piBlawg

the personal injury and clinical negligence blog

A collaboration between Rebmark Legal Solutions and 1 Chancery Lane

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!

Fighting Fraud - paying off for motor insurers and their customers?

Recent growth has been seen in the litigation market in the field of allegations of fraud in road traffic accident cases. Insurers (particularly certain insurers) have latterly been far more confident in fighting claims where there is good evidence of something untoward: dishonesty, such as contrived accidents, phantom passengers or exaggerated medical symptoms.   This strategy appears to be working. Miles Costello in The Times' Business Section reported yesterday that an analysis by EY of Britain's motor insurers annual profits to March 2014, shows they paid out less in claims than they received in premiums for the fist time since 1994. The article however quite properly cites other reasons for this, such as the ban on referral fees and restructuring of the fees recoverable under "new" CFAs. The knock-on effect has been felt by the motorist - this time in a good way - with a 16.6 per cent drop in premiums over the last year to March.   It would be interesting to see if this trend continues. Certainly as the new costs provisions become the norm, it is likely to. The effect of allegedly to be tighter "rules" for diagnosing whiplash injuries (if brought in) are likely to reinforce it as are bans on "distasteful" advertising and incentives such as free tablet computers and cash advances promised to potential claimants. 

Legislating for "Statutory Common Sense" and Personal Injury Litigation?

A court considering a claim in negligence or breach of statutory duty may, in determining whether the defendant should have taken particular steps to meet a standard of care (whether by taking precautions against a risk or otherwise), have regard to whether a requirement to take those steps might— (a) prevent a desirable activity from being undertaken at all, to a particular extent or in a particular way, or (b) discourage persons from undertaking functions in connection with a desirable activity. Please excuse the cumbersome language. This is section 2 of the Compensation Act 2006 – a statutory provision which is rather underused by defendant lawyers (and apparently largely unknown to judges). However, perhaps this is not without good reason. Whilst the provision’s introduction was fêted as being a powerful weapon in the hand of the defendant and judge in the fight against the rising tide of personal injury litigation seen since the late-1990s, it clearly has not had much of an effect. Part of the reason for this may well be the slightly vague nature of the terms of the provision: firstly the word “may” instead of “must”; and the obvious subjectivity of the interpretation of the word “desirable”.   This is something of a worry to the current administration, at least following the recent local and European Elections. Concern more widely about ‘health and safety’ (particularly amongst older and more Euro-sceptical sections of the electorate, whose votes may no longer be a safe bet for the current political party in power) appears to have been taken more seriously.   It has recently been widely reported that the Lord Chancellor wants an inclusion in the Queen’s Speech setting out the Government’s commitment to statutory reform to end any ‘chilling effect’ that any such concerns may engender. The BBC reports that the Ministry of Justice “wants to force judges to give weight to three factors in cases where people do end up facing litigation: If the person was doing something "for the benefit of society", such as clearing snow If they were acting in a "generally responsible way" If they stepped in to help in an emergency” It is reported that the MoJ wishes to "put the law more clearly on the side of employers" when something goes wrong at work through no fault of their own”, and that  the “law change would protect small business owners who take a "responsible approach to safety training and procedures" from the challenges of "irresponsible employees". The Lord Chancellor is quotes as suggesting that he would "want a society where common sense is the order of the day, and I believe this measure will help us get there."   So ‘watch this space’ as to whether/how this may change the nature of personal injury litigation…

Costs Budgets and Unallocated Part 8 Claims issued before 22 April 2014

Some further clarity as to when to file costs budgets can be gleaned from the decision of Mr Justice Hickenbottom in the case of Kershaw v Roberts & Anor  [2014] EWHC 1037 (Ch). Here it was argued on appeal from the county court that the first directions hearing in a Part 8 Claim should be treated as the “first CMC” for the purposes of CPR 3.12-14 and thus costs budgets must be filed in advance.   It was argued that whilst the claim had not been allocated to the multi-track, this was inevitable as it was commenced by way of Part 8.   The learned judge however dismissed this argument, holding that the claim was not allocated to the multi-track until the district judge specifically allocated it to that track during the course of the county court hearing. IT was held that “consequently, that hearing itself was not – indeed could not have been – a CMC… The notice of the hearing did not refer to it as a CMC; and it seems to me clear that the court, in sending out that notice, never intended the hearing to be a CMC.”   This guidance is however of somewhat limited scope in that it only really applied to unallocated Part 8 Claims. This is because, on 1 April 2014 (the same day as the hearing of Kershaw), the Civil Procedure Rules Committee made amendments to the CPR by the Civil Procedure (Amendment No 4) Rules 2014 (SI 2014 No 867). Which are due to come into force on 22 April 2014. From that date, the costs management provisions of CPR Rule 3 Section 2 and CPR PD 3E (including costs budgets) will not automatically apply to any Part 8 claim. Those provisions will only apply if the court makes a positive order that they should (as expressly confirmed by new Rule 3.12(1A)).

