Abuse claims against sporting and voluntary organisations to increase

The aftermath of the Jimmy Savile scandal has raised awareness of the extent of sexual abuse in a wide range of organisations. In particular, there have been high profile allegations made that football coaches sexually abused young players in their care. As more professional and amateur sportsmen and women reveal that they were abused as youngsters, it is anticipated more victims will come forward. Large claims should be expected, not only against football clubs but also against other sporting and voluntary organisations. The passage of time makes the investigation of historic claims challenging, but organisations must ensure that they have the right policies and procedures in place to respond to such allegations efficiently and sensitively. Looking ahead, organisations should seek to ensure that they implement robust safeguarding procedures to minimise the risk of harm to those in their care.

Is the small claims track the appropriate venue for injury claims?

Alongside the proposed introduction of tariffs for whiplash injuries, the ceiling of the small claims track for personal injury claims is to be increased from £1,000 to £5,000 for road traffic accident claims and £2,000 for all other claims. The costs recoverable in the small claims track are strictly limited, a fraction of the fixed costs which would otherwise apply even under the Low Value Protocols. One consequence of this costs restriction may be an increase in the number of personal injury claims presented by litigants in person, although there are very few casualty claims that will fall below the £2,000 limit. Given the limited numbers, it is unlikely that an extended portal will be required for casualty in the same way that it will be required for road traffic accident claims. However, if the small claims limit for casualty claims is increased in the future, bearing in mind the horizontal extension of the Low Value Protocols from motor to casualty in 2013, an online system for handling casualty small claims will clearly be required.

Sickness on holiday may be the ‘new whiplash’

As fees paid to claimants' solicitors are squeezed further, it comes as no surprise to see firms that have specialised in injury claims seeking to move into new areas of work. One area that has attracted their attention is sickness on holiday. This includes claims for food poisoning and upset stomachs, particularly on all-inclusive package holidays where claimants may assert breach of the Package Travel, Package Holiday and Package Tour Regulations 1992. A recent report by ABTA, The Travel Association, has recorded a 434% increase in gastric illness claims by Britons since 2013, despite reports of sickness in resorts remaining stable, suggesting that many are fraudulent. The Solicitors Regulation Authority is investigating whether illicit referral fees are being paid to generate claims and the Ministry of Justice has warned the public that fraud in this area may be punished by imprisonment. The Lord Chancellor has asked the Civil Procedure Rule Committee to look urgently at the rules governing the costs of holiday claims, which could lead to the extension of fixed recoverable costs to cover claims arising abroad and stricter controls on the pay-outs made by tour operators, a view which is supported by Jackson LJ's Review of Civil Litigation Costs. We have noted a significant increase in the volume of claims, in both our British and Madrid offices, and tour operators, hoteliers and their insurers should expect this trend to continue.

Is ‘very risk averse’ a true reflection of claimant investment strategies?

The discount rate, the assessment of the net return on investment from which multipliers for future loss are set, was the subject of dramatic change from 20 March 2017. The reduction of the rate from 2.5% to -0.75% saw multipliers increase dramatically, beyond the expectation of many actuaries, with a significant impact on the forecasting and reported profits of many insurers. While the then Lord Chancellor felt that she had no choice but to reduce the discount rate, her announcement was followed by a consultation paper reviewing the legal framework for setting the discount rate, raising such questions as the level of investment return realised by claimants in practice, how the rate should be set in the future, who should set it and the use of Periodical Payment Orders rather than lump sum settlements. Consultation closed on 11 May 2017 and we predict that the Government will bring forward legislation later this year to vary the basis on which the discount rate is set.

Key developments