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Looking ahead

December 2014

An update on forthcoming cases, consultation responses and key developments to look out for, including the latest on:

- New appeals and judgments to watch out for
- Whiplash reform - phase 2
- Social Action, Responsibility and Heroism Bill
- Justice Committee Mesothelioma inquiry
- Insurance Bill

Forthcoming cases

Mesothelioma: Recovery of Medical Costs Asbestos Diseases (Wales) Bill On 14/15 May the Supreme Court heard submissions on whether the National Assembly for Wales has the power to enact the Recovery of Medical Costs Asbestos Diseases (Wales) Bill, passed in November 2013. The Counsel General referred the Bill to the Supreme Court in December 2013 following argument from the insurance industry. The Supreme Court was due to hand down judgment on 3 December but this has been postponed for the Justices to consider further written statements from the parties.

Mesothelioma: insurance On 15/16 July the Supreme Court heard the case of International Energy Group v Zurich Insurance on whether, under an employers’ liability insurance policy, an insured is entitled to an indemnity from an insurer for the entirety of its outlay in respect of a claim brought against it for mesothelioma by an employee, or only a proportion of its outlay based on the period for which the insurer provided cover. Judgment is awaited.

Capacity: retainer It has been reported that the Court of Appeal has upheld the first instance decision in Blankley v Central Manchester and Manchester Children's University Hospitals NHS Trust that the intervening incapacity of a client does not terminate the retainer. The court’s written reasons are awaited.

Costs: additional liabilities The costs challenge in Coventry v Lawrence returns to the Supreme Court in February following Lord Neuberger’s comments in July that the respondents’ liability for costs under the recovery regime may be inconsistent with their right to a fair trial under Art. 6 ECHR. The Supreme Court adjourned the issue to allow the government to intervene.

Motor insurance: EU obligations The DfT is appealing the High Court’s decision from June in Delaney v The Secretary of State for Transport in which the claimant was awarded Francovich damages on the basis that the exclusion of the MIB's liability to passengers known as the "crime exception" was in breach of EU obligations. The hearing is due to take place on 10/11 February 2015.

Part 36: withdrawal of offer In March the Court of Appeal will hear Evans v Royal Wolverhampton NHS Foundation Trust in which the defendant attempted to withdraw a Part 36 offer within the 21 day period for acceptance and a without-notice order permitting the defendant to do so was set aside.

Employers’ liability: vicarious liability The Supreme Court will hear the case of Mohamud v WM Morrison Supermarkets Plc in 2015. The claimant was assaulted by a Morrison’s employee and was unsuccessful in his claim both at first instance and in the Court of Appeal. See DWF update on CA decision

Portal claims: direct offers The Gazette has reported that the case of Gavin Edmondson v Haven Insurance is going to the Court of Appeal. In August the High Court held that the insurer had not acted unlawfully when contacting claimants direct to make offers of settlement. Read more

Supreme Court: permission to appeal The Supreme Court has recently published its PTA applications for both October and November. Of note is Cox v Ministry of Justice another case involving vicarious liability where permission to appeal has been granted. Permission to appeal has also been granted in Thevarajah v Riordan & Ors which will be the second relief from sanctions case to go before the Supreme Court following this month’s judgment in Prince Abdulaziz v Apex Global Management Ltd & Anor. See Supreme Court PTA applications

Consultations

Whiplash reforms This month the government responded to its consultation on the second phase of the whiplash reforms providing more detail on the formation of MedCo Registration Solutions and some explanation of the process for requisitioning expert evidence. By 4 January 2015, experts and MROs are to register an expression of interest via the MedCo website www.medco.org.uk and registration will take place between January and April 2015. From 6 April only registered experts will be able to provide initial reports. It is still unclear how many experts or MROs will be returned by any one search request and there is still very little information about the accreditation process which will follow registration. The government also confirmed its intention to proceed with an obligatory initial claims search. The announcement was met with news that a number of claimant firms who own MROs will seek to challenge the government’s plans, which, they argue, restrict the claimant’s ability to instruct an expert of their own choosing. Following an earlier challenge to the first phase of the reforms, the MoJ last month amended the rules that were introduced in October, changing the definition of the word “associate”. Read Nigel Teasdale’s comments on the government’s consultation response and the CPR amendment

