Download Liability Brief - September 2012 (PDF, 63KB) - Kennedys

17 September 2012
Liability Brief
Welcome to the September edition of Liability Brief.
The Association of British Insurers has confirmed that it is to challenge the ruling of
the Court of Appeal in Simmons v Castle. The Court took the opportunity in July to
confirm a 10 per cent increase in general damages will apply in most civil cases
where judgment is given after 1 April 2013 - whether or not a conditional fee
agreement is in place and irrespective of when the agreement was signed. Despite
the Court’s reassurance that its decision would provide “simplicity and clarity”, it
is apparent that the effect of the decision is by no means clear and raises further
issues.
The pre-trial hearing of the ABI’s challenge is due to take place on 25 September,
which we will be monitoring closely.
Chris Grayling, a former BBC News producer, was appointed as the Secretary of
State for Justice following a ministerial reshuffle on 4 September 2012. It will now
be his job to implement the reforms brought about by the LASPO Act 2012.
The MoJ has confirmed that the promised consultation on whiplash remains on its
agenda. Helen Grant, one of two MPs along with Jeremy Wright to join the MoJ in
the reshuffle, is expected to assume responsibility for issues surrounding civil court
and civil cost reforms, including whiplash (previously handled by former minister
Djanogly). The government has indicated it has not yet decided to push ahead with
proposals to increase the small claims limit for personal injury claims.
Prior to his departure from government, Djanogly confirmed the MoJ still intends to
issue a second consultation in the autumn into setting the discount rate for
personal injury damages. The second consultation will review the legal basis for
the setting of the discount rate and, in particular, seek views on whether the
factors that can be taken into account in prescribing a rate are still appropriate.
The MoJ is expected to announce in the next few weeks the findings of its
evidence-gathering exercise on the proposed extension of the portal process to
road traffic cases worth up to £25,000 and to employers’ and public liability, by
April 2013. The indication comes when concerns continue to be raised about the
stability of the Portal.
A Solicitors Regulation Authority (SRA) report sets out its analysis of the responses
to its discussion paper on the forthcoming ban on referral fees in personal injury
cases, which comes into force in April 2013. The SRA reports that generally, the
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discussion paper and the options discussed received positive feedback from
respondents. The SRA will seek approval from the Legal Services Board for changes
to its regulatory framework, prior to implementation, in early 2013.
I hope that you enjoy this edition and welcome any feedback for future editions.
Mark Burton,
Partner
Case reviews
Duty of care: game at sporting event
Court confirms that risk assessments cannot foresee all risks; social value of an
activity has to be considered when deciding whether to allow an activity to
continue - Cornish Glennroy Blair-Ford v CRS Adventures Limited [13.08.12].
Comment
This is another common sense decision where the Compensation Act 2006 has
assisted a judge to find that tragic accidents can happen without fault. Section 1 of
the Act is headed ‘Deterrent effect of potential liability’ and applies in relation to
the management of activities of social value or, in the words of the Act, “desirable
activity”.
The intention of that provision is not to deter organisers of socially orientated
activities by an overly rigid application of the health and safety regime applicable
elsewhere. However, it should not be anticipated that similar latitude (exercised in
this case in relation to risk assessment of a modified method of ‘welly wanging’)
will be applied to liability assessment of work-place accidents. On the contrary, a
strict application of the law on matters such as risk assessments will continue to be
enforced by the courts and where only on the most exceptional facts will an
accident be held to be without fault.
Background
The Claimant, a college teacher, participated in a one week adventure course at
the Defendant’s country park. On the last day of the trip, the Claimant took part in
a mini-Olympics activity of “welly-wanging”. This activity involved throwing a
wellington boot as far as possible. During the event, the teachers were asked to
throw the wellington boot between their legs so as not to put the children at a
disadvantage. The Claimant threw the wellington boot with such force that he lost
balance and landed on his head, suffering as a consequence a catastrophic spinal
injury.
A risk assessment had been carried out before the event but the Claimant alleged
that the injury was a foreseeable consequence of the revised method of throwing
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and the Defendant had breached its duty of care by failing to carry out a formal
risk assessment on that method.
