piBlawg

the personal injury and clinical negligence blog

A collaboration between Rebmark Legal Solutions and 1 Chancery Lane

Dealing with the discount rate review

A settlement award of £7.85 million (capitalised current value) was recently agreed in the case of TBE v Royal Berkshire NHS Trust.  The award comprises a lump sum payment of £3,660,700 plus annual payments index linked to ASHE 6115 of £140,000 to age 19 and £225,000 from age 19 for life.    The case involved a 10 year-old claimant, TBE (name abbreviated to protect his and his family's privacy), who has severe cerebral palsy caused by medical negligence during his birth. The award of damages will be overseen by the Court of Protection and will be used to provide TBE with the 24 hour care, equipment, therapies and accommodation he will need for the rest of his life.    The order giving effect to the compromise of TBE’s claim included a mechanism for reassessing the multipliers used in calculating his claims for future losses at the conclusion of the review of the discount rate announced by the Lord Chancellor on 9 November 2010. The discount rate which was set at 2.5% by the Damages (Personal Injury) Order 2001 was based on yields generated by index-linked government stock (ILGS). However the rate has not been varied since 2001 and has become increasingly unrealistic in that a 2.5% per year real and net discount rate has not been achieved since the rate was first set.   Accordingly it was necessary for the parties to agree and for the order to include the matters which will in due course be reassessed. In particular, it was necessary to define (1) the “future life sum” (LS)  (2)  the full life multiplier (LM) representing a term certain from Table 28  (3) the “future earnings sum” (ES”) and (4) the earnings multiplier again representing a term certain from Table 28. The intention is that once the Lord Chancellor has concluded his review and determined any new discount rate, the new full life multiplier (“NLM”) and the new earnings multiplier (“NEM”) will be recalculated by reference to Table 28 using that new discount rate.   To arrive at the LS it is necessary to deduct (1) general damages and interest (2) past losses and interest (3) capital expenditure and other costs in the first year (4) CRU (5) any adaptation costs and other costs associated with the immediate purchase of a property.   The advantage to a Claimant of adjourning the issue of the discount rate is that as a result of the review the rate may be decreased resulting in a higher multiplier for future loss. However, careful consideration needs to be given as to whether this is appropriate. For example, the multiplicand under the principles in Roberts -v- Johnstone is also calculated by reference to the discount rate. It follows that a reduction in the discount rate, whilst increasing the multiplier, will decrease the multiplicand to which that multiplier is applied.  There is also the risk that the discount rate may be increased rather than decreased. In the present economic climate this seems unlikely. However, the economy, both in this country and abroad, may look very different in say 18 months or 2 years. Clients will therefore need to be given careful financial advice before agreeing the final form of order and legal advisers would be well advised to record both what that advice is and the fact that it has been given.       

RTA Insurer not liable for the 'same damage' as its insured

In Jubilee Motors Syndicate v Volvo Truck & Bus (Southern) Limited (2010) Jubilee, a road traffic insurer within the meaning of the Road Traffic Act 1988, had been ordered to pay damages following the settlement of a claim against its insured (Volvo) by an injured third party. Jubilee thereafter instigated contribution proceedings against its insured under the Civil Liabiliy (Contribution) Act 1978. Its argument was two-fold. First, it alleged that it was a "person liable in respect of the same damage" as its insured under section 1(1) of the 1978 Act. Alternatively, Jubilee  relied upon section 1(4) of the Act, which provided that "a person who has made or agreed to make any payment in bona fide settlement or compromise of any claim made against him in respect of any damage (including a payment into court which has been accepted) shall be entitled to recover contribution in accordance with this section without regard to whether or not he himself is or ever was liable in respect of the damage" Striking out the contribution claim, the Court held that the terms "same damage" and "in respect of" in s.1(1) of the 1978 Act had to be construed narrowly, in accordance with established case-law. Unlike any potential liability that Volvo might have owed the injured third party directly (i.e as the tortfeasor), Jubilee's liability was contingent on its contractual obligations under the policy of insurance. The 1988 Act did not render Jubilee liable for the third party's personal injuries as such, but rather to satisfy a judgment resulting from the third party's suffering of those personal injuries, as caused by Volvo. Jubilee had never caused the third party any loss or injury. It was never directly, or vicariously, liable for the third party's injuries and could not be regarded as a  'wrongdoer' of any kind.  The claim under s.1(4) of the 1978 Act was also struck out. That section could not be read as having a meaning different from, or extending beyond, the court's definition of "same damage" in s.1(1) of the 1978 Act. Both sections had to be read together. Do you agree with the Court's analysis in this case? Should it matter that Jubilee's liability to pay the agreed settlement with Volvo arose either from the Statutory framework under the Road Traffic Act 1988, or under the policy of insurance?      

