piBlawg

the personal injury and clinical negligence blog

A collaboration between Rebmark Legal Solutions and 1 Chancery Lane

New law - fundamental dishonesty in PI claims

The government brought into force last week a new law preventing claimants from recovering damages for personal injury when they have been fundamentally dishonest, unless it would cause substantial injustice. In the case of Summers v Fairclough Homes Ltd  [2012] UKSC 26 the claimant was injured in an accident at work and claimed more than £800,000 from his employer. Surveillance revealed him to have grossly exaggerated the effect of his injuries. At trial he was found to have fraudulently misstated the extent of his claim but the judge declined to strike out his claim and awarded £88,716. The defendant appealed and the Supreme Court held that it had jurisdiction to strike out the claimant’s statement of case but that it would only be done in exceptional circumstances, not least as the judgment on liability amounted to a possession for the purposes of the ECHR. The claim was not struck out. Section 57 of the Criminal Justice and Courts Act 2015 looks as though it would have changed the outcome of Summers dramatically. Here are some of the ingredients and likely problems: ‘fundamental dishonesty’ - the defendant has to prove on the balance of probabilities that the claimant has been ‘fundamentally dishonest’  - a concept which the courts have been grappling with since its introduction in CPR Part 44.16(1) as an exception to the rules on qualified one way costs shifting. Considerable uncertainty remains as to the difference between ‘dishonesty’ and ‘fundamental dishonesty’. ‘primary claim or a related claim’ – the fundamental dishonesty must be ‘in relation to the primary claim or a related claim’. It will be interesting to see how far the courts will go in construing ‘a related claim’ which is defined at s.57(8) as “a claim for damages in respect of personal injury which is made (a) in connection with the same incident or series of incidents in connection with which the primary claim is made, and (b) by a person other than the person who made the primary claim.” ‘application by the defendant’ - the court cannot dismiss the claim under s.57 unless an application is made by the defendant for its dismissal. ‘substantial injustice’ – the court ‘must dismiss the primary claim’ unless satisfied the claimant would suffer ‘substantial injustice’ if it were dismissed. Again, it is not clear what the difference is between ‘injustice’ and ‘substantial injustice’. How is a judge to decide? Would the depriving a claimant of £88,716 amount to a substantial injustice? It is likely that the courts will want to give very careful thought to the needs of the injured claimant (care, economic etc) and consider how well they will be met in the event that the money is not paid over. What will happen to claims for gratuitous care which a claimant is supposed to hold on trust for the providers of that care? They may have nothing to do with the claimant’s dishonesty and yet might find themselves deprived of thousands of pounds for the hours they have given. I anticipate that a large body of case law will quickly grow up around this section. Recording damages – the court must record the amount of damages it would have awarded the claimant and then deduct them from the amount it would otherwise have awarded the defendant in costs. The dismissal of the claim under s.57 must be taken into account in a sentence handed down in any subsequent criminal proceedings S.57 only applies to claims issued after 13th April 2015. Mr Summers may well have been £88,716 poorer had this section been enacted prior to the issue of his proceedings. It will be interesting to see how often section 57 is pleaded and what the courts make of the concepts of ‘fundamental dishonesty’, ‘substantial injustice’ and ‘related claims’.

