
Clamping down on claims management companies
There has been a lot of noise about claims management companies (CMCs) over the last few months. What has been happening and where will this lead?
Over the years cold calling and texting by CMCs has become a widespread issue. Road traffic accidents have been a particular focus for CMCs with a reported turnover of 300 million in the year 2014/15. Key issues include CMCs taking lots of money from claimants to cover their own fees, fraudulent claims being initiated by CMCs and pursuing claims with little merit.
What has been done?
In recent years new rules and regulations have been introduced. Measures to improve regulation of CMCs have already been taken by the Claims Management Regulation Unit (CMRU) which is part of the Ministry of Justice (MoJ). Other positive changes include the referral fee ban in April 2013, new conduct rules in June 2013 and, since December 2014, the power to fine CMCs for rule breaches. The first fine of 220,000 was issued to the Hearing Clinic in August 2015 and the largest fine issued was 850,000 to the National Advice Clinic in December 2015.
What else needs to be done?
There is still a real need to clamp down further on CMCs and various consultations and reviews are taking place this year with the aim of doing so. The MoJ has released a consultation paper which proposes to cap CMC charges in the financial products and services claims sector by the end of 2016. The consultation paper confirms that there will be a `wider assessment of whether similar fee or other controls may be required in other regulated claims management sectors such as personal injury and employment, in due course'.
The Carol Brady report
In October 2015, HM Treasury and the MoJ commissioned a review of how CMCs are regulated and, in March 2016, Carol Brady published her findings. The report includes details of stakeholders' views on several matters and then recommendations for reform. The general opinion from stakeholders is that responsibility should be transferred to the Financial Conduct Authority (FCA) and that there is the need for better enforcement action and tighter regulation, although CMCs should not be regulated out of existence. The stakeholders also take the view that the CMRU has done a good job given its limited resources.
The report makes a number of recommendations regarding organisation of CMCs, authorisation, rules, procedures, records and enforcement. Main points include:
Moving regulation from the MoJ to the FCA.
Outcome-based conduct rules to sit alongside the enhanced rulebook.
Stricter enforcement measures should be imposed on CMCs, especially when it comes to criminal action for fraudulent claims or breaches of the Data Protection Act.
Client records must be kept for 12 months following contact with clients or settlement/conclusion of a claim.
CMCs should be re-authorised under a robust process with permission needed for each activity.
Former chancellor George Osborne has already announced that CMC regulation will move to the Financial Conduct Authority (FCA) and it is hoped that the recommendations in this report along with the ongoing consultation should bring about positive changes in the way that CMCs are regulated.
Nerys Parry firstname.lastname@example.org
The Insurance Fraud Taskforce tackling fraud
Background The Insurance Fraud Taskforce was set up by the Government in January 2015 to investigate the causes of fraudulent behaviour and recommend solutions to reduce the level of insurance fraud. The taskforce is made up of representatives from the Association of British Insurers (ABI), Citizens Advice, The British Insurance Brokers' Association (BIBA), the Financial Services Consumer Panel (FSCP), the Insurance Fraud Bureau (IFB) and the Financial Ombudsman Service (FOS). HM Treasury and Ministry of Justice officials also attend meetings and support the taskforce.
The Insurance Fraud Taskforce released its final report on 18 January 2016 following a yearlong review. The Government released a written statement on 26 May 2016 accepting all of the proposals within the report.
There are a number of issues identified in the report in relation to fraud and the main ones are listed below: Fraud is estimated to cost policyholders
up to 50 each per year; The cost to the country is over 1 billion
in detected fraud and it is estimated another 2 billion in undetected fraud; The cost of fraud is very high in low value personal injury (PI) cases; There has been a substantial rise in the number of PI claims, in particular for minor whiplash, despite the rates of road traffic accidents falling; Many noise-induced hearing loss claims are also fraudulent or exaggerated; and The insurance industry spends over 2 million per year tackling fraud.
What needs to be done to target fraud?
Recommendations in the report include: More should be done by regulatory
bodies including the Solicitors Regulation Authority and claims management regulator to detect and prevent fraud. More fines should be handed out. Insurers should be more willing to defend claims/reduce inappropriate use of pre-med offers.
If personal injury claims are brought more than six months after an accident, recoverable costs should be reduced.