B v Ministry of Defence [2010] EWCA Civ 1317

  Section 33 and causation: Personal injury claims issued three years after the date of knowledge are time barred pursuant to section 11 and 14 of the Limitation Act 1980. However, it is often assumed that where a fair trial can still go ahead, the Court will most likely dis-apply the three limitation period and exercise its discretion under section 33 of the same Act. The cogency of the evidence and the ability to defend a stale claim are the very important considerations when analysing the prejudice. However, careful consideration should be given to ‘all of the circumstances’, including a broad assessment of the merits of the claim. This point is illustrated well in the recent case of B v Ministry of Defence [2010] EWCA 1317. The Court of Appeal handed down judgment on 22 November 2010. The judgement is long but interesting in its analysis. The Court of Appeal held that: 1.      A fair trial could still go ahead despite the passage of time. 2.      The judge had erred in his broad assessment of the merits - the assessment was to be carried out objectively.  3.      The Court of Appeal found that the prospects of proving a breach of duty were not good, but were not poor either. 4.      The claims faced very great difficulties on causation: they would have to satisfy the "but for" test and could not rely on proving that any such breach had materially contributed’ to their injuries. 5.      The expert evidence was such that the Claimants could not satisfy the but for test. Consequently, the judge was wrong to exercise his discretion under section 33 because the Claimants’ prospects of establishing causation were hopeless.   

No liability for stressful disciplinary process: Dermott v LB Harrow

In a judgment handed down on 21 January 2011, McKay J dismissed a claim for psychiatric injury suffered by the claimant during a protracted disciplinary process. The claimant alleged a large number of breaches of his employer’s duty to take reasonable care to protect his health and a breach of the implied term of trust and confidence. The judge applied the guidance in Eastwood v Magnox [2003] 1 AC 403 and Hatton v Sunderland [2003] 1 AC 503. He dismissed all of the allegations bar one. He found that a lie told by the defendant to the claimant about the reason for a change in the composition of an appeal panel was sufficiently serious to amount to a breach of the implied term of trust and confidence. However, this single breach had not caused or made a material contribution to the Claimant’s injury. Andrew Warnock and Rebecca Grant acted for the Defendant.  

Part 36 and interest on future losses

A claimant beats his Part 36 offer and gets substantial damages for future losses. Under CPR 36.14(3)(a) he's entitled to "interest on the whole or part of any sum of money (exlcuding interest) awarded at a rate not exceeding 10% above base rate for some or all of the period starting with the date on which the relevant period expired" (emphasis added). Does any sum of money include future losses? No, according to the Court of Appeal in Pankhurst v MIB [2010] EWCA Civ 1445. 

Risk versus Social Benefit - Barnes v Scout Association

Barnes v Scout Association [2010] EWCA Civ 1476     Mark Barnes was a strapping 13 year old. He played rugby for his county. In Ward LJ’s words “he was the least likely boy to need wrapping in cotton wool”. But Mark was injured whilst playing a game called “Objects in the Dark” with his local Scout troop. This was rather like musical chairs. Instead of the music stopping, the lights would be turned out and everyone had to run into the centre of the room and grab a block. The Scout troop had played this game for many years and continued to play it after the accident.   The Defendant contended that there was a real social value in Scouts playing games like this. Whilst there were risks associated with the game, these should be balanced against the social good. The Scouts contended (again in Ward LJ's words) that to award compensation would be an example of an overprotective nanny state robbing youth of fun simply because there was some risk involved in the exercise.   The Claimant succeeded at first instance, and the Scout Association appealed.   The Court of Appeal, by a majority, upheld the judge’s decision. The majority view was that the social utility of Scouting would clearly not make all activities permissible, no matter how dangerous. The additional danger of playing this game in the dark was not warranted by its social utility. The judge had been correct in his balance of the factors in this case.   But Jackson LJ disagreed, in a very strong dissenting judgment. Noting that playing in the dark increased the risks, he continued that this did not outweigh the social benefits of the activity. Children and teenagers have always played such games. This was structured and properly supervised. It was much safer than many games which children might play, if left to their own devices. Jackson LJ considered it was the sort of activity which attracts young people to join or remain in the scouts.   Although judgment for the Claimant was upheld, Jackson LJ’s dissent is a powerful one. Defendants can take some solace from this analysis which provides a useful point of reference for other organisations facing claims following accidents during games or socially useful activities. For claimants and defendants this is a very useful example of the "public benefit" principle set out in Tomlinson v Congleton Borough Council (2004) 1 AC 46.