Employer not liable for employee killed in air disaster

Yesterday, Mr Justice Coulson delivered an extensive judgment in the case of Cassley and Others v GMP Securities Europe LLP & Sundance Resources Limited [2015] EWHC 722 (QB), in which he dismissed the claim for damages brought by the estate of the Deceased (James Cassley) against his employer (GMP) and its client (Sundance), an Australian mining company, who chartered the ill-fated flight. This case was heard only weeks after the decision in Dusek v Stormharbour Securities LLP [2015] EWHC 37 (QB) in which an employer was found to be liable for the death of its employee on facts that were superficially similar to the present. The judgment is of significance to the developing field of employer liability in negligence for death of and/or injuries caused by third party carriers to its staff when engaged in overseas travel. In particular, the judgment provides guidance as to the standards of care that are expected, and perhaps more significantly not to be expected, from employers. GMP were successfully defended by John Ross QC and Kiril Waite instructed by Berrymans Lace Mawer LLP. In 2010, Sundance had approached GMP, who were the London division of a Canadian investment bank, with a view to retaining their services in raising capital for its mining project in Nabeba, Democratic Republic of Congo. The Deceased was a corporate finance executive employed by GMP. He was invited to join Sundance’s board of directors on a private charter flight from Yaoundé, Cameroon to an airstrip used by the mine project in the Congo. Tragically, the flight never reached its destination. The aircraft struck the side of a mountain ridge some 70km short of the airstrip and all aboard were killed. The claim against GMP was brought both for breach of statutory duty and in negligence at common law, based on the non-delegable duties owed by an employer to its employee. The central allegation in the case was that GMP made no risk assessment and no enquiries into the air carrier chartered for the flight. It was asserted that, had they done so, the results of those enquiries would have led them to conclude that it was not safe for the Deceased to have boarded the flight to the Congo. Moreover it was contended that the risk assessment for this one-off trip ought to have been undertaken by an aviation consultant or auditor who also would have known what enquiries to make.   On the undisputed facts, there had been a last-minute change in the air carrier for the flight to the Congo, which GMP did not know nor could reasonably have been expected to know. Accordingly any risk assessment or enquiries made would have been in respect of the original carrier. The factual matrix was complicated by the fact that prior to the Deceased boarding the flight, Sundance required that GMP sign a confidentiality agreement which included a clause that purported to require that it would indemnify Sundance for any injury or death caused to the Deceased. That agreement was never properly executed and not therefore binding. In closing the Claimants sought to advance a new case on causation based on this agreement, namely that no reasonable employer, who had been asked to sign such an agreement, would have permitted its employee to board the plane. Coulson J found that whilst GMP was in breach of its own internal health and safety policy and had failed to make any enquiries about the flight with Sundance, who were the flight charterer, these failings did not amount to an operative breach of duty. He rejected the contention that a company such as GMP ought to have instructed an aviation consultant from the outset. In his judgment Coulson J gives consideration to the types of enquiries that a reasonable employer should make, such as consulting the FCO website. However on the facts of this case, those enquiries would have made no difference to the outcome. Ultimately the claim against GMP failed on causation. There was no evidence before the court that the original air carrier, which GMP had expected would be used, was anything but safe. Even assuming that GMP had found out about the last minute change in carrier, the results from any enquiries that it could reasonably have been expected to make would have led it to reach the conclusion that the substitute air carrier was a safe carrier choice for this flight. The Claimant's new case on causation based on the confidentiality agreement was also rejected by Coulson J. It was a complete non-sequitur for an employer faced with such a document to simply deny its employee entry on board the flight.  The claim against Sundance also failed on the ground that, although Sundance had assumed a duty of care to the Deceased, it had undertaken reasonable enquiries into the suitability of the substitute carrier it selected for the index flight. Claims against employers whose staff are injured or killed in aviation disasters have become something of a burgeoning area in the arena of employer’s liability. This judgment will provide valuable guidance to those involved in this expanding field of litigation.  

Heracles, the Hydra and Basic Hire Rates

In Greek mythology the Hydra was a serpent-like water monster with many heads. For every head cut off it grew two more. It had poisonous breath and blood so virulent that even its tracks were deadly. Credit hire claims are like the Hydra – every time the appeal courts strike off a metaphorical head, another argument (or two) seems to emerge. In a claim for a car hired on credit, absent impecuniosity, the question is what is recoverable? Since Dimond v Lovell [2002] 1 A.C. 384 it has been clear that what is recoverable is the basic hire rate. How is that to be assessed?  The Court of Appeal has just revisited the issue in Karl Stevens v Equity Syndicate Management Limited. How are the additional benefits to be stripped out of the credit hire rate? The burden is on the defendant. But what happens when the court is provided with a wide range of basic hire rates? Kitchin L.J. posed the question: “should the judge take a figure from the top or the middle or the bottom of the range? Or should he take an average? Or should he conclude… that, if one of the figures at the top of the range is close to or exceeds the credit hire rate, then the defendant has simply failed to prove that the BHR is less than the claimed credit hire rate and so not apply a discount at all?” Lord Hoffman said in Dimond that the court should consider what the claimant would have been willing to pay an ordinary hire company for the use of a car. However he did not mean that the court should consider what the individual claimant was prepared to pay: the attitude of the actual claimant was irrelevant. The analysis is an objective one and is to determine what the BHR would have been for a reasonable person in the position of the claimant to hire a car of the kind actually hired on credit. The Court of Appeal concluded that it was reasonable to suppose that the lowest reasonable rate quoted by a mainstream supplier for the hire of the vehicle is a reasonable approximation to the BHR. The key is to identify rates for the hire, in the claimant’s geographical area, of the type of car actually hired. If that yields a single rate then that is likely to be a reasonable approximation of the BHR. If a range of rates, then the BHR may be obtained by identifying the lowest reasonable rate quoted by a mainstream supplier, or if not mainstream supplier, by a local reputable supplier. It was one of the 12 labours of Heracles to destroy the Hydra and he did so with the assistance of Iolaus who finally burned out the roots of the heads with firebrands as Heracles cut them off. Whether the Court of Appeal has achieved this with credit hire claims remains to be seen.  (Photograph courtesy of  www.freephotobank.org)

Retiring gracefully ... and gradually?