There should be a mandatory requirement for referrers to be included on the claim notification form to ensure that defendants are immediately notified of the name of the referrer.
Increasing the small claims limit to 5,000 and scrapping compensation for whiplash - to reduce incentives for insurance fraud.
Improvement needed in the sharing of anti-fraud data.
The report also notes that previous reforms to `no win, no fee' agreements have reduced the costs of cases.
Wider consequences of fraud
The taskforce discusses the way fraud impacts society as a whole in the following ways: Funding crime: insurance fraud is often
used to fund wider activities of criminal gangs. Blocking courts: fraudulent claims in the courts delays justice for honest claimants. Jeopardising road safety: staged road collisions pose a danger to innocent motorists. Public services: GPs spend a lot of time seeing patients regarding fraudulent claims. Social nuisance: nuisance calls and aggressive sales pitches made by CMCs.
The Insurance Fraud Taskforce report has come at a time when there are many other important proposals being discussed. Claims management companies face scrutiny both in the financial sector where fee caps are being considered -
and generally with the recent Carol Brady report on CMC regulation. In the autumn budget statement the former chancellor indicated that there will no longer be any right to compensation for minor whiplash claims and confirmed that the small claims limit for personal injury claims will increase from 1,000 to 5,000. The consultation on this was expected to be released in July 2016, but is likely to be delayed in the outcome of the referendum vote. The subsequent reforms were expected to take place in April or October 2017, but could now be delayed. Nonetheless, the personal injury market appears to be changing in the hope that fraudulent activity will be greatly reduced in the coming years. There has of course been strong opposition to the Insurance Fraud Taskforce report and the autumn statement reforms from claimant organisations including the Association of Personal Injury Lawyers (APIL) and the Motor Accident Solicitors Society (MASS). These two organisations will be joined with the Law Society to develop effective opposition. The Solicitors Regulation Authority (SRA) has also confirmed that it will be carrying out a comprehensive review of the personal injury market this year. Despite the opposition, the Government responded with a written statement from Lord Faulks on 26 May 2016, which stated: `The Government accepts each of the recommendations addressed to it and we will set out in due course how we propose to implement them.' Lord Faulks also stated, `The Government will do what it can to assist and, in order to make sure that all of the recommendations are actively pursued, we will seek an update on progress later in the year. Overall it looks to be a busy year but only time will tell if the reforms will achieve their ambitious aim of tackling fraud.
Nerys Parry email@example.com
on track summer 2016
VIOLENCE in the workplace: who takes the blame?
The potential for violent altercations in the workplace is a problem that many employers will encounter at some time and is an issue that can have dire consequences from a legal perspective. The concept of vicarious liability means that employers can be liable for their employees' actions even in situations where the employer had no control. This includes where a third party - another employee or a member of the public - is injured as a result of an employee's violent conduct. A recent case decision by the Supreme Court underlines this point and demonstrates why it is good practice for employers to put precautionary measures in place to reduce the risk of a disagreement or dispute boiling over into violence.
For an employer to be liable for the violent act of an employee the concept of vicarious liability must be made out. This requires consideration of:
1) The relationship between the primary wrongdoer and the person alleged to be liable; and
2) Whether there is a sufficiently close connection between the wrongdoing and the employment, so that it will be fair and just to hold the employer vicariously liable.
This article deals with clear employee employer relationships in which case point 1 will be automatically made out. However, it is important to bear in mind that vicarious liability can apply in situations in which the relationship between the wrongdoer and the party alleged to be vicariously liable is not so clear cut; in which case point 1 will require more careful consideration.
The recent Supreme Court case was Mohamud -v- WM Morrisons Supermarkets plc. The claimant, a member of the public, entered the defendant's petrol station kiosk after checking his tyre pressure to ask if it was possible to print some documents from a USB stick. The defendant's employee (the petrol station attendant) refused, and when the claimant
protested, subjected him to racist abuse and threats. When the claimant returned to his car, the attendant followed him and brutally attacked him, telling him to leave and never to come back to the premises.
Although the defendant would never have condoned its employee acting in such a way the Supreme Court held the defendant vicariously liable for the injury to the claimant. In the judgment the court highlighted that the employee had interacted with the claimant within the field of activities assigned to him by the employer. When the employee stepped onto the forecourt he was following up what he had said to the claimant from behind the counter as part of an unbroken string of events and was purporting to act in the course of his employer's business. The way the employee did so was a gross abuse of position but it was in connection with the business in which he was employed to serve customers, hence the employer was vicariously liable for the consequences.
