Industrial deafness claims - the seven test cases in this litigation against Pretty Polly, Cortaulds and Coats Viyella have been dismissed although the claimants won on the generic issue concerning the existence of a duty concerning exposure below 90 dB(A)lepd (Parks v Meridian Ltd). One case will be appealed (Baker v Coats Viyella). The successful insurers, Zurich and Norwich Union, see the decisions as seriously undermining future claims and claimant lawyers’ ability to fund high-profile actions.
Asbestos claims – the rejection of two mesothelioma claims in recent cases (Pinder v Cape plc and Brett v Reading University) coincides with an announcement by the government that it intends to introduce new legislation to provide compensation to all mesothelioma sufferers. Lump sum payments for mesothelioma will be brought within the recovery of benefits scheme run by the Compensation Recovery Unit, which claws back benefit money from insurers defending civil compensation claims. The Association of British Insurers (ABI) has said that EL (employers’ liability) premiums will have to be increased to reflect these changes.
Compensation Act – the relevant provisions of the Compensation Act 2006 governing the regulation of claims management services came into effect on 6 April 2007. Those providing such services are required to be authorised to do so under the Act. The details are available from the DCA website and the Law Society’s guidance note. Sections of the Compensation Act which are already in force reversed the effect of the decision in Barker v Corus which left some claimants to shoulder the consequence of the insolvency of their employers and/or their insurers, and introduced consideration of whether a “desirable activity” was involved when determining whether an allegedly negligent defendant should have taken particular steps to meet a standard of care.
Cost of care – insurers can deduct care costs incurred by local authorities from awards of damages where the court is satisfied that a claimant will seek and obtain payments which will enable him to pay for some or all of the services for which he needs care (Crofton v National Health Service Litigation Authority). The same will not apply where the claimant does not want to rely on state funding (Freeman v Lockett). Auditors’ liability – the EC’s consultation on reform of the auditors’ liability market proposes various different methods of limiting liability. There is concern that, given increased litigation against auditors who may be unable to obtain sufficient insurance, there is a real risk that one of the Big Four networks could be brought down by a claim. Capping the financial liability of accountants is one option but is not universally favoured and will not solve the problem for firms which have a global element since the cap will not operate in the US.
Rome I and Insurance contracts – the UK government is in the process of consulting over proposed changes to include insurance contracts in Rome I (the proposed regulation governing the applicable law of contracts in EC law). The UK has opted out of Rome I because of concerns principally about mandatory rules but it could opt in later – once adopted Rome I will affect cross-border contracts in other member states and so will affect companies in the UK. The proposed Art 5a brings both insurance and reinsurance contracts within the scope of the regulation.