(Attempted) Murder on the Dancefloor

Everett & Another v Comojo UK Ltd t/a the Metropolitan & Others: Liability of nightclub for assault   Judgment was handed down in the Court of Appeal on 18 January 2011 in the above case.  The case concerned an assault in a upmarket private members nightclub.  A waitress working in the club was allegedly assaulted by two patrons.  Another patron, and regular guest of the club, was aggrieved on behalf of the waitresses  and (as one does) sent for his driver who, on arrival, attacked the men in question with a large knife and very nearly killed both of them.  The driver was sentenced to life imprisonment for the assaults and the badly injured men sued the nightclub for failing to prevent the assault.  The key question was whether or not the nightclub owed any duty in relation to the acts of a third party and, if so, whether the club was in breach of that duty on the particular facts.    LJ Janet Smith in her leading judgment in the Court of Appeal decided that the nightclub did owe a duty in relation to the acts of third parties but that, whilst it had a duty to take reasonable care, on the facts of this case there was no breach of duty as there was little the nightclub could do in the circumstances and it was not foreseeable that there would be an assault in an upmarket nightclub such as this one.  This judgment is worrying for nightclubs and hotels as it means that, depending on the nature of the establishment, there may be cases in the future where such establishments will be held liable for the acts of third parties on their premises.  While the standard to be applied is realistic there is still undoubtedly a duty owed by clubs and hotels and they will have to decide how they need to behave in order to respect that duty.      

No jury trial for personal injuries caused by police

According to the authors of both Clerk and Lindsell on Torts and Halsbury’s Laws of England, the tort of false imprisonment is committed whenever a person is unlawfully subjected to a total restraint of movement, no matter how short the period of restraint. Does that mean that if a claimant is restrained during the period of an assault, he can claim for damages for false imprisonment (and so have his claim decided by a jury) as well as for the injuries themselves?   No, held Master Fontaine in the case of Bowden v Chief Constable of Hampshire Constabulary (unreported: QBD, 9th December 2010). In Bowden the facts as the Claimant alleged them to be were that he was assaulted by police officers who set their dog on him and then hit him with batons. The allegation was that the dog had wrestled the Claimant to the ground and that it had prevented his escape by biting him for three minutes until the officers eventually called it off. The Claimant argued that the three minutes during which he was restrained on the ground by the dog amounted to false imprisonment as well as assault, and that he was entitled to have his claim for damages decided by a jury.   Master Fontaine granted summary judgment to the Defendant on the allegation of false imprisonment. She noted that the statements made in the text books (that any period of unlawful restraint is false imprisonment) were not supported by any reported cases anywhere in the UK or Commonwealth. There had been no manifestation by the police of any intention to arrest or detain the claimant and so if he was detained at all, it was as a consequence of an assault and did not amount to the tort of false imprisonment.

Uninsured Drivers & Accidents Abroad : Damages & Applicable Law

Jacobs v MIB [2010] EWCA Civ 1208   The appellant, (J) was a resident of the United Kingdom; he was injured when he was struck by a car driven by an uninsured driver in Spain. J appealed against a decision that the respondent Motor Insurers' Bureau (M) was obliged to pay him compensation in accordance with Spanish law.   J sought to recover compensation from M under the Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003, but M argued that the amount of compensation payable was to be assessed in accordance with Spanish law.   In proceedings brought to determine whether M was obliged to compensate J, the judge concluded that reg.13(2)(b) required the claim to be determined in accordance with English law. However, he held that the Regulation was inconsistent with the provisions of Regulation 864/2007 art.4(1), and that compensation was therefore to be assessed in accordance with Spanish law, being the law of the place where the accident occurred.   The court was required to determine whether M was obliged to pay compensation to J assessed in accordance with Spanish law or English law. HELD: Directive 2000/26, which established the compensation scheme, did not state whether questions of liability and compensation were to be determined by reference to the law of the country in which the accident occurred (see §21 of judgment). The 2003 Regulations were also silent on that point (§22). Regulation 12(4)(a) obliged M to indemnify an injured person who lived in England if he could satisfy it that the insured driver was liable to him. Since the accident had to have taken place abroad, the need to demonstrate liability on the part of the driver required the court to consider what law governed the issue. In most cases art.4(1) of the 2007 Regulation would apply and the issue would be determined by reference to the law of the country in which the accident had occurred.   However, it was less easy to identify the law governing the assessment of damages because of the reference in reg.12(4)(b) to the laws applying in England. References in legislation to the law of a particular country usually referred to its general rules of law rather than its rules relating to the conflicts of law, and the inclusion of the reference in reg.12(4)(b) obliged M to pay compensation assessed in accordance with English law (§24-25, 27, 29). Regulation 13 said nothing about how compensation was to be assessed; the answer lay in the words "shall compensate the injured party in accordance with the provisions of Article 1 of the [Second Directive]".   Directive 84/5 art.1(4) obliged Member States to set up a body to provide compensation for personal injuries caused by uninsured drivers: it was implicit in the scheme that the victim had to establish that the driver was liable, but whether that required proof of fault depended on the law of the country in which the accident occurred. It followed that the obligation imposed on M by reg.13(2)(b) carried with it the implicit proviso that the injured party had to show that the driver was liable as determined by reference to the applicable law identified in accordance with the appropriate conflict of laws rules, usually leading to the application of the law of the country in which the accident occurred (§31-32).   However, different systems of law could govern different questions raised by the same claim, and under English conflict of laws rules the assessment of damages gave rise to a separate issue (§33), Macmillan Inc v Bishopsgate Investment Trust Plc (No3) (1996) 1 WLR 387 CA (Civ Div) applied. The mechanism by which M's obligation to compensate under reg.13 was established was to treat the accident as having occurred in Great Britain. In the absence of any provision limiting its scope, it was difficult to see why it should not also affect the principles governing the assessment of damages, particularly in the absence at the time of complete harmonisation throughout the EEA of the conflicts of laws rules governing that issue (§35). Having regard to the language of reg.13(2)(b), compensation was to be assessed on the basis that the accident occurred in Great Britain. That conclusion had the incidental merit of ensuring that the measure of compensation recoverable under reg.13 was likely to be broadly the same as that recoverable under reg.12 (§37).  