Held
Mr Justice Globe was satisfied that the Defendant operated a professionally run
enterprise that provided immense social value. Globe J recognised the wellestablished
principle that the social value of an activity is a relevant consideration,
as confirmed in the case of The Scout Association v Barnes (2010) (a case in which
Kennedys acted) - http://www.kennedys-law.com/casereview/scoutmeeting/]
Globe J accepted that the mini-Olympics (and the activities within it) did not carry
inherent danger that created licensing requirements. Nevertheless, the risk
assessment documentation produced by the Defendant would have accorded with
any such requirement(s).
Globe J held that a formal risk assessment of the mini-Olympics event as a whole
was satisfactory. The Defendant could not be criticised for not carrying out a
formal risk assessment of the method for handicapping the teachers before the
welly-wanging activity began. Globe J observed that formal risk assessments can,
in any event, be a less effective tool where a lot of variables exist (as with the
welly-wanging activity).
The manner in which the Claimant sustained injury could not have been foreseen –
there was no foreseeable real risk. Further, the risk which needed to be foreseen
by the Defendant was the risk of serious injury and not just the risk of any injury.
As such no steps were needed to have been taken to guard against it. The injury
resulted from a tragic and freak accident for which no one was to blame.
Related outdoor pursuits cases
• See our case review on Harrison v Jagged Globe [2012] -
http://www.kennedys-law.com/vicariousliabilityunauthorisedactivity/
• See our case on Shaw v Fuller School [2012] http://www.kennedyslaw.com/casereview/schooltrainingexpedition/
• See our case on Barnes v The Scout Association [2010]
http://www.kennedys-law.com/casereview/scoutmeeting/
For more information please contact Tim Wilson on +44 20 7667 9331 or email
t.wilson@kennedys-law.com.
Reclaiming compensation: proportionate recovery
Court of Appeal confirms that insurers cannot reclaim compensation paid to an
injured insured passenger who permitted non-insured driver to drive; s.151(8)
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of the Road Traffic Act 1988 contravenes Community law – Churchill Insurance
Company Ltd v Fitzgerald & Wilkinson; Evans v Cockayne & Equity Claims Ltd
[24.08.12].
Comment
This decision confirms that where an insurer is liable to pay compensation in
respect of a liability of an uninsured person, its entitlement to recovery under
s.151(8) of the Road Traffic Act 1988 (RTA) now contains an exception. Where
recovery is sought from a person who is the insured and who is entitled to
compensation, “any recovery by the insurer must be proportionate and determined
on the basis of the circumstances of the case”.
However, the extent to which compensation can be reduced remains unanswered,
which is arguably unfortunate.
Background
In Wilkinson, the insured named driver allowed Mr Fitzgerald to drive the car. Mr
Fitzgerald lost control of the car and collided with another vehicle, causing Mr
Wilkinson to suffer severe injuries. The insurer accepted that, by virtue of s.151(5)
Road Traffic Act 1988 (RTA), it had to compensate Mr Wilkinson as the passenger.
However, it argued that under s.151(8) RTA, it could reclaim the compensation on
the basis that Mr Wilkinson had caused or permitted the use of the vehicle. At first
instance, Mr Justice Blair found that s.151(8) RTA was in breach of Community law
and the insurers were not allowed to reclaim the compensation.
The facts of Evans were essentially the same. Ms Evans allowed Mr Cockayne to
drive the motorcycle as an uninsured driver whilst she travelled as a pillion
passenger. He drove into the back of a lorry and Ms Evans sustained serious
injuries. However, at first instance, the court found that the insurers were allowed
to reclaim the compensation under s.151(8) RTA.
The Court of Appeal referred the matter to the Court of Justice of the European
Union (CJEU) for a preliminary hearing on two key questions:
1. If s.151(8) is construed so as to exclude an injured insured person from
compensation when travelling as a passenger, when he has permitted an
uninsured driver to drive the car, would Community law hold such an
exclusion void and unenforceable?
2. If so, can s.151(8) be interpreted in such a way as not to breach Community
law?