Implications for employers
Mohamud and other similar cases make clear that an employer can be held accountable for an act of violence even when its employee carries out an act which is a gross abuse of their position. This case clarifies the law and will make it more difficult for employers to distance themselves from the actions of their employees where there is a
connection to the job they are employed to do, even where that connection may seem very remote.
In the transport sector situations to look out for include road rage incidents or arguments with fellow employees at loading bays. While risk management steps taken by an employer will not in themselves prevent a finding of vicarious liability, they could prevent violent incidents occurring in the first place. Steps could include:
Training provided and recorded in relation to how employees should act in certain situations, what acceptable and unacceptable behaviour is and on diffusing high risk situations.
Monitoring the conduct of employees in potential conflict situations to ensure their behaviour is acceptable, and provide training where it is not.
Aiming to promote a peaceful working environment overall and to prevent situations from escalating where possible. It is important that disciplinary action is taken against any employee that displays signs of aggressive behaviour before it is too late.
Alastair Gillespie firstname.lastname@example.org
Insurance companies to pay out in `reasonable' time
The Enterprise Act
On 4 May 2016 royal assent was given to the Government's Enterprise Bill to become the Enterprise Act 2016. Amongst other changes, the Enterprise Act 2016 inserts new sections into the Insurance Act 2015. The new section 13A will apply from 4 May 2017 and will give policyholders the right to claim damages from insurers for late payment of claims for the first time under English law.
What contracts are affected?
The new rules will affect contracts agreed from 4 May 2017 and will apply to both consumer and commercial insurance agreements.
How will it work?
A term will be implied into every insurance contract that insurers must pay claims within a `reasonable time'. This is in addition to, and distinct from, an insured's existing rights to enforce the insurance contract and to claim interest.
What is a `reasonable time'?
There is no set timeframe. The new rules say a `reasonable time' includes a reasonable time to investigate and assess the claim. What is `reasonable' will depend on all the relevant circumstances such as the following:
The type of insurance;
The size and complexity of the claim;
Compliance with statutory or regulatory rules and guidance; and
Any factors outside the insurer's control.
Is lapse of time the only criteria for awarding damages?
No. If an insurer does not pay a claim, and can show there are reasonable grounds to dispute liability or quantum, this may not breach the implied term that claims be paid in a `reasonable time' but the conduct of the insurer in handling the claim may be a relevant factor in deciding whether that term was breached and, if so, when.
How soon must policyholders bring claims under the new rules?
The Enterprise Act contains a new provision to be inserted into the Limitation Act 1980 (section 5A). Action for late payment will be barred by the expiry of whichever of the following periods ends first:
1) One year following the date that payment of all sums due under the insurance claim has been paid (this could be the full payment or just a payment that `extinguishes' the insurer's liability); or
2) six years from the date of the breach of the implied term regarding payment, under the usual contract law.
Can insurers contract out?
For consumer insurance contracts, there can be no contracting out of the implied term regarding late payments.
For commercial insurance contracts, insurers can contract out and exclude or limit their liability if they satisfy transparency requirements and have not deliberately or recklessly failed to pay the claim within a `reasonable time'.
Although not currently in force, these changes are already affecting policy wordings in the market and raising a range of issues for insurers, brokers and insureds alike. Policyholders and their advisers should make sure to always follow up claims and to make reference to the late payment provisions once they are in force. The insurers will need to make sure they handle claims efficiently and do not delay payments from being processed. The claims process should be much smoother across the board and there will be no more waiting for years for an insurance company to take action on a claim.
Andrew Schtte email@example.com
on track summer 2016
The autumn statement the end of the whiplash compensation culture?
The former chancellor of the Exchequer made an important announcement for whiplash reform in his budget statement on 25 November 2015.
He confirmed that the Government intends to:
1) Introduce measures to end the right to cash compensation for minor whiplash injuries.
2) Transfer personal injury claims of up to 5,000 to the small claims court.
These proposals aim to prevent fraudulent claims and clamp down on the compensation culture around minor motor accidents. There will be legislation required to limit cash compensation and a change of the Civil Procedure Rules to increase the small claims limit. While the Government is set on making the changes, there will be consultations during 2016 to consider the detail. Clearly there has been substantial dismay expressed by claimant groups at these proposals for reform.