The Problem with some Uncooperative Litigation Friends

What happens when you are involved in litigation where a party’s interests (either your client or the other side’s) are represented by litigation friend who refuses to cooperate with you or other people involved in the case? In many cases, surely the answer is simply to apply to the court for the recalcitrant litigation friend to be replaced for the best interests of the protected litigant. However it is clear that notwithstanding the manifest damage being caused by an uncooperative litigation friend, their removal may be anticipated to do more harm than good. Such was the case in M (a child by his father & litigation friend) v LB of Lambeth (Defendant / Pt 20 Claimant) & Hyde Southbank Homes Ltd (Pt 20 Defendant) [2014] EWHC 57 (QB). Here C had suffered a serious injury after falling from a window, aged four. His own medical expert stated that C had probably suffered a brain injury and there was "significant brain impairment". However, the defendant's experts stated that C's impairments "were consistent with his pre-injury functioning" and on balance were probably "secondary to his inherent pattern of development and may have been contributed to by social and cultural factors". In short, the experts were poles apart. C’s litigation friend was no longer prepared to co-operate with medical experts and was not amenable to putting in place the support recommended for C. He and C’s mother had instructed C's solicitor to settle the claim as soon as possible. Sensibly worried about the situation they found themselves in, C's solicitors sought the court's guidance upon whether the litigation fiend’s appointment should be terminated, and whether the case should be settled even though it remained unclear whether C had suffered a brain injury and what his disabilities might be in the future. However, the Court held that as the litigation friend was also C’s father, even should a new litigation friend be appointed, it would be unlikely that C’s parents would become any less uncooperative as they were being presently and would probably continue to hinder C’s best interests. Against this background, it was held that the best (or perhaps the “least worse”) course in this particular case was for C’s solicitors to seek to negotiate settlement on the basis of the existing medical and other evidence, as instructed by C’s father and current litigation friend. Clearly this was a far from ideal position for either C or indeed the Defendant Party. Without greater clarity as to C’s medical position there was inescapably a risk of significant injustice to both sides. However when faced with such an unusual situation, the Court held there was little positive it could do, rather than risk making the position worse. This must have weighed heavily upon Mr Justice Tugendhat’s mind when he later came to approve the settlement the Parties reached.

Lest we Forget (our senses)

Personal injury law has a poor image in the eyes of the general public. For many reasons of course, this is unfair. Often it is the overreactions of various (frequently Public Sector) organisations who utterly overreact to potential alleged “health and safety risks”. Examples are legion: conkers in schools, blu-tac on walls and Christmas decorations are all subjects of recent media hype, when they have been cited by over-zealous (to be charitable about them) health and safety advisors as being sources of potential injury and consequent expensive litigation.   Today we remember those who gave their lives for our Country in war. Most right-thinking people wear poppies as a mark of remembrance. However some schools and businesses have been worried about the health and safety implications of such a practice. Some organisations have been refusing to distribute poppies due to the fact that some require the use of pins!   The Government has seen fit to step in however to assuage such overreaction in this case. Michael Penning, the new minister for health and safety has written to the Royal British Legion as well as business leaders telling them essentially that no legal challenge would be possible from people who “injure” themselves with poppy pins.

A defendant's nightmare?