The following consultations are awaiting official responses:

Rehabilitation code Following its recent call for views on the current Rehabilitation Code, the IUA-ABI Working Party has announced that it hopes to make available for consideration a draft of the revised Code in March 2015 with a view to publishing the final version by the end of June. Read more in our update Draft Rehabilitation Code to be published in spring 2015

Reform of the Riot Damages Act In response to the August 2011 riots and subsequent report by Neil Kinghan in September 2013, the Home Office held a consultation on proposed changes to the Riot (Damages) Act. A new Bill would reform the existing 1886 Act, improving and modernising the way compensation is paid to individuals and businesses who experience losses or damage to property during riots. The main elements of the Bill include the placing of a cap on payments to very large businesses and their insurers and the establishment of a Riot Claims Bureau to handle claims. The consultation closed on 1 August and the ABI published its response voicing concern over the proposals and arguing that state support for riot victims needs to be maintained not curtailed. See ABI press release. The government’s response is awaited.

Pre-action protocols As part of its ongoing work on updating the pre-action protocols the CPRC has recently consulted on proposed changes to the pre-action protocols for personal injury, judicial review and debt claims. The Committee’s intention is for the revised protocols to come out as a group at the same time as a revised Pre-action Conduct Practice Direction.

Both discount rate consultations The first consultation on the methodology in setting the discount rate closed in October 2012 and the second, on the legal framework closed in May 2013. On 26 August it was revealed that the Secretary of State, Chris Grayling, had decided to appoint a panel of three experts to prepare a report giving expert investment advice to use within the discount rate review. The three experts are to be an expert in the financial management of investments including as to what investment advice and services are provided to claimants; an actuary who can deal with issues regarding the rate; and an academic who knows the workings of the financial services market including aspects relevant to the economic cycle. The panel was expected to be appointed by 22 September and then in the second half of October but there is still no news on the appointment.

Court fees increase In December 2013 the MoJ consulted on proposals to increase court fees. The aim of the proposed fee increases is to move to a position whereby the Court Service becomes self-funding. There were two parts to the consultation: 1) proposals to increase fees to reflect the actual cost of providing the service, 2) the proposed introduction of “enhanced fees” whereby parties in certain types of proceedings would be expected to contribute more than the cost of providing the service. The rationale behind this is that those who use the courts should make a greater contribution where they can afford to do so. The government has responded to the first part of the consultation and those fee increases have now been implemented. A response is awaited to the second part.

Health & Safety at Work Act 1974: self-employed workers Following recommendations made by Professor Löfstedt, the HSE is consulting on proposed amendments to section 3(2) HSWA1974 to exempt certain self-employed persons from health and safety law. The consultation closed on 31 August. Find out more about the consultation including the draft amendment. 

Also on the horizon...

Social Action, Responsibility and Heroism Bill June saw the introduction of this Bill which is designed to take further steps to level the playing field in favour of employers who have done all that is reasonable to protect employees, and to ensure that people who volunteer and carry out good deeds should not be put off by worries about risk and liability if something goes wrong. At every stage in the Commons there was opposition to the Bill. This carried over into the Lords where an unsuccessful attempt was made to deny it a second reading. In committee Lord Hunt tabled a surprise amendment aimed at substituting treatment for cash in low value cases. Lord Pannick also attempted to remove the need for the Bill by suggesting an amendment to the Compensation Act 2006. All of the amendments were rejected and the Bill goes through to the report stage on 15 December. In anticipation, Lord Faulks has tabled a small amendment to clause 4 on Heroism to remove the words “and without regard to the person’s own safety or other interests”.