Most personal injury lawyers think a lot about retirement. This can be their own, in my case usually when grappling with costs budgets, but is more likely to be that of the party whose claim they are advancing or opposing. The date of retirement is crucial to the value of a loss of earnings claim.   Most personal injury schedules claim full time working to age 68 or even 70. Most counter schedules contend for retirement at age 65.   However, new research shows the way people view retirement is changing. Nearly two-thirds of people aged over 50 no longer think that working full time and then stopping work altogether is the best way to retire and around half would still like to be in work aged between 65 and 70.   YouGov surveyed more than 2,000 retired and non-retired people aged over 50.   https://yougov.co.uk/news/2014/11/05/concept-gradual-retirement-attracts-non-retired-ad/   The survey showed:   39% of over 50s not currently retired said that working part time or flexible hours before stopping work altogether would be the best way to retire. 48% of those under 65 and not currently retired would still like to be in work between 65 and 70. 36% of retirees say their advice to others would be to “consider switching to flexible or part time work for a period first” before stopping work altogether. 33% of those over 70 and still working said they did so because they enjoyed it.   The survey also suggests that some non-retired people over 50 both in and out of work were ready to learn new skills. Nearly half (47%) said they were interested in attending training courses to learn new or to update existing skills.   There are lessons here for both schedulers and counter schedulers. An absolute retirement age of 65, 68 or even 70 may now be unrepresentative. Gradual retirement is increasingly the trend at least in England and Wales.   In “The Later Years of Thomas Hardy” (Macmillan, 1930), Florence Emily Hardy reports the author’s observation that:   “The value of old age depends upon the person who reaches it. To some men of early performance it is useless. To others, who are late to develop, it just enables them to finish the job”.   I cannot promise still to be working beyond age 70. If I am, I can promise it will not be on costs budgets!  

Rome II and the Law of the Tort

Those with an interest in the Rome II Regulation (there must be someone else out there) may already be familiar with the recent decision of Slade J in Winrow v Hemphill & Anor. [2014] EWHC 3164 (QB). This short piece focuses on one aspect of the judgment. First, however, a quick recap. The claim arose out of a road traffic accident in Germany in November 2009. The Claimant was a UK national, domiciled in England, who was living in Germany at the time of the accident (having moved there with her British Forces husband several years before the accident). The Claimant returned to England around 18 months after the accident and continued to live in England at the time of trial. The First Defendant was also a UK national. She was also an Army wife and her husband served with the Army in Germany. The First Defendant, like the Claimant, later moved back to England. The Second Defendant insurer was registered in England/Wales. It was the insurer of the First Defendant at the time of the accident. The Claimant was a rear seat passenger in a vehicle driven by the First Defendant. The vehicle was involved in a head-on collision with a vehicle driven by a German national. It was not in issue that the accident was caused by the negligent driving of the First Defendant. Accordingly, liability was not in issue and judgment was entered. The parties continued (and continue) to fight the causation and quantum issues. The preliminary issue trial before Slade J concerned the applicable law of the tort and, more particularly, under Art. 15(c) of Rome II, the law to apply to the assessment of the damages to which the Claimant would be entitled: should damages be assessed, as the Claimant argued, according to English law (on application of Art. 4(3) of Rome II) or should they be assessed, as the Defendants argued, according to German law (by reason of Art. 4(1) of Rome II)? Slade J determined the preliminary issue decisively in the Defendant insurer’s favour: German law was to be applied. However, in the course of her judgment she stated (para 45 if you’re really interested), “I do not accept the contention ... that the circumstances to be taken into account in considering Article 4(3) will vary depending upon the issues to be determined and ... the stage reached in the proceedings. Nor do I accept the submission that ‘the centre of gravity’ of the tort when liability was conceded and only damages were to be considered depended upon circumstances relevant to or more weighted towards that issue.” The question I leave you with is why this is so. In Winrow liability was conceded and only causation and quantum remained to be dealt with. Most dispassionate observers would accept that causation and quantum were more closely connected to England (where the Claimant lived at the time of trial and was experiencing ongoing loss and where medico-legal experts were based) than Germany. If – as Art. 4(3) – directs” all the circumstances of the case” are to be considered in determining whether the tort/delict is more closely connected with one country (England) than another (Germany), it would seem artificial (at best) and, more ambitiously, wrong (in law) to put out of mind the fact that liability was no longer in issue and, therefore, was no longer a relevant consideration. Some of the textbook writers – particularly those wedded to a more certain/less discretionary approach to the identification of the applicable law of the tort – might (like Slade J) baulk at the approach advocated on behalf of the Claimant. However, there may – in this limited way – still be room for English common law inroads into (even) the Rome II regime so that some weight is given to the issues actually in dispute before deciding which law ought to be applied to them.

