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Looking ahead

March 2015

An update on forthcoming cases, consultations and key developments, including:

- New appeals and judgments to watch out for
- The government's response on reforming the Riot (Damages) Act
- Developments following the ECJ ruling in Vnuk
- The latest from MedCo and the Insurance Fraud Taskforce

Forthcoming cases

Supreme Court

Mesothelioma: insurance At the end of January, an increased panel of seven Justices of the Supreme Court reheard 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.

Costs: additional liabilities The costs challenge in Coventry v Lawrence returned before a seven-Justice Supreme Court panel 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 had adjourned the issue to allow the government to intervene. Judgment is awaited.

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. A hearing date is awaited. See DWF update on CA decision

Professional negligence In February the Privy Council heard the case of Maharaj and Ors v Johnson and Ors (Trinidad and Tobago) in which the issue is when time starts to run for limitation purposes when a professional gives negligence advice.

New Fatal claims: assessment of damages, multipliers The Supreme Court has granted permission to appeal in Knauer v Ministry of Justice. Ian Knauer’s wife died from mesothelioma and the issue concerns the date from which the multiplier for future losses is assessed i.e. whether they should be calculated from death, or from trial/settlement.

Other Supreme Court cases: hearing details are awaited in the following cases where permission to appeal has been granted in recent months

  • The Mayor's Office for Policing and Crime v Mitsui Sumitomo Insurance Co (Europe) Ltd & Ors arising from the 2011 riots.
  • Thevarajah v Riordan & Ors on relief from sanctions
  • Cox v Ministry of Justice on vicarious liability

Court of Appeal

New Costs: budgeting Later this year the Court of Appeal will hear Redfern v Corby Borough Council on costs budgeting and in particular the court’s consideration of incurred costs. See DWF update on HC decision

Procedure: second actions and abuse of process Last month Hardwicke Chambersreported that the Court of Appeal had granted permission to appeal in Padley v CDI Anderselite Ltd. In granting permission Sharpe LJ said “…in my view the appeal raises an important point that merits consideration by the Court of Appeal, as to the correct approach post Mitchell and Denton to permitting a second action to proceed after an identical action has been struck out for failing to comply with an unless order, where no application for relief from sanctions in respect of that first action is made or pursued.” Read more in Hardwicke Chambers’ update. A hearing is awaited.

Personal injury quantum: Ogden The Court of Appeal will hear Billett v Ministry of Defence on 30 June. This case concerns the assessment of a claim for future loss of earnings using the Ogden Tables. See DWF update on HC decision  

Part 36: withdrawal of offer This month the Court of Appeal was due to 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. We understand that the hearing has been adjourned and has yet to be relisted.

Portal claims: direct offers The case of Gavin Edmondson v Haven Insurance will be heard by the Court of Appeal in a window between 23 March and 21 July. In August 2014 the High Court held that the insurer had not acted unlawfully when contacting claimants direct to make offers of settlement. 

Consultations

New Reform of the Riot (Damages) Act Last week the government responded to its consultation on proposed changes to the Riot (Damages) Act and published its draft Riot Compensation Bill. The key provisions in the Bill include:

- Basing the test for a riot solely on the riot definition contained in the Public Order Act 1986.
- Introducing a cap of £1 million on the amount that can be paid out in any single claim
- Including limited cover for motor vehicles
- Clarifying that consequential loss is not recoverable.

The publishing of a Draft Bill allows examination and amendments to be made more easily before its formal introduction to Parliament. Read more in the Home Office press release and the ABI’s comments on the Draft Bill.