The CJEU found that Community law must be interpreted as precluding national
rules whose effect is to omit automatically the requirement that the insurer should
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compensate an insured passenger who is injured as a result of giving permission to
an uninsured driver. It was irrelevant that the insured driver knew that the driver
was uninsured, believed him to be insured or did not consider the question.
With regard to the second question, the CJEU said “it is only in exceptional cases
that the amount of compensation may be limited [by national rules]”.
Held
The Court of Appeal accepted that when the insured is the injured passenger, the
effect of s.151 (8) is to limit the extent of insurance cover and as such, has to be
consistent with Community law.
The Court held that s.151(8) demands two pre-conditions be fulfilled before the
insurer has the right to claim a civil indemnity from the insured. It has to be shown
the insured “caused or permitted the use of the vehicle” and that the use “gave
rise to the liability”. Accepting that further conditions could be added to allow the
insurer to exercise the s.151(8) right, the Court accepted that any limit to the right
to compensation could only exist in exceptional circumstances and had to be
proportionate.
See our article on reclaiming compensation paid to passenger -
http://www.kennedys-law.com/casereview/reclaimingpassengercompensation/
For more information please contact Kathy Dwyer on +44 1622 625 649 or email
k.dwyer@kennedys-law.com.
Duty to provide adequate supervision: injury at school
A local authority was not liable for injury sustained by a pupil when he was hit
by a golf club during a lesson; adequate supervision provided; the teacher could
not have been expected to see every action of a group of pupils at all times -
Hammersley-Gonsalves v Redcar & Cleveland Borough Council [13.07.12].
Comment
This case is a reassuring decision for local authorities and activity providers across
England and Wales.
Refreshingly the Court of Appeal was not swayed by the potentially emotive
concerns of a 12 year old boy being hit in the face with a golf club. Rather, it
placed great weight on the particular circumstances (age of pupils, previous similar
instances, pupils behaviour generally etc) and the steps taken by the school to
ensure the activity was carried out in a safe manner. The causation point raised by
Lord Justice Rimer was far more straightforward: put simply, there was no
evidence adduced that any further action by the supervising teacher would have
prevented the accident.
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I have discussed the case with a number of local authority clients and comfort is
taken from the Court’s common sense application of duty, breach and causation to
the specific circumstances surrounding the incident. The judgment is a useful
reminder to defendants to consider two things:
1. What further steps could reasonably have been taken,
2. What difference (if any) such steps would have made to positively
preventing the accident?
Background
During a school golf lesson, the 12 year old Claimant suffered a facial injury when a
golf club was swung by another pupil. The group of 22 male pupils – all aged
between 11 and 12 years - were being supervised by one teacher, Mr Fowle.
The court at first instance found that Mr Fowle did not adequately supervise the
pupils as he could not and did not see what his pupils were doing at the time.
The Defendant appealed.
Decision
With Lord Justice Pill delivering the leading judgment, the appeal was upheld. The
Court of Appeal held that the Defendant’s system of supervision was adequate in
the circumstances. It found that, although the teacher could not see all the actions
of all pupils at all times, this did not amount to negligent supervision. These pupils
had undertaken previous golf lessons over the preceding six weeks and were well
behaved generally, including on this occasion. The action of the pupil who swung
his golf club, which hit the Claimant, was considered spontaneous and wholly
unexpected.
In relation to causation, the Court held that, on the balance of probabilities, no
action by Mr Fowle would have prevented the accident. Further, the Court added a
finding regarding the staffing ratio; finding that closer supervision of the group by
having extra teachers was not reasonably required in the circumstances.
For more information please contact Thom Lumley on +44 845 838 4886 or email
t.lumley@kennedys-law.com.
Landlord’s liability: slippery when wet
A landlord did not owe a duty of care to her tenant who was injured by slipping
on painted steps on her property; it was not unreasonable for a landlord to
paint concrete steps with outdoor paint - Drysdale v Hedges [27.07.12]
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Comment
In this case, the Court found that the landlord owed no duty of care under the
Occupiers Liability Act 1957 and the Defective Premises Act 1972 to her tenant.
This is a decision that should reassure landlords who have to defend claims where
accidents occur despite their best attempts to improve the property.
