An update on forthcoming cases, consultations, legislation and key developments, including:
- New appeals and judgments to watch out for.
- A new MoJ Consultation on capping CMC fees
- A new Scottish Law Commission Consultation on prescription in civil claims
- APIL's response to the Autumn Statement proposals
- The Justice Committee inquiry into court fees
Update - Employers’ liability: vicarious liability The Supreme Court heard Mohamud v WM Morrison Supermarkets Plc and Cox v Ministry of Justice in October. In Mohamud the claimant was assaulted by a Morrison’s employee and was unsuccessful in his claim both at first instance and in the Court of Appeal. See DWF update on CA decision. In Cox the MoJ was held liable for the actions of a prisoner employed as kitchen worker who injured the claimant catering manager. Judgment will be handed down on 2 March.
Employers' liability: breach of duty / evidence Judgment was handed down earlier this month in the Scottish case of Kennedy v Cordia arising from an accident in which a home carer slipped on a snow covered path. The issues concerned the PPE at Work Regs 1992, breach of duty and the admissibility of evidence in the field of Health and Safety. Read more in DWF's update.
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.
Update - Fatal accident claim: quantification of loss The issue in Knauer v Ministry of Justice was whether the appropriate date for the assessment of multipliers in claims for future loss under the Fatal Accidents Act 1976 is the date of death or date of trial. Although only heard at the beginning of the month, judgment was handed down on 24 February. The panel of seven Justices unanimously held that the date of trial is the correct assessment date. Read more in DWF's update.
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 is now listed for 16 March.
New - Permission to appeal The Supreme Court has in the last month granted permission to appeal in the accountants' negligence case, Swynson Ltd v Lowick Rose and also in the case of Brownlie v Four Seasons Holidays Inc involving jurisdiction issues arising out of a fatal accident claim.
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
- FirstGroup Plc v Paulley about the Equality Act 2010 and the reasonable adjustments a bus company is required to make in order to accommodate disabled wheelchair users.
- Hayward v Zurich Insurance Company Plc where 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.
- 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.
Court of Appeal
New - Costs: fixed costs and Part 36 Appeals were heard on 8 February in Smith v Taylor and Broadhurst v Tan on the relationship between the fixed costs regimes and the costs consequences of Part 36; in particular, whether indemnity costs apply. Judgment was handed down on 23 February and it was held that Part 36 trumps fixed costs. Read the judgment.
Update - Procedure: second actions and abuse of process Padley v CDI Anderselite Ltd concerns the issue of permitting a second action to proceed after an identical action has been struck out for failing to comply with an unless order, where no application for relief from sanctions in respect of that first action is made or pursued. A hearing was due to take place on 16 February 2016 but the Court of Appeal Case Tracker indicates that the hearing was vacated and that the appeal was dismissed on 12 February, although we have seen no further details.
New - Motor liability: pedestrians An appeal on the issue of liability will be heard on 3 March inWormald v Ahmed concerning a road traffic accident between a taxi and a pedestrian.
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. The appeal is due to be heard on 7/8 March 2016.
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 is due to take place on 15/16 March 2016.
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 will be heard in the Court of Appeal on 21/22 March 2016. Read more in the DWF update on the HC decision
New - Employers liability: training An appeal is due to take place on 12/13 April in the case ofQuantrell v TWA Logistics in which an employee was injured whilst driving a fork lift truck. The case includes issues concerning the claimant's training.
New - 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 2016. 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 2016.
New - Permission to appeal The Court of Appeal has recently granted permission to appeal in AB v Main, a catastrophic injury case in which a car collided with children who had been playing at the side of the road and then moved into the road. It has also granted permission in Qader v Esure on the question of whether fixed costs apply to a claim which starts under the low value personal injury claims protocol but subsequently proceeds on the multi-track. Both have hear-by dates of 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. Although due to resume on 22 March it was adjourned due to lack of court time and has been relisted for 19 April.
Update - Court fees increase: Justice Committee Inquiry In July the House of Commons Justice Committee announced an 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. A final oral evidence session was held in relation to civil fees on 9 February when witnesses included Justice Minister Shailesh Vara. 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
Fixed costs in clinical negligence claims With a consultation promised in early 2016 the Department of Health recently confirmed 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 The Competition and Markets Authority has launched market study to “examine long-standing concerns about the affordability of legal services and standards of service.” With that in mind 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.
New - Claims Management Regulation: fees cap The MoJ has this month 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 there is a need to consider fee controls in the personal injury sector as well. The consultation closes on 11 April.
New - Scotland: law of prescription The Scottish Law Commission has published a consultation which aims to review time bars on civil actions in Scottish Courts. The issue of prescription in relation to claims for latent damage is of particular interest following the decision of the Supreme Court in the case of David T Morrison & Co Ltd v ICL Plastics Ltd in 2014, but the consultation is looking at other aspects of the law of prescription as well. The consultation runs until 23 May. Read more in our update.
The following consultations are awaiting official responses:
Claims Management Regulation In the Summer Budget George Osborne, announced a major review of the regulation of CMCs, as well as an intention to impose a cap on the fees that they can charge (see new consultation above). The review which is being taken forward jointly by the Treasury and the MoJ is headed by Carol Brady of the Claims Management Regulation Board. DWF responded to the call for evidence which closed on 13 November. A response is awaited.
Scotland: limitation in abuse claims In May the Scottish government announced its intention to legislate to lift the three year time bar on civil claims for damages arising from historic sexual abuse. Removing the three year time limit could see previously rejected child abuse claims being revived. DWF responded to the consultation which closed on 18 September and you can read more in our update. In a recent article in Scottish Legal News a government spokeswoman was quoted as saying that the responses were still being considered and that the government remained committed to publishing a draft Bill by the end of the Parliamentary Session.