Whiplash and fraudulent claims

The justice secretary spoke to the Association of British Insurers yesterday telling them about the new panels of medical experts in whiplash claims, reported The Times today. The government’s plans for such panels have long been known about but he announced that accredited experts would be allocated randomly to cases going through the Portal. He said there was an expectation that there would be one report per case. Experts who are not accredited by April 2015 will be barred from providing reports in whiplash claims. The difficulty of experts in personal injury cases providing reports which please/suit the party instructing is a long standing problem. The danger is that experts on these panels will decide the outcome of cases and that the courts will make it difficult to challenge their conclusions. If a panel expert finds that a claimant has not suffered any injury and the claimant obtains his own report which says the opposite, how receptive will courts be to an application to adduce evidence from the claimant’s expert? If there is an expectation of one expert per case, such an application may well not succeed. Mr Grayling is also reported to have said that new rules were to be introduced so that claims could be dismissed in their entirety if the courts were satisfied that claimants had been fundamentally dishonest. This may be aimed at the Supreme Court decision in Summers v Fairclough Housing Limited [2012] 1W.L.R. 2004 in which a claimant was found to have fraudulently misstated his case as worth £800,000 but was awarded £88,000. The Supreme Court held that it had an inherent jurisdiction to strike out such claims but that the jurisdiction was to be used exceptionally. It would be interesting to know whether Mr Grayling had this decision in mind.

Schedules, Counter Schedules and the Gadget Generation

    No self-respecting Schedule of Loss is now complete without a hefty claim for “Assistive Technology” items. The response in most Counter Schedules is that the Claimant is likely to have possessed all or some of the items being claimed in any event. The fact is that UK parents now spend a combined £2.25 billion a year or just under £300 per year per household on technology for their children.   This information comes from research on behalf of E.ON UK, one of the UK’s large energy providers.   http://pressreleases.eon-uk.com/blogs/eonukpressreleases/archive/2014/07/25/2376.aspx   We are truly the “gadget generation” in that today’s children possess an average of 4 gadgets each.   Staggeringly, parents with children aged under 5 spend even more. On average a “techie tot” is given gadgets costing £395 per year. Not surprisingly, it is teenagers aged 15-17 who are the most “plugged-in” typically owning 7 devices each.   The trend continues into adulthood. From age 18, parents of males spend over £717 a year on gadgets for their sons. Females aged 18 and over have just under £1,000 worth of gadgets bought for them by their parents per year.   It will come as no surprise to readers not in these age groups to learn that most (56%) of parents acknowledge using their children's “technology hand-me-downs”. 32% of parents also confessed to not being as “tech-savvy” as their children. Most worryingly of all, 14% of parents admitted that they could not even match their “techie tots” when it comes to knowing their way around the latest gadgets.   Perhaps the Counters Schedulers have a point?

The ever-ageing 13-Year-Old Compensation Discount Rate

There has been a further delay to the much-anticipated and important decision on the discount rate to be applied to compensation. And this comes almost two years after conclusion of the consultation on the question of whether the current rate of 2.5% should be modified.   This issue is of course of extreme importance to anyone involved in injury litigation. The legal professions are somewhat divided as to whether the rate should be increased or decreased, along (usually) respectively defendant and claimant lines.     Chris Grayling, the Justice Secretary (as he is more commonly known rather than Lord Chancellor) has now announced that he wishes to appoint  panel of three financial investment experts to analyse all the responses to a consultation on the discount rate that closed as long ago as October 2012. It has been widely reported that the government’s initial response to its consultation was that successful claimants were prepared to invest in higher-risk investments than currently assumed. However, further research published in August 2013 the diametric opposite! The tender process for the appointment of these experts has yet to be completed.   The further delay prompted an understandably outraged response from the Association of Personal Injury Lawyers (APIL), who with some justification accuse the Government of ‘dragging its heels’ on the issue of a discount rate that has been set at the same level for 13 years. In the Ministry of Justice’s somewhat testy reply Mr Grayling said he saw ‘no reason’ to publish a timetable setting out how long the decision will take. (Perhaps he sees little reason to attempt to garner favour with lawyers, recognising bridges and boats may have been well-burned?)   It is unclear when anything approaching a final decision will be reached. Clearly it is unlikely to be in the lifetime of the current Government. The only seemingly sure advice, is for anyone interested not to hold their breath!