The Government has yet to make decisions on a number of finer details. The following questions highlight issues that need to be addressed:
What type of claims will the small claims track increase apply to? Whiplash only or all types of personal injury?
How will whiplash be defined? Neck injuries/ back injuries/ psychological damage?
What if fraud or fundamental dishonesty is suspected? Will claims still be transferred to the multi-track?
The key effects
From a defendant or insurer perspective the following effects could be seen as positive:
Significantly more personal injury claims falling into the small claims track;
Reduced claim costs; and
Savings passed onto policyholders predicted average saving of 40 - 50 per year for individual motorists.
However there are also possible negative effects:
The potential for damages to creep up claimant representatives finding ways to inflate claims;
More unrepresented litigants in person;
Delays in portal development whilst the changes are confirmed; and
Potential for claims management companies (CMCs) or McKenzie friends to move into the vacuum left by claimant solicitors.
Defendants should be alert to the following changing claimant behaviours being employed in response to the reforms:
Damage-based agreements may become more prevalent.
More claims for subjective conditions such as chronic pain and psychological injuries and for additional special damages claims.
Potential for solicitors to de-regulate and become CMCs, although the new CMC regulation proposals could prevent this.
Continuing potential for claims such as credit hire to be made fraudulently.
In the short term, a consultation was expected to be submitted in July 2016. However, following the outcome of the EU referendum there is uncertainty as to when the consultation will be released and there could be a delay. The subsequent reforms were expected to take place in April or October 2017 prior to the referendum, but again this is now uncertain.
Longer term there is the potential for a similar approach to be taken for other types of low value injury and not only whiplash.
Nerys Parry firstname.lastname@example.org
Testing the strength of the chain of causation
It is important to remember that many road traffic accident cases are not straightforward and there can be a complex chain of events involved. In this type of case it must be decided whether the chain of causation is broken and whose negligence led to the consequences. There are often intricate arguments over liability and at times the defendant may admit liability, but the claimant may also remain partly responsible for the accident. In this type of case there will be a deduction from the claimant's damages known as a contributory negligence deduction, which is generally a percentage.
High court decision
In the High Court case of Craig Sparrow -v- Arnaud Andre  EWHC 739 (QB) the defendant had reversed into the claimant's vehicle in the car park of The Park Club in Acton in February 2013. This case initially began as a straightforward road traffic accident until events took a turn for the worse...
Following the initial impact, the claimant got out of the car to check the damage to his Lexus vehicle. He left his two children in the car who were aged 9 and 11 at the time. The defendant moved his vehicle away, which then led the claimant's Lexus to start rolling down a slope towards the entrance to a potentially dangerous service area. The claimant could hear his children screaming in the vehicle and he was worried about their wellbeing. Without time to think clearly, his automatic reaction was to attempt to hold back the car with his bare hands, but he could not slow the vehicle down and he was picked up with it. The vehicle was eventually stopped by a metal post, but his leg was crushed between the vehicle and the post and later had to be amputated.
The defendant admitted liability in the case for the first part of the accident in the car park, confirming that he failed to keep a proper lookout. However, the defendant denied liability for the second part of the accident. He argued that he
could not have foreseen that the vehicle would roll down the slope and cause such severe injuries to the claimant. The defendant stated that the claimant had caused these injuries by failing to apply the handbrake or switch off the ignition and that he should not have attempted to hold back the car.
The `but for' test must be satisfied in order to hold a defendant accountable, e.g. `but for' the breach of duty the injury would not have occurred. It must also be shown that there is no 'novus actus interveniens', which is an act sufficient to break the chain of causation. It was held that the defendant had breached his duty of care to the claimant and this had caused the claimant's injuries as the chain of causation was not broken. The `but for' test was satisfied as it was decided that but for the defendant's actions, the claimant's vehicle would not have been left in that position and the claimant would not have got out of the car. The injury was caused through circumstances that flowed from the initial car accident.
However, contributory negligence was found due to the fact that the claimant had not applied the handbrake or switched off the ignition. The claim was reduced by 60% at the trial of the preliminary issues of breach of duty and causation. The reason for the reduction was contributory negligence on the part of the claimant.