The case follows long established principles and it is worth remembering that as a
general rule, a landlord’s duty to repair kicks in once they have received notice of
the defect. That being said, it is important to remember that s. 4 of the Defective
Premises Act can apply if it was reasonable for the landlord to have known about
the defect (such as where the defect is obvious) even without having been notified
of the same.
Background
In October 2008, the Claimant slipped on the middle step leading up to the front
door of the premises she rented from the Defendant. As a result of the slip she fell
into the basement area of the house suffering serious back injuries. The Claimant
alleged the steps were unduly slippery as a result of being painted and wet. She
further alleged the Defendant had failed to provide a sufficiently high wall at the
side of the steps and/or a handrail to prevent someone from falling down to the
basement level.
The Claimant alleged these failures breached s.2 of the Occupiers Liability Act
1957 (1957 Act), s.4 of the Defective Premises Act 1972 (1972 Act) and/or the
tenancy agreement and common law.
Held
Mr Leighton Williams QC accepted that painting the steps had increased the risk of
slipping on the steps, particularly when the steps were wet. However, the Court
was satisfied the 1957 Act had no application - a landlord’s duty of care should
normally be confined to the 1972 Act. Accepting the Defendant was under an
obligation to maintain or repair premises “not in good repair”, the Court
considered that neither the stone steps nor the paint required repair. What was
required was the removal of the paint and “it is stretching the meaning of the word
“repair” to apply it to the removal of the paint.”
Accordingly, the presence of the paint did not breach the 1972 Act or the tenancy
agreement either. In which case, a landlord owes a common law duty to take
reasonable care not to create an unnecessary risk of injury. With regard to the
unguarded drop, the Court was satisfied the Defendant was not required to make
safe the wall besides the steps as the unguarded drop pre-existed the Defendant’s
purchase of the property. With regard to the painting of the steps, the Court held
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the Defendant had applied a paint that was on the face of it suitable for the job in
question and it was not unreasonable for her to have painted the steps.
For more information please contact Nicole Baygan on +44 121 214 8023 or email
n.baygan@kennedys-law.com.
Feature articles
Fifty shades of green
Berent v (1) Family Mosaic Housing (2) London Borough of Islington [03.07.12]
Robbins v London Borough of Bexley [16.08.12]
It is estimated that the value of recoveries by property insurers resulting in tree
root subsidence cases is well in excess of £100 million with the majority of the
monies recovered from local authorities, who are either self insured for the
majority of the claims or entirely. In light of the Comprehensive Spending Review
2012 (carried out by HM Treasury), cash strapped local authorities would be very
keen to reduce the size of recoveries by property insurers. Indeed, in most cases,
local authorities have abandoned their policy of preserving street trees in favour of
removal and replanting upon being presented with a potential claim for damage by
third party property insurers.
The cost of failing to remove a tree resulting in sub-structure repairs (usually
underpinning) can be ten times the cost of superstructure repairs.
Two recent court decisions have re-visited liability for breach of duty, which has
previously been a less contentious issue in light of strong decisions, which have
largely gone in favour of the property insurers.
Domestic insurers seeking a recovery would normally expect an admission of
liability from local authorities or commercial property insurers in circumstances
where they can demonstrate:
The third party tree was within the recognised zone of influence
The soil (usually London clay) was desiccated
Live tree roots have been recovered from trial pits
Monitoring establishes cyclical movement consistent with tree root activity
There is no evidence of what precise steps the tree owner took to prevent
or minimise the damage
There may be a debate about the extent of the damage and alternative
contributing factors, but essentially the points above have been the key
determining factors.
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The issue of breach of duty had largely been conceded in cases prior to the
determination of the case in Berent v Family Mosaic Housing: namely that the local
authority with trees within a zone of influence located in soil capable of becoming
desiccated, and therefore with capacity to damage third party property and who
took no or no adequate steps to prevent or minimise the property damage.