  A Defendant’s Nightmare?   Sarah Davison would normally get to her desk by 6 a.m., work for twelve hours and often head out thereafter to meet and entertain clients. Sleep felt like it was secondary to achievement. She worked in a macho environment and her boss was a man who, in the words of Andrews J, “does not suffer fools gladly, or indeed at all”. But Mrs Davison was well-paid: at the time she left on maternity leave to have her first child she was earning over £200,000 a year. When, after giving birth to that child, she suffered a career-ending injury as a result of clinical negligence, the resulting claim was always going to be of the size that makes defendants and their insurers wake up in a cold sweat in the middle of the night.   Andrews J’s judgment on damages (Sarah Davison v Craig Leitch [2013] EWHC 3092 (QB)) makes interesting reading. A court called upon to assess loss of earnings in such a situation is engaged in a difficult exercise, perhaps best characterised, to borrow one of my favourite judicial dicta of Lindsay J, as “a glance at a crystal ball of, so to speak, only a low wattage” (see Douglas v Hello! Ltd (No.5) [2003] EWHC 786 (Ch)). There are often a number of variables and changing any one of them can have a significant effect on the ultimate award.   One approach is to consider a number of possible scenarios, determine the probability of each of them occurring, and then multiply that figure by what would have been earned in each scenario; that can sometimes be the only way to do justice, particularly where a person had a chance of a “big break” which, had it occurred, would have lead to very significant rewards. The kick-boxing claimant in Langford v Hebran [2001] PIQR Q13 is a good example of this approach being applied; it works best where there are a limited number of clearly defined possible scenarios; where they are more numerous, or the lines between them more blurred, the calculation can become unwieldy.   The more traditional approach, and the one adopted by the court in Davison, is simply to make a best guess as to how the claimant’s career would have progressed absent the tort. This will inevitably involve scrutiny of the claimant’s pre-accident career and abilities. Andrews J was clearly impressed by the evidence on this point of Mrs Davison’s ex-boss, a man so busy he had to give evidence “via video link ... en route to catching a plane”. There may also be a need, particularly in a volatile or cyclical industry such as financial services, to assess what the future demand would have been for a person’s services.   Andrews J broadly accepted the Claimant’s evidence on these two points; where she differed was as to the likelihood of the Claimant continuing in her pre-accident role as an equities trader once her three children were born, holding “it highly unlikely that when Mrs Davison returned to work after her maternity leave ... she would have had the appetite to return to the stresses of the trading floor and face the prospect of never seeing her three small children during the week ... However much she would like to believe otherwise, in my judgment it is far more likely that she would have moved to a less stressful position within the bank, involving shorter working hours.”   The judgment is also interesting for its award of £6,500 for loss of congenial employment. Given the description of Mrs Davison’s working life at the start of this post, one may well question whether it can really be described as “congenial”. Andrews J justified the award on the basis that Mrs Davison’s “future is uncertain and any work she does undertake in future is likely to be fairly solitary and considerably well paid”. This is curious reasoning. The fact that the Claimant was likely to be paid less was, of course, compensated by an award for future loss of earnings. It might be said that her earnings are relevant to what was in effect an award for loss of status, but here again surely one has to look at all the circumstances of her pre-accident employment. Andrews J found as a fact that the most likely future for the Claimant would be running her own small business, possibly as an interior designer. Of course, that would lack the stimulus and status of a job in the City, but it would also lack its stresses and uncertainties. Can it really be said, taking everything into account, that the Claimant’s overall quality of life would undoubtedly be the poorer? Less well-paid, certainly; but less congenial? - it is perhaps to be doubted. There is a danger that awards under this head will become routine in all cases where a claimant is unable to pursue their chosen career. Perhaps the Law Commission’s suggestion that this should not be a separate head of damage at all, but rather should be considered as part of the award for PSLA, deserves reconsideration.        

A Handbook for Litigants in Person Published

The Judiciary of England and Wales have sought to pre-empt the predicted wholesale increase in litigants-in-person by publishing what it has modestly titled ‘A Handbook for Litigants in Person’. I say “modestly” as it runs to some 170 pages and appears on a first read through to be extremely comprehensive. Indeed the learned editors have gone so far as to provide the would-be amateur litigator with a brief history of the process of litigation (for example, a brief mention of the Saxon origins of the County Court!).  It appears to be a valiant effort in any event to proffer some valuable guidance into the process of litigating in England and Wales, which must appear to be Byzantinely-complex to many. The Handbook clearly requires an intelligent reader and one with pretty advanced literacy skills. This observation surely must not be a surprise to the said learned editors, but probably reflects the reality of the projected altering demographic of litigant in person in the courts. The Handbook is available online at:  http://www.judiciary.gov.uk/Resources/JCO/Documents/Guidance/A_Handbook_for_Litigants_in_Person.pdf

Suitability and work equipment: a new test and an even greater burden on employers?