This case is a clear example of how a situation can take a turn for the worse when automatic reactions are involved. In an extreme situation instinct takes over and this can result in catastrophic consequences. A lesson to be learnt from this case is to think about our actions before taking them, but in reality this may be easier said than done when it comes to such a difficult, spur-ofthe-moment decision. In this case the claimant was not held accountable for his decision to attempt to stop the car from rolling as it was felt that this was a reasonable reaction to such an extreme circumstance. However, the claimant was held to blame for not applying the handbrake and turning off the engine.
This case has unusual facts, but it does provide an interesting example of the court examining the issue of whether an intervening act will break the causative chain. It is clear that in a case where the negligent actions on the part of the claimant are secondary to the defendant's primary breach, the court will not find that the chain of causation has been broken. Providing the actions of the claimant follow on from the initial breach, the defendant will still be liable, despite the fact that the end result may have been unforeseeable. This will impact future cases in relation to the chain of causation and defendants will need to be aware that their actions could have dire indirect consequences.
Nerys Parry email@example.com
on track summer 2016
Recent media reports have suggested that car hacking is a very real threat. Phil Oultram takes a look at what this means for the development of autonomous vehicles.
Almost every story about automated vehicles is accompanied by a warning of how it could all go wrong. There is a plethora of examples of how terrorists and hackers could disrupt or take control of systems to wreak injury and disruption, and bring major cities to a standstill. However, we must not forget that there has been scope for this for some time, with computer controlled traffic lights and automated barriers, bridges and train signals, runway lights and automatic pilots.
There are already stories circulating which claim to highlight the failures of security or successful hacking of an autonomous vehicle. From taking over a vehicle's infotainment system to controlling their windscreen wipers, a hacker can demonstrate and exploit the vulnerability of a vehicle. These hacks are neither failures nor successes but rather evolution in real time. Every time a system is hacked or a system fails, a way is found to improve the system and software is patched and reinvented, recoded and protected. As autonomous vehicles are still in development, security research is in progress. Part of the testing will include safe ways to update software, either through dealerships or remotely.
When considering the susceptibility of vehicles to attack and vulnerability to hacking, we first have to accept that there are fundamental certainties; the main one being - you cannot make anything 100% hack-proof. Of course risk should always be considered and attempts made to eliminate it, but we also have to be realistic and acknowledge that evolution is fluid not static. We must accept that there may never be a completely infallible system. As sobering as the thought may be, a malicious individual with the right training, knowledge, hardware and software would have a much harder time breaking into a secure system and reprogramming it than someone with no qualifications and a pair of wire cutters who wanted to cut a brake cable.
Companies within the industry will understand the responsibility that falls on them, and existing vehicles already have computer programs incorporating millions of lines of code. Manufacturers and developers will have a legal and moral responsibility to ensure that their systems are as safe as they possibly can be. There will be a competitive consideration to ensure systems represent the height of security as public demand and longer term financial liability calls for the safest, and not the cheapest, system. The software companies will be responsible when the software fails, the hardware companies when the hardware fails, the manufacturers when the design fails and the insurer when the human component fails but we can never forget that whilst you can invent the best umbrella in the world, you can't stop it raining.
Phil Oultram firstname.lastname@example.org
Nerys Parry talks to Julie Smith, commercial controller for Bidvest Logistics about claims, her career and... handbrakes!
Q A Q A
Who are you and what
do you do?
I am one of the commercial controllers for Bidvest Logistics and PCL Transport 24/7. My main roles cover payroll and insurance for both businesses. I also head up the management accounts team responsible for the financial group reporting to our owners, Bidvest, in South Africa.
Tell us a bit about the business...
Bidvest Logistics are part of The
Bidvest Group Limited (Bidvest).
Bidvest is an international services,
trading and distribution company.
It is listed on the JSE Securities
Exchange South Africa (JSE) and operates on four continents. We are a service and solutions
company for clients with complex supply chains, namely businesses
Ain the food, drink and hospitality
industry. Our vision is to lead our
market with high performance
logistics solutions that wow
How did your career start and
what lessons have you learnt on
your way up to the top?
I joined the company `Booker Foodservice' in 1998, which became `3663' in 2000 with our new owners (Bidvest South Africa). There were two main divisions: wholesale and central distribution (CD). In 2010 the CD division separated and became Bidvest Logistics.