Salient facts: Berent v Family Mosaic Housing
1 The roots from two London plane trees allegedly caused damage to the
Claimant’s property in 2003/2004
2 Other potential causes of damage were considered, including a defective
drainage system and vibration damage from railway tunnelling work
3 The period of damage was reasonably short lived between September 2003
and Spring 2004
4. Notice was given to the Defendant Local Authority in 2009
5. The trees were removed in 2011
6. The expert evidence was that pruning would not have prevented the
damage
At first instance, the Court held that there was no proof that the Defendants could
have appreciated the real risk of damage. The Court of Appeal’s judgment focused
on liability for breach of duty and applied the well established test of: (i) to what
extent could the consequence be reasonably foreseen (ii) to what extent action
could be taken to eliminate the risk (iii) having consideration to the social
desirability of that activity.
The test has further been refined and put as “…the general principle [is] that a
person must be regarded as negligent if he does not take steps to eliminate a risk
which he knows or ought to know is a real risk and not a mere possibility which
would never influence the mind of a reasonable man” (the Wagon Mound (1967)).
Questions arising from that test are: how reasonable are these steps, how
expensive will they be, and within what time scale could the party be expected to
eliminate the risk, and how practicable are the steps necessary to eliminate the
risk?
The Decision
Arboricultural evidence from the Claimant was that the only remedy was to remove
the trees. The Defendant Local Authority had to balance its obligations pursuant to
the Town & County Planning Acts and the amenity value placed on trees. There had
been no evidence of historical damage caused by the offending trees. The Local
Authority had a prudent regime of tree management and there was no evidence
that it should have had a different regime. The Claimant’s expert’s opinion was
that all trees growing near the property would have to be removed and the Court
found this a less attractive argument. Further, the Claimant’s experts were not
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able to identify the neighbourhood where damaged caused a particular area or
“hotspot”.
On balance the Court of Appeal found the steps necessary to prevent the risk of
damage were disproportionate and contrary to the Local Authority’s obligations to
preserve the amenity value of trees.
Consequences of the decision
Liability for breach of duty will no longer be largely conceded by local authorities.
Provided they could demonstrate a reasonable tree maintenance policy backed by
arboricultural expertise, the policy was implemented, and provided they have no
reason to consider a particular tree or neighbourhood posed a higher than normal
risk then potentially the claims could be defended.
Insurers and local authorities do not have to wait long to test the application of
foreseeability following this decision. The High Court was at the same preparing to
hand down judgment in the case of Robbins v London Borough of Bexley (2012).
Salient facts: Robbins v London Borough of Bexley
1 Evidence of damage to the Claimant’s property in 2003 and 2006
2 The Defendant’s poplar trees had been severely reduced, in all
likelihood reducing the extent of movement to the Claimant’s property
in 2006
3 There was a large disagreement about whether the Defendant’s tree
was within a foreseeable zone of influence
4 Only one small root (less than 1mm in diameter) from the Defendant’s
tree had been recovered from trial pits. It was largely accepted by the
engineers that the property had been damaged by tree root activity
5 The Claimant’s arboricutural evidence was preferred on all the crucial
issues
The decision
The High Court held the Defendant Local Authority had not followed its own stated
tree root policy and was liable for the damage that did occur. The decision was
made in light of the evidence of earlier claims involving trees from Danson Park
causing damage to neighbourhood properties (up to a distance of 35 metres), and
the fact that the Court preferred the Claimant’s expert evidence that the roots
were within the acceptable zone of influence capable of causing damage, The
Local Authority had been aware of the potential risks of tree root damage to these
properties since 1998, as they had been aware of the earlier claims and in fact
settled some of them.
The judgment was reserved pending the appeal in Berent. Upon hearing
submissions, the High Court made it clear that there were no special principles of
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law involved in tree roots cases in relation to the issues that arise in nuisance and
negligence cases.
In Robbins, the High Court was satisfied the trees had posed a foreseeable risk
since 1998, and the Local Authority could have taken reasonable steps to eliminate
that risk.
Consequences
Local authorities are likely to be more reluctant to concede the issue of liability.
Insurers will need more evidence, which is likely to include:
Evidence of a reasonable tree management policy, its reasonableness and
proof of implementation
History of claims and actions taken
More use of expert witnesses especially arborculturist to comment on the
tree maintenance programmes, zones of influence and alternative remedial
action
The question of foreseeability between domestic householders, namely, whether a
domestic householder is in a different category in law from any other reasonably
prudent tree owner is currently being considered in the case of Khan v Kane and a
decision in this crucial case is awaited.