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 along with the outstanding increases in the fees for a consent application and for an application on notice.
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. DWF submitted a response to the consultation and we await the government’s response which is expected soon.
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. A recent update from the MoJ has confirmed that the expert panel’s report has been received and is 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. The Bill has completed its journey through the House of Lords and earlier this month had its second reading in the House of Commons. It is now going through the Committee stage during which views from interested parties will be taken into consideration. Read more in Jacquetta Castle and Robert Goodlad's article on recent developments. You can also follow the Bill’s progress here.
Update - 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. It was expected to be in force by autumn 2015 but the Law Commission has now told Practical Law that it hopes it will come into force by summer 2016. Breaking news 25 February: the government has laid 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.
Riot compensation Bill 2015-16: the final hurdle 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 for riot 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. Further details on the Bill can be found here. 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 A new Private Member's Bill has been introduced 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 is now due to take place on 11 March as time ran out for it to be considered on 22 January. You can find more information on the Bill's web page.
Update - 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 now due its second reading on 26 February.
Also on 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 expected around March time (although given the scope of the reforms this seems optimistic) with any subsequent reforms expected either in April or October 2017. In the meantime, APIL has set out its position in a blog post and briefing note published this month. Read more about the proposals in Simon Denyer’s 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 has confirmed that it is seeking permission to appeal. Read more about the judicial review judgment in Nigel Teasdale's recent 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, the date by which experts must be accredited has been extended until 6 April 2016.
Update - Insurance Fraud Taskforce: final report published The Taskforce published its final report on 18 January. Whilst highly anticipated, the findings will not come as a great surprise: many had already been aired as potential recommendations during the consultation process. In addition, Justice Minister Caroline Dinenage had hinted at the findings during the Personal Injury Fraud debate in November, and of course the Treasury swooped in with its own proposals to address personal injury fraud in the Autumn Statement. The report aims to reflect and support those proposals and also the government’s activity around NIHL claims (through the Civil Justice Council) and CMC regulation (through the Carol Brady review) and you can read more about it in our recent update. One of the themes of the Taskforce’s report is the need for greater collaboration within the financial sector and earlier this month, the Home Secretary announced the launch of a Joint Fraud Taskforce. It is intended that the Taskforce will create a new era of collaboration, resulting in shared intelligence, a unified response and greater awareness of the risk of fraud among consumers.
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
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.
Diffuse Mesothelioma Payment Scheme: 2015/16 levy The government announced last monththat the 2015/16 levy for the DMPS would be £23.2m. It is estimated that the full cost of the scheme in 2015/16 will be £31m but as the amount levied in 2014/15 was greater than the final cost of the scheme for that year, £7.8m has been carried forward. The first Annual Report of the scheme is also available on the gov.uk website.
Mesothelioma claims: LASPO funding provisions Late last year the Justice Select Committee published the government’s response to its July report. 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. The government has announced that there will be a Post Implementation Review of LASPO between April 2016 and April 2018 and the review under s.48 of the Act will take place as part of this review. 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.
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
Costs Budgeting and Management Following Jackson LJ’s speech in May suggesting improvements to the costs budgeting and management process, a sub-committee of the Civil Procedure Rules Committee was tasked with considering the suggestions and making proposals for the amendment of the rules. In the summer the Committee approved a number of those proposals and the sub-committee was going to prepare amendments to the rules for further consideration. The redraft was due before the Committee for the November meeting. The agreed proposals include a general exclusion of cases relating to children from the scope of costs management; an indication in the PD that it may be appropriate to disapply costs management in cases involving a short life expectancy; and improvements to Precedent H and the use of a simplified version for cases valued up to £50,000. Interestingly the Committee also agreed that the aim should be to introduce fixed costs as soon as possible for all cases valued up to £50,000. Minutes of the November CPRC meeting show that there are now proposals to change the deadlines for the filing of budgets depending on the value of the claim. You can read more in this Litigation Futures article
Civil Courts Structure Review: LJ Briggs' Interim Report In July, the Lord Chief Justice and the Master of the Rolls asked Lord Justice Briggs to carry out an urgent review of the structure of the courts which deliver civil justice. The reason for the urgency is the planned reformed programme by HMCTS which will focus on the digitisation of court processes, on a greater use of Delegated Judicial Officers to carry out tasks currently carried out by judges, and on the creation of an online court for the resolution of lower-value disputes. Earlier this month Briggs LJ published his interim report with the headline recommendation of 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 (see below). Comments on the interim report are invited by29 February 2016 with a final report due by the end of July 2016. Read more in Simon Denyer's update.
Online Dispute Resolution In April 2014 the Civil Justice Council set up an advisory group to explore the role that Online Dispute Resolution (ODR) can play in resolving civil disputes valued at less than £25,000. In February this year the group published its report in which the principal recommendation is for a new three tier internet-based court service. Tier One should provide Online Evaluation to help users evaluate their problems and understand the options available to them. Tier Two should provide Online Facilitation in which trained facilitators working online can review papers and help users through a mix of ADR and advisory techniques. Tier Three should provide Online Judges who will decide suitable cases on an online basis. The report recommended a formal pilot of ODR as soon as practicable involving an agreed selection of types of dispute, with a view to full rollout in 2017. In his first speech as Lord Chancellor, Michael Gove indicated his support for the work of Richard Susskind in this area. Read more on the CJC’s dedicated online hub