My career has changed more times than the company name: from management accountant to commercial accountant to senior commercial accountant to commercial controller. One of the key lessons I have learnt is that in the business world you need to have an open mind and be prepared for the unexpected. For example when I joined Booker as management accountant it was owned by Iceland, but within a year it had been put up for sale - after seven days in the job I had already started working on commercial tendering for the new business and ended up working on the due diligence for the sale.
What is the strangest claim you
have ever dealt with?
Probably the most 'infamous' claim that comes to mind was when a truck rolled down a hill and ploughed into parked cars. When I was taking the driver's statement, the driver advised that he could not be held responsible for the claim as the company had not told him to put the handbrake on when stationary!
What does the driving licence stand for these days?! My challenge back to the driver was that the company does not tell you to eat either but you naturally do this...
What do you see as the biggest
Q challenge in your sector?
Employers' liability claims -
A personal injury claims and managing expectations.
Q What are your greatest achievements personally and
A professionally? My greatest achievement has been mastering awkward claims like the flood we had in Hoddesdon in July 2014. The rain came down and burst the pipes in the town and damaged several businesses in the area. We had two sites and with the help of our insurers and loss adjusters achieved an outstanding result.
Q What qualities do you most admire and like to see in the
A people you work with? Flexibility and co-operation.
Q What does success look like from the point of view of your
A business? The business aims to always meet the wants, needs and aspirations of our employees, and use their skills to exceed customer expectation.
From Nerys: I would like to say a big thank you to Julie for taking the time to share her experiences with us.
on track summer 2016
Hire charges and the portal:
Sean Phillips -v- Carol Willis  EWCA Civ 401
The Court of Appeal has ruled that a low value hire claim should have remained in the claims portal rather than be transferred to the small claims track. At present 800,000 cases per year are being transferred from the claims portal (the portal) into the small claims track and this case has the potential to reduce that number.
A road traffic accident claim was made for losses including low value hire charges. Claims for general damages and physiotherapy were settled and the claim reached stage 3 of the portal as a result of a dispute over the hire charges claimed at 3,486, only 462 of which remained in dispute. Only the rate of hire was disputed. There were no arguments of impecuniosity or relating to the period of hire or need for the hire vehicle.
Despite the small amount and limited issues in dispute, in April 2014 the court ordered the claim to proceed as a part 7 claim in the small claims track. Complex directions for further evidence in relation to the hire claim were also given.
The claimant appealed that decision to a circuit judge arguing that the case ought not to have been transferred out of the stage 3 procedure. That appeal was dismissed on the basis that the district judge had justifiably exercised his discretion, leaving the claimant to appeal again to the Court of Appeal.
Court of Appeal
The Court of Appeal decided that the case should not have been transferred into the small claims track. The amount in dispute in relation to hire charges was identified as 462 which is a nominal amount for a hire claim, the judgment noting that `The costs which the district judge caused the parties to
incur were totally disproportionate to the sum at stake'. Those costs included a further court fee of 335, the costs of complying with the elaborate directions and the costs of being represented at the hearing. The costs incurred for the initial hearing would also be written off and the winning party would recover virtually no costs by virtue of the claim proceeding in the small claims track. Giving the leading judgment, Lord Justice Jackson held that that the district judge had been irrational in his requests for further evidence in relation to the hire charges. He stated that when a personal injury claim was settled it did not automatically exit the portal and that this case should never have done so. The district judge had no power under CPR Practice Direction 8B para 7.2 to direct that the case should proceed under Part 7. He stated that `CPR 8.1(3) cannot be used to subvert the protocol process.' He accepted that there may be `complex issues of law or fact which are not suitable for resolution at a Stage 3 hearing' however this was not such a case. He chose not to speculate about what the appropriate orders may be in such cases. The appeal was allowed and the district judge's order set aside.
Important factors to consider
Whilst any case that adopts a common-sense and practical approach to issues of proportionality must be welcomed, it is unfortunate that this decision may send the wrong message and leave judges unsure how to apply their discretion on the issue of whether or not to transfer the case out of the portal. It should be noted that: This case governs only what will
happen when the personal injury element of a claim has previously been resolved in the portal and a modest dispute about hire charges remains. In this scenario it is likely to remain in the portal.
There is reference to the fact that more complicated hire cases will exit the portal, but there is no definition of which matters will do so. That decision will be at the discretion of the individual judge.