Fifty shades of green may have become fifty shades lighter.
Peer reviewed by Daniel Crowley, Barrister, 2 Temple Gardens
For more information please contact Andrew Caplan on +44 845 838 4805 or email
a.caplan@kennedys-law.com.
Five ways for claimants to avoid personal injury litigation – by a
defendant
I recently wrote about ways for defendants to avoid personal injury litigation. As a
follow up I thought it would be interesting to imagine that the ‘shoe was on the
other foot’ and to consider the same objective from the claimant’s perspective.
Here are my suggestions:
1. Treat litigation as a last resort
The three year limitation period gives sufficient time for most injuries to stabilise
sufficiently for a final prognosis or for even the most complicated earnings models
to be assessed. The pre-action protocol intends that litigation should be a last
resort and that claims should not be issued prematurely when a settlement is still
actively being explored. Where liability has been admitted, the claimant is
supposed to disclose all medical reports and contact the defendant for a final
"stocktake" at least 21 days before commencing proceedings. I have personally
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never been approached for a stocktake, yet it is a very attractive idea. Most
defendants would frankly much rather avoid the expense of unnecessary
proceedings and will be delighted by the opportunity for pre-litigation settlement
discussions.
2. Play fair with experts
The claimant has complete pre-litigation control over experts which can lead to
some brinkmanship. At the worst extreme, the claimant exploits this situation to
choose his favourite experts, collect reports behind the scenes, sit on them for a
while, and then eventually disclose everything in one go and sometimes very close
to limitation. The defendant will rarely accept these without question and the
usual reaction is to ask for a second opinion from their own expert(s). The case
then becomes entrenched whilst the defendant works to unpick the one sided
reports. As an alternative, if the claimant is open about the expert road-map and
circulates timely reports, the defendant is likely to be much less sceptical about
whether the evidence is truly representative.
3. Share information
The psychology of a claim is that the claimant who keeps the defendant updated
and volunteers a schedule of loss and medical reports comes across as more
genuine than the claimant who is slow to produce documents, sits on reports for
months, and belatedly serves an inflated schedule. Progressive claimant solicitors
will trade information to advance their client's interests.
4. Do not over-claim
The system is at its most adversarial when the claimant over pleads the case for
maximum negotiating room before conceding a realistic figure. We keep data that
shows we are currently settling serious injury claims for about 40 per cent of the
amount claimed, which means there is a 60 per cent mark-up. Unfortunately this
approach significantly prolongs claims because the defendant is forced to work to
bring the numbers back down to a fair and reasonable level, yet the claimant is
rarely punished because of the lack of clearer costs sanctions for exaggeration.
5. Make offers!
I handle a lot of claims where the claimant never makes any Part 36 offers and the
claim only settles through defendant offers or, eventually, a joint settlement
meeting. I have never completely understood the reluctance of claimants to make
offers, especially when they have the best information regarding the injury and
financial losses and are in the best position to value the claim. I hope that the civil
justice reforms will encourage more claimant offers – considering that they stand
to gain a further 10 per cent of damages (up to a cap of £75,000) for beating their
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own offers and that defendants may consider economic settlements because of the
QOCS shield.
Conclusions
Apart from cases where the claimant instructs solicitors close to expiry of the
limitation period and proceedings are unavoidable through lack of time, most other
cases should be capable of resolution without proceedings. The key ingredients are
that the claimant is reasonable about evidence, the defendant is reasonable about
interim payments when required, and both are prepared to engage with the other
and make realistic offers.
Read “10 ways for defendants to avoid personal injury litigation” in the August
Liability Brief: http://www.kennedyslaw.com/article/toptenwaystoavoidpersonalinjurylitigation/
For more information please contact Mark Burton on +44 20 7667 9356 or email
m.burton@kennedys-law.com.
Kennedys is a trading name of Kennedys Law LLP. Kennedys Law LLP is a limited liability partnership
registered in England and Wales (with registered number OC353214).
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