Inquiry into mesothelioma claims and Asbestos Victims Support Group Forum judicial review On 8 December the government announced that it will not be ending the exemption in the application of LASPO provisions on recoverability to mesothelioma claims at this time. A further review of the likely effects of the no-win no-fee reforms on mesothelioma claims will be carried out in due course.  The Justice Select Committee will be publishing the government’s response to its July report on 11 December. The report will be published on the Justice Committee webpage

Diffuse Mesothelioma Payment Scheme (Levy) Regulations published These Regulations came into force on 28 November and on the same day the government announced that the estimated levy for Year 1 would be £32 million. Read more in our update

Criminal Justice and Courts Bill: fundamental dishonesty in personal injury claims and ban on inducements We have been following the progress of the clause which introduces a range of provisions where a claim for personal injury is found to be fundamentally dishonest, including dismissal of the whole claim. At the House of Lords report stage the clause was debated and survived unscathed despite attempts to water down its effects. The Bill has now returned to the Commons for consideration of the Lords’ amendments but so far this clause has received no further amendments. The Bill also contains new rules against inducements to make personal injury claims and in the Lords these were amended to cover inducements offered through third parties. Read more in our update Clause 56 retains its bite

Deregulation Bill: self-employed – motor insurance - HMRC records A few provisions in this Bill potentially have an impact on insurers. Clause 1 amends s.3 HSWA1974 to exempt the self-employed whose work activities pose no potential risk of harm to others from health and safety law (from Löfstedt). Clause 9 amends s.147 RTA 1988 so that delivery of the motor insurance certificate or security is no longer required for the policy or security to be legally effective and also removes the requirement for policyholders to return their certificate of insurance or security if a policy is cancelled mid-term. And the newly introduced clause 67 gives HMRC the power to disclose information in fatal claims without the need for a court order. This measure is designed in particular to improve the process of dealing with mesothelioma claims. Whilst waiting for this measure to go through Masters McLeod and Eastman have issued a practice note for the procedure to be used HMRC practice note (pdf). The Bill has reached the report stage in the House of Lords. We will continue to monitor progress of the Bill which you can also follow here

Insurance Bill: insurance contracts – Third Party (Rights against Insurers) Act 2010 The Insurance Bill was introduced to Parliament on 17 July. It incorporates some, but not all of the proposals in the Law Commissions’ draft Insurance Contracts Bill and also makes amendments to the Third Parties (Rights against Insurers) Act 2010, so that that Act can be brought into force. The Bill is currently being considered by the Special Public Bill Committee which has its own dedicated webpage. Read more on the Bill in this update from Jacquetta Castle 

Review of Part 36 offers The subcommittee of the Civil Procedure Rules Committee has completed its review of Part 36 including issues such as Part 36 offers in split trials, sunset clauses, counterclaims and offers which make no real concession.  The sub-committee’s recommendations are now being put before the full committee with a view to any rule changes being implemented in 2015.

Civil Justice Council (CJC) to look at Damages Based Agreements revisions The government has asked the CJC to take a detailed look at some technical revisions to the regulations for DBAs. Notably though, and to the Lord Dyson’s disappointment the government has decided not to permit ‘hybrid’ DBAs. Read more

Guideline hourly rates In July the Master of the Rolls announced his decision following the review of the guideline hourly rates and the main headline was that no changes to the actual rates themselves should be made at this time, because of fundamental shortcomings in the available evidence. The issue has been returned to the MoJ for further thought but it is difficult to know how they will take it forward given the imminent General Election. In a recent speech to the Professional Negligence Lawyers' Association Mr Justice Foskett indicated that a meeting was held in mid-October between the Master of the Rolls and representatives of the MoJ and the Law Society. The outcome of further consideration of the position is awaited.  Read the speech here

Contact

For further information please contact Alex Fusco, Professional Support Lawyer on 0161 603 5211.

By Alex Fusco

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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