In this case the hire claim was of low value. High value hire claims are likely to continue to exit the portal.
In this case impecuniosity, period and the need for the hire car were not disputed, just the rate of hire. Where there is a substantial dispute of fact the case would be likely to exit the portal.
The court made it clear that stage 2 portal submissions will be treated as pleadings and defendants should therefore make sure adequate training is given to portal case workers.
This case was fact-specific and leaves matters wide open. Before this decision the county courts often transferred cases like this from the portal to the small claims track at a rate of around 800,000 cases per year. Now, it would appear that minor disputes will remain in the portal, making it difficult for defendants to provide evidence to counter the hire claim.
It remains unclear which claims will be deemed to have significant enough evidence to exit from the portal and/or which it would be disproportionate to transfer out. The concern is that judges will not be sure as to when to exercise their discretion to transfer the case out of the portal. Defendants will need to raise issues of dispute at an early stage (stage 2) so that a judge is made fully aware of the facts including arguments for transferring the case to the small claims track. This is clearly still an uncertain area and we expect that the courts will be tested further on the issue.
Stratos Gatzouris email@example.com
on track summer 2016
`Cash-for-crash' - the fight against fraud
`Cash-for-crash' scandals have been a huge issue in recent years, with fraudsters arranging road traffic accidents or making claims for bogus accidents that never happened. Recently the activities of one major fraud ring have been in the public eye. More than 80 motorists have been sentenced after a garage in Wales was involved with faking accidents in its yards, involving compensation claims totalling 750,000. This has been classed as one of the most extensive insurance frauds in British legal history. When Cwmbran Magistrates Court first processed the 80-plus people accused of involvement in October 2013, the court was closed to all other business. The accused have been brought in groups to the Crown Court as there were too many to be dealt with at once. The final five motorists were sentenced to prison or given suspended sentences at the end of January 2016. The investigations started in 2011 and it has taken five years for the final sentences to be given due to the complexity of the operation. There were a total of 57 vehicles involved in the fraud ring. DCI Richard Williams of Gwent Police has been reported in the press as stating that:
`It not only cost the insurance industry hundreds of thousands but also has probably had a knock-on effect to motorists in pushing up their premiums too.' Catrin Evans, head of the Crown Prosecution Service Wales complex casework unit, explained that: `This `cash-for-crash' operation was a highly organised, calculated and extensive conspiracy to defraud. It involved defendants participating in the arrangement of fake road traffic accidents and insurance fraud.' It is hoped that the outcome for the criminals will send a strong message to other fraudsters that they will be caught out in the end.
Nerys Parry firstname.lastname@example.org
Part 36 trumps fixed costs
Paul Edwards reviews a recent case in which the Court of Appeal confirmed the correct approach to be taken to costs where a RTA portal claim brought after 31 July 2013 exits the portal, falling into the fixed costs regime and a claimant beats their own part 36 offer. There had been conflicting cases in the county courts. This case resolves that conflict. In Broadhurst -v- Tan and Taylor -v- Smith the claimants beat their own part 36 offers. Both claims were started under the RTA protocol for personal injuries and both claimants made part 36 offers which were rejected by the defendants. When the claimants then obtained judgments that were higher than those offers, it was confirmed that indemnity costs would apply for both cases. However, in the case of Broadhurst -v- Tan, the judge ruled that there was no difference between fixed costs and indemnity costs and therefore fixed costs would apply. The Court of Appeal rejected this argument, allowing the appeal in the claimant's favour. The case sets out how the rules will apply going forwards. Where a claimant makes a successful part 36 offer the basic principles are: Fixed costs awarded until the date the offer became effective. Indemnity costs awarded from the date that the offer became effective.
This decision provides clarification regarding what was a grey area. Claimants will have more incentive to make more realistic part 36 offers and defendants will be under more pressure to accept competitive offers because of the risks of the matter falling out of the fixed costs regime.
Paul Edwards email@example.com
For further information about our services or to pass on your comments regarding this newsletter please contact any member of our transport team: Nerys Parry firstname.lastname@example.org +44 (0)151 237 3031 Graham Lynch email@example.com +44 (0)151 237 3157 Stratos Gatzouris firstname.lastname@example.org +44 (0)161 235 7412 Paul Edwards email@example.com +44 (0)151 600 8839
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