On 23rd April 2013 the Enterprise and Regulatory Reform Act received royal assent. One of the most controversial changes that it will introduce is an amendment to the Health and Safey at Work Act 1974, the effect of which will be to abolish civil liability for breach of the various ‘six pack’ regulations which govern employer’s liability. The regulations can still be relied upon as evidence of a failure to exercise reasonable care, but the burden will rest with the injured employee to prove that the accident has been caused by the negligence of the employer.     The difference between liability for negligence at common law, and the stricter requirements of regulations emanating from Europe, was brought into sharp focus by the recent court of appeal decision in Hide v The Steeplechase Company (2013) EWCA Civ 545. The claimant was a self-employed jockey. He jumped the first hurdle at Cheltenham racecourse when his horse stumbled and fell. It careered sharply to the right, which caused Mr Hind to fall, hit the ground and roll sideways into one of the upright posts of the guardrails surrounding the track. The Defendant was able to produce quantities of evidence that the track had been audited and inspected by relevant regulatory bodies and found to be of the highest standard in terms of safety. Indeed, the Court of Appeal commented that the course had received consistently ‘glowing recommendations’ and that no concerns had ever been raised about the safety of the fencing or its proximity to the hurdle. However, the Claimant relied upon regulation 4 of the Provision and use of Work Equipment Regulations 1998. The argument, in simple terms, was that, applying Robb v Salamis (2007) ICR 175, work equipment which might foreseeably cause injury was not suitable. Accordingly, since the fence and hurdle were work equipment (a point which was not appealed) and since it was foreseeable that a rider might fall off a horse whilst negotiating a hurdle and strike the fence, suffering injury, the equipment was therefore unsuitable.  The trial judge found that the Claimant bore the burden of proving that injury was foreseeable. He held that no accident had ever taken place before, that this accident occurred in a truly bizarre fashion, the risk of injury and falling was inherent in horse-racing and  it was not reasonably foreseeable that the Claimant would suffer injury in the way that he did.   On appeal, the Court of Appeal reiterated that it was irrelevant that the precise mechanism of the accident was not foreseeable: only foreseeability of some injury was necessary. This was a point that the House of Lords had already emphasised in Robb v Salamis and, to this extent, the judgement takes the law no further. However, the Court went on to find, after a careful analysis of the Work Equipment Directive, which implements the 1998 Regulations, that: 1)      Once the Claimant shows that he has suffered injury as a result of contact with a piece of equipment which may be unsuitable, the burden shifts entirely to the Defendant. 2)      The Defendant can only escape liability by proving either that the accident was due to unforeseeable circumstances beyond its control or to exceptional events the consequences of which could not be avoided in spite of the exercise of all due care on his part. Somewhat bizarrely, therefore, the Court of Appeal has brought the fault of the employer back into the equation under Regulation 4 (whereas previously only foreseeability was relevant). However, at the same time, it has set the hurdle (no pun intended) so high as to make it extremely difficult, if not impossible, for the employer to discharge the burden in the vast majority of personal injury claims.  On the facts of the case, the racecourse had not shown the accident fell within either of the narrow exceptions above and liability was therefore established. The decision in Hide will no doubt be cited, by proponents of the new legislation, as a fine example of the reason that change is required. The judge at first instance, whose decision was overturned, regarded the Claimant’s arguments as demonstrating “the relentless logic of the personal injury lawyer”. The Court of Appeal plainly had some sympathy with this position but concluded that the Regulations simply “give rise to a form of liability which is a stricter liability than at common law”  It will be interesting to see what extent the same case would be decided differently after the new legislation comes into force.

CPR 3.14 - How Explicit and Draconian?

The notes in the White Book below Civil Procedure Rule 3.14 suggests the “rule is explicit and the consequences of failure to comply Draconian”. The rule itself provides that “Unless the court otherwise orders, any party which fails to file a budget despite being required to do so will be treated as having filed a budget comprising only the applicable court fees.” It has yet to be tested by way of an appeal to the Court of Appeal (despite the author’s best efforts on several occasions). However it would appear that guidance is likely to be forthcoming soon. In an interesting twist to an interesting case, the High Court limited costs awarded to Andrew Mitchell MP in his litigation against The Sun to applicable court fees only due to his "absolute failure" to discuss budget assumptions with the newspaper and failure to ask for additional time in advance. At a case management conference in June of this year, Mitchell and The Sun were ordered to exchange costs budges as per the new CPR regime. Mr Mitchell’s lawyers however failed to do so and thus the court, in accordance with the explicit and draconian wording of CPR 3.14, held that he would thus be "limited to a budget consisting of the applicable court fees for his claim". After hearing evidence about the reasons behind the non-compliance the sanction was not lifted. Master McCloud took a strict approach and is widely reported as holding that: “Budgeting is something which all solicitors by now ought to know is intended to be integral to the process from the start, and it ought not to be especially onerous to prepare a final budget for a CMC even at relatively short notice if proper planning has been done…", and that "The court must now, as part of dealing with cases justly, ensure that cases are dealt with at proportionate cost and so as to ensure compliance with rules, orders and practice directions…" The Master noted that it would have been "far more likely" that the sanction would have been lifted against Mitchell before the reform of the CPR in this regard. However she said that in "the absence of authority on precisely how strict the courts should be and in what circumstances", and "[i]t will be for the appeal court to determine whether such a strict approach is appropriate". That appeal would be "on the basis that the severe nature of the sanction which I have imposed in giving effect to [the costs reforms] ... are of necessity not backed by specific authority on point, and the risk of injustice if I were adopting too strict an approach is such as to provide 'some other compelling reason' for an appeal to be heard”.