Scotland: draft personal injury bills Last month we reported that MSPs had launched consultations on two draft bills. The proposed Damages Claims (EU Directive on Safety and Health at Work) (Scotland) Bill looks to repeal s.69 of the Enterprise and Regulatory Reform Act. The consultation closes on 31 March. The proposed Recovery of Medical Costs for Asbestos Diseases (Scotland) Bill would enable NHS Scotland to recover the costs of care and treatment of victims of asbestos-related disease from compensators. The consultation closes on 30 March. Read more on the proposals in our update,

The following consultations are awaiting official responses:

Court fees increase The beginning of March saw the House of Lords approve the government’s plans to introduce enhanced issue fees. The statutory instrument was quickly signed off so that the new fees came into force on 9 March, sooner than anticipated and accompanied by a last minute scramble to have claims issued before the deadline. We now await further news following the Law Society’s pre-action protocol letter for judicial review. Read more in Simon Denyer’s recent update

In the meantime, the further consultation in relation to proposals to increase application fees closed on 27 February 2015 and the government’s response is awaited. This includes proposals to raise the fees for a general application in civil proceedings: to £100 for a consent application (from £50) and £255 for an application on notice (from £155). Read more.

Rehabilitation code: Following its call for views on the current Rehabilitation Code, the IUA-ABI Working Party announced late last year that it hopes to make available for consideration a draft of the revised Code in March 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

Pre-action protocols As part of its ongoing work on updating the pre-action protocols last year the CPRC 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.

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. In August 2014 it was revealed that a panel of experts was to be appointed to prepare a report giving expert investment advice to assist with the review. The panel was initially expected to be appointed by 22 September but the MoJ has recently confirmed to us that the appointment process has taken longer than envisaged. The MoJ is clearly having difficulties in making suitable appointments and this may, at least in part, be due to their limited budget. It remains to be seen when an appointment will be made but it seems there is now no chance of any report before the election, even if the panel start work before then. The original timescale was clearly too optimistic, and even when the report is eventually ready, the Secretary of State of the new government will need time to consider it, so there may now be no decision until 2016.

Also on the horizon...

New Motor insurance: implications of ECJ Vnuk ruling for UK legislation the Transport Select Committee has recently published a letter date-stamped 22 December 2014 from Transport Minister Robert Goodwill, explaining the government’s recent activity and proposed course of action following the Vnuk decision. The letter includes confirmation that the government will amend the Road Traffic Act as soon as Parliamentary time allows to comply with the judgment and that a consultation will be commenced as soon as possible. See letter from Robert Goodwill MP (pdf) and our recent article where we discussed the judgment’s implications.

In a flurry of activity last month three Bills we had been closely following received Royal Assent. At the time of writing there is no further information on when the various provisions will come into force:

Social Action, Responsibility and Heroism Act 2015 This Bill was brought forward 'to provide that where a person acts heroically, responsibly or for the benefit of others, this will be taken into account by the courts'. It has been notable for the criticism and ridicule it received throughout the legislative process. At the moment there is no information on when the Act will be brought into force. Read more on the significance of the Act in Simon Denyer’s recent update.

Criminal Justice and Courts Act 2015 We had 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. The Act 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. Again there is no information on when the Act will be brought into force although the section on fundamental dishonesty will not apply to proceedings issued before the section comes into force.

Insurance Act 2015: The Insurance Bill introduced to Parliament last July incorporated some, but not all of the proposals in the Law Commissions’ draft Insurance Contracts Bill and also made amendments to the Third Parties (Rights against Insurers) Act 2010, to enable it to be brought into force. Most of the Insurance Act is expected to be in force by autumn 2016 but the TP(RAI)A 2010 is expected to be in force by autumn 2015. Read more in our update The Insurance Act 2015 is here…or almost here 

Online Dispute Resolution Last April the Civil Justice Council set up an advisory group to explore the role that Online Dispute Resolution (ODR) can play in resolving civil disputes valued at less than £25,000. On Monday (16 February) the group published its report in which the principal recommendation is for a new three tier internet-based court service. Tier One should provide Online Evaluation to help users evaluate their problems and understand the options available to them. Tier Two should provide Online Facilitation in which trained facilitators working online can review papers and help users through a mix of ADR and advisory techniques. Tier Three should provide Online Judges who will decide suitable cases on an online basis. The report recommends a formal pilot of ODR as soon as is practicable involving an agreed selection of types of dispute, with a view to full rollout in 2017.  Read more on the CJC’s dedicated online hub

Update Whiplash reforms The MoJ has now announced that those looking for an expert from MedCo will receive a “search offer” (as the MoJ are calling it) which should include one high volume national MRO and six other MROs or, seven direct medical experts.