Want to live longer … Move to Dorset!

Dorset is the birthplace of Thomas Hardy. Hardy loved the Christmas season and his novels, short stories and poems are full of references to it. My favourite Hardy novel “Under the Greenwood Tree” begins on Christmas Eve.  Dorset now has another attraction. It has the highest average life expectancy in the UK with men living to 83 years and women to 86.4 years. The Office for National Statistics has recently published its “Interim Life Tables, England and Wales, 2010-2012”.  http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-325699 These will be of interest to personal injury lawyers tempted to spend part of the Christmas period doing schedules or counter schedules. The headline points are that life expectancy in England and Wales has increased by more than a year in the past decade. However, the distribution of life expectancy across England is still characterised by a north-south divide with people in local areas in the north generally living shorter lives than those in the south. Boys are also narrowing the gap on girls when it comes to life expectancy in England and Wales. The ONS reports that baby girls born 30 years ago were expected to live six years longer than boys. Now it is less than four. This is because fewer men now work in heavy manual labour which historically had high death rates as a result of industrial accidents. They are also less prone to diseases that affected workers in certain industries, such as mining. In contrast, women who might once have stayed at home have taken on the stress of working. In addition, many women also care for children or ageing relatives or both as well as providing for their family financially. Kathy Gyngell, a research fellow with the Centre for Policy Studies, observes that   “We are increasingly seeing more women suffering from what were once male diseases – heart disease, high blood pressure, even baldness”. In case you were wondering men in Blackpool have the lowest average life expectancy at 73.8 years while the lowest for women is in Manchester at 79.3 years. As well as Christmas, Thomas Hardy also had a view on old age: “The value of old age depends upon the person who reaches it. To some men of early performance it is useless. To others, who are late to develop, it just enables them to finish the job”. Florence Emily Hardy, “The Later Years of Thomas Hardy” (Macmillan, 1930). To late developers everywhere, Happy Christmas!

Accidents at sea: the limitation traps for claimants and defendants

The Athens Convention is notorious for catching out PI practitioners with its current two year limitation period* for accidents at sea. Indeed the few reported cases on it are mainly concerned with whether it is possible to extend time (Higham v Stena) or whether a cause of action exists outside the Convention (Norfolk v My Travel) – both resulted from a failure to issue in time. Judgment is shortly to be handed down in a case which may make life even more complicated for the personal injury practitioner. The issue is whether Article 16 of the Athens Convention extinguishes the cause of action or whether it bars the remedy. This fine distinction rarely troubles most personal injury practitioners but it has historically been a feature of our, and other, common law jurisdictions. In the UK we have, with exceptions, a system of limitation which stops a litigant accessing a remedy on the expiry of a period of time. Exceptions include claims relating to land and defective products. Other jurisdictions have a system of prescription which means that when time expires, the cause of action is extinguished. Why does this matter? Because under section 1(3) of the Civil Liability Contribution Act 1978 a party may claim a contribution from another tortfeasor who is liable for the same damage, except where the cause of action against that other tortfeasor has been extinguished. Where that is the case the contribution claim cannot proceed after the expiry of the time limit and there is no 2 year limitation period under section 10 of the Limitation Act 1980. In The Celtic Pioneer the judge heard arguments on the third party claim last week. The claimant was employed by the defendant and was seconded to another organisation. Whilst with that organisation she was injured on a boat trip. Her (former) solicitors missed the 2 year limitation period against the boat company and she sued the defendant (a strategic health authority). The defendant sought to bring in the carrier which successfully struck out the defendant’s claim on the basis that the cause of action was extinguished by Article 16 of the Athens Convention. The appeal was heard last week. The twist is that Article 16 is couched in the language of being a ‘Time-bar’ to an ‘action being brought’ which contrasts starkly with the equivalent provisions of the Warsaw and Montreal Conventions which refer to the cause of action being ‘extinguished’. The defendant argued that regardless of the language of a ‘time-bar’, Article 16 extinguishes the cause of action on the expiry of the 2 year limitation period. Claimants may miss the 2 year time limit but there is the potential that this judgment will catch out defendants wanting to bring third party proceedings and not realising that they must also bring their claims within 2 years of the accident. Indeed the same logic would apply to other international conventions given the force of law in the UK. Watch this space for the result... (John Ross QC and Ian Miller were counsel for the Appellant in The Celtic Pioneer).   *The limitation period may technically be suspended or interrupted up to a limit of 3 years under Article 16.3 or extended by agreement under Article 16.4F Photograph: Ian Britton FreeFoto.com