Limitation Periods and Abuse of Process

The Court of Appeal has recently attempted to bring some clarity to this area of the law which had become extremely complex.   The Historical Perspective The House of Lords in Horton -v- Sadler (2006) UKHL 27, overturned Walkley -v- Precision Forgings Ltd (1979) 1 W.L.R. 606, and held that s.33 of the Limitation Act 1980 gave a wide and unfettered discretion in relation to the second action to disapply the time limit of three years contained in s.11 of the Act, having regard to the degree to which the parties would be prejudiced and taking into account all circumstances. In Janov v Morris (1981) 1 W.L.R. 1389, the court found that delay in prosecuting an action could amount to an abuse where the default was "intentional and contumelious" or the delay had been "inordinate and inexcusable". This was not followed in Gardner v Southwark London Borough Council (No.2) (1996) 1 W.L.R. 561 (CA), which held: "...a plaintiff who for reasons of negligence, dilatoriness, lethargy or mistake fails to apply for a hearing date before the guillotine date and so suffers the consequences of Ord. 17, r. 11(9), cannot be treated as if he were guilty of wilful or contumacious disobedience" (my emphasis). In Arbuthnot Latham Bank Ltd v Trafalgar Holdings Ltd (1998) 1 W.L.R. 1426 (CA), Lord Woolf held a "wholesale disregard of the rules is an abuse of process...". This found favour with Chadwick LJ in Securum Finance Ltd v Ashton (2001) Ch. 291 (CA), who held: "whether the claimant's wish to have a 'second bite of the cherry' outweighs the need to allot its own limited resources to other cases. The courts should now follow the guidance given by this court in the Arbuthnot Latham case. " Aldi Stores Ltd -v- WSP Group Plc (2007) EWCA Civ 1260; and Stuart -v- Goldberg Linde (2008) EWCA Civ 2 held that, although the decision whether to strike out a claim on the ground of abuse is ultimately a matter for the court's discretion, the finding of abuse was a judgment which was either right or wrong, albeit it involved an assessment of a large number of factors and might for that reason be hard for an appellate court to dislodge. The CPR introduced a stricter regime for compliance with court orders. May LJ in Vinos -v- Marks & Spencer Plc (2001) 3 All E.R. 784 (CA) and Godwin -v- Swindon BC (2001) EWCA 1478  held that there is nothing unjust in a system of limitation and parties who do not issue in time risk having their cases struck out.   The Present Case In Aktas -v- Adepta; Dixie -v- British Polythene Industries Plc [2010] EWCA Civ. 1170 (22/10/2010) the Court of Appeal (Rix LJ, Longmore LJ, Aikens LJ) specifically considered the question of when a failure to serve proceedings within the limitation period could by itself amount to an abuse of process. The court could find nothing to suggest that failure to serve in time is tantamount to abuse, nor in various other cases put forward by the defendants. Rix LJ, held that, even in this post-Horton era, the abuse of process point could succeed. He held: ·         A mere negligent failure to serve a claim form in time was not an abuse of process; it had never been held to be in any of the many cases cited to the court, nor in Rix LJ’s judgment should it be described as such, nor as being tantamount to such; ·         All the cases made clear that for a matter to be an abuse of process, something more than a single negligent oversight in timely service was required; the various expressions used are: inordinate and inexcusable delay / intentional and contumelious default /  wholesale disregard of the rules; ·         Abuse could not be assumed for failure to comply simply because the rules of service are strict; ·         Nor was misuse of court resources enough to turn such behaviour into an abuse; ·         Lateness in service in breach of the rules did not by itself amount to an abuse of process; ·         On the facts of the instant case, the breach did not prevent the court from exercising its s.33 discretion to allow the action to proceed.