A search can be made for an MRO, or a direct expert, but not both. The search offer provides a claimant with a greater selection of experts than was available under the original pre-action protocol introduced as part of the Woolf reforms, over 15 years ago. So far, there has been no official announcement from either APIL or MASS to say that they are unhappy with it, so presumably it will be acceptable to the majority of claimant solicitors.

There has been no clarification yet on the number of medical experts to be offered for selection by the MRO, should a claimant choose that route. The MoJ’s intention is to review the decision once they have six months’ data from the MedCo portal, with a view to considering changes if appropriate. Now that the MoJ has announced how the search offer will work, the main focus will shift onto how the accreditation process will work. Read more in Nigel Teasdale’s recent update

Insurance fraud taskforce In December, Secretary of State for Justice Chris Grayling announced the creation of a taskforce, led by former Law Commissioner David Hertzell, to consider the issue of insurance claims fraud. The taskforce was set up in January, with the aim of producing an interim scoping by March 2015 and a final report by the end of 2015. February saw the Fraud Taskforce hold two meetings: the core group met on 5 February to further develop the main issues as they see them; and on 24 February a stakeholder roundtable was held, providing an opportunity for key figures in the industry to give their views about current fraud issues. The minutes from both can be found on the Taskforce’s dedicated web page

Update 18 March - Interim Report the Taskforce has now published its interim report which sets out the areas to be explored in more depth, and makes an initial recommendation for the ABI and BIBA to update industry guidance on the prevention of application fraud. The report also asks interested parties to submit answers to ‘questions for consideration’ by 13 May 2015. The questions involve issues such as: mapping the scale and impact of insurance fraud; assessing current industry and government initiatives; practices encouraging fraudulent claims; drivers of policyholder behaviour; fraud deterrents in the claims process; and the role of fraud data. The report is also on the dedicated web page  

Mesothelioma claims: government response to Justice Committee inquiry In December the Justice Select Committee published the government’s response to its July report. The government 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 funding reforms on mesothelioma claims will be carried out in due course. Read more in our update

Mesothelioma Payment Scheme: increased tariff last month Minister for Work and Pensions, Mark Harper announced the government’s decision to increase the Diffuse Mesothelioma Payment Scheme tariff from 80% of average civil claims to 100%, for those diagnosed on or after 10 February. The government say this could mean an increase of up to £54,000 per person. The Regulations making the changes will come into force on 31 March. 

New Mesothelioma (Amendment) Bill: last year Lord Alton introduced a Bill which sought to amend the (then) Mesothelioma Bill to raise funds to research the disease by way of a 1% levy upon insurers.  The Bill got no further than the first reading. On 10 March 2015, Labour minister Mike Kane introduced a new Mesothelioma (Amendment) Bill. Although we have not yet see the wording of the Bill, it would appear from its first reading that it seeks to achieve a similar outcome.  The second reading is due to take place on 27 March although the House is not expected to sit on this day, so it is unlikely to be debated on this date. You can follow the Bill’s progress here

Update 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 clause 71 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 had its Third Reading in the House of Lords on 4 March and after a short period of Ping Pong it has now completed its journey through Parliament. Royal assent is awaited. Follow the Bill’s progress here

Construction (Design and Management) Regulations 2015 CDM 2015 will come into force on 6 April 2015 with transitional provisions in place between 6 April and 6 October 2015 in certain circumstances for projects starting before 6 April 2015. Read more in DWF’s update The implications of the new CDM Regulations 2015 for Commercial Clients, Designers and Contractors

Review of Part 36 offers Following the CPRC’s comprehensive review of Part 36, the 78th update to the CPR contains the amendments which will come into force on 6 April 2015.  The changes aim to simplify the rules as far as possible and address the issues which have arisen in the caselaw over the years. As expected the amendments address Part 36 offers in split trials, sunset clauses, counterclaims and offers which make no real concession. Read new Part 36 in Schedule 1 to The Civil Procedure (Amendment No. 8) Rules 2014

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 decided not to permit ‘hybrid’ DBAs. The latest development was in December when the CJC published the membership of its working group on DBAs (pdf)

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 speech to the Professional Negligence Lawyers Association late last year 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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