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Looking ahead

April 2015

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

- New appeals and judgments to watch out for
- Law Commission consultation on Insurable Interest
- Scottish Fatal Accident Inquiries Bill
- Commencement of recent legislation
- 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 last 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.

Update Employers’ liability: vicarious liability The Supreme Court will hear Mohamud v WM Morrison Supermarkets Plc and Cox v Ministry of Justice in October.  In Mohamud 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). In Cox the MoJ was held liable for the actions of a prisoner employed as kitchen worker who injured the claimant catering manager.

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.

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
- Knauer v Ministry of Justice on the quantification of future losses in a fatal claim

Court of Appeal

Update Costs: budgeting The Court of Appeal was due to hear Redfern v Corby Borough Council later this year, on costs budgeting and in particular the court’s consideration of incurred costs. However at the end of March Litigation Futures reported that the case had been successfully mediated. See DWF update on HC decision

Procedure: second actions and abuse of process A hearing is awaited in Padley v CDI Anderselite Ltd. The case concerns 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.

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 In Evans v Royal Wolverhampton NHS Foundation Trust 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.The adjourned hearing is due to take place in December.

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. 

New Abuse: vicarious liability An appeal and cross appeal will be heard in July in NA v Nottinghamshire County Council. The case concerns vicarious liability and non-delegable duties in relation to abuse. Read more in Andrea Ward's update on HC decision  

Consultations

New Insurance Contract Law Reform: insurable interest The Law Commission and the Scottish Law Commission are revisiting the issue of Insurable Interest, having previously made proposals for reform in 2008 and 2011. They have been asked to return to the issue due to the increased numbers of requests to write policies which include cover for children, cohabitants and to insure ‘key employees’ for substantial amounts. They are seeking views on their updated proposals for indemnity and life insurance, published in a new issues paper. Responses are due by 29 June 2015.

Update Scotland: draft personal injury bills Two consultations launched by MSPs are in progress. The proposed Damages Claims (EU Directive on Safety and Health at Work) (Scotland) Bill would repeal s.69 of the Enterprise and Regulatory Reform Act 2013. The closing date for the consultation has been extended to 24 April. 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. DWF responded to the consultation which closed on 30 March and you can read comments on the proposed Bill from Caroline Coyle and Derek Adamson in Scottish Legal News

The following consultations are awaiting official responses:

Update Court fees increase: government response on enhanced fees The beginning of March saw the new increased fees come into force and over the last month we have been waiting for further news on the Law Society’s intention to launch a judicial review.  Last week the Law Society announced it was not pursuing the judicial review but that it would continue to monitor the effect of the increases on access to justice. Read more in the Law Society's 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

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 recently confirmed to us that the process has taken longer than envisaged, and as yet there has been no official word on the appointments. The original timescale for the report 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.

Legislation

Update Deregulation Act 2015: self-employed – motor insurance - HMRC records The Bill received Royal Assent on 26 March. We had been following a few provisions with a potential impact on insurers:

  • Section 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). Although this section has come into force we await the Regulations setting out the prescribed list of activities where duties will still apply.

  • Section 9 and Schedule 3 amend the Road Traffic Act 1988 to remove the requirement for policyholders to return their motor insurance certificate to the issuer of that certificate if they cancel their policy mid-term. It is commenced on 30 June 2015 to allow the insurance industry sufficient time to make administrative changes to facilitate the change in legislation.

  • Section 85 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. It came into force on 26 March.

Social Action, Responsibility and Heroism Act 2015 The Act is now in force and applies to a claim that a person was negligent or in breach of statutory duty where the act or omission giving rise to the claim occurs on or after 13 April 2015. Read more on the significance of the Act in Simon Denyer’s update. 

Criminal Justice and Courts Act 2015 The Act is now in force. Section 57 on fundamental dishonesty applies to claims issued on or after 13 April 2015. The Act also contains new rules against inducements to make personal injury claims and these also came into force on 13 April. Read more about the ban on inducements in Simon Denyer's update

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 

Construction (Design and Management) Regulations 2015 CDM 2015 came 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 our update this month CDM changes - Professional Indemnity issues

Reform of the Riot Damages Act Last month 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.

Motor insurance: implications of ECJ Vnuk ruling for UK legislation last month the Transport Select Committee published a letter from Transport Minister Robert Goodwill dated December, explaining the government’s recent activity and proposed course of action following the Vnuk decision. The letter includes confirmation that as soon as Parliamentary time allows the government will amend the Road Traffic Act 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.

New Scotland: Fatal Accident Inquiry Bill The Inquiries into Fatal Accidents and Sudden Deaths etc. (Scotland) Bill was published on 20 March 2015 and is set to strengthen the current Fatal Accident Inquiry (FAI) process in Scotland. The Bill seeks to implement the remaining recommendations put forward by Lord Cullen following his Review of Fatal Accident Inquiry Legislation in 2009. You can find the Bill documents here  and read more in our update this month

Update Mesothelioma (Amendment) Bill:  last year Lord Alton introduced a Bill seeking 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 which appeared to have the same aim. This Bill will also go no further, now that Parliament has been dissolved.

Also on the horizon...

Update Whiplash reforms: MedCo goes live From 6 April it became mandatory for any new CNFs notified to the RTA Portal to proceed with a medical report commissioned via MedCo. As we mentioned last month, searches carried out on the MedCo portal will lead to an offer of seven direct medical experts, or a choice of one Tier 1 MRO and six Tier 2 MROs. All direct experts and MROs will be required to be accredited by 1 January 2016. Designing the accreditation process is a task for the MedCo board itself and so should not be hindered by the general election.

It also worth remembering that an obligatory previous claims search will need to be carried out for new claims submitted to the portal from 1 June.

Another judicial review claim has also been launched, this time by an MRO, unhappy with the notion of different tiers of MRO. They argue that the ‘search offer’ prevents competition as the number of instructions they will receive as a Tier 1 MRO is inversely proportionate to the total number of Tier 1 MROs registered with MedCo. So for example if there are ten Tier 1 MROs, the best they will do is have a chance of securing 1 in 10 instructions. It will be interesting to see the MoJ’s response will be to both claims.  Read more about MedCo in Nigel Teasdale’s recent update

Update Insurance fraud taskforce Last month the Insurance Taskforce released their interim report, together with a list of questions for interested parties to answer by 13 May.  DWF will be looking to submit a response.  Please contact us, if you would like to see a copy of the response when it has been prepared. The interim report and questions can be found on the Insurance Fraud Taskforce web page. In the meantime the ABI has published research providing valuable insight as to why people commit insurance fraud. It may be useful to those looking to answer the questions set by the Taskforce. Read the research here

Mesothelioma claims: LASPO funding provisions In December the Justice Select Committee published the government’s response to its July report. The government decided not to end the exemption from the application of LASPO provisions on recoverability to mesothelioma claims. They said a further review of the likely effects of the funding reforms on mesothelioma claims would be carried out in due course so it remains to be seen how the next government will take this forward. 

Mesothelioma Payment Scheme: increased tariff In February 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 says this could mean an increase of up to £54,000 per person. The Regulations making the changes came into force on 31 March.

Update Review of Part 36 offers Following the CPRC’s comprehensive review of Part 36, the 78th update to the CPR containing the amendments came into force on 6 April 2015.  Read more in our update Part 36: The new rules – April 2015

Update Pre-action protocols The CPRC has now completed its review of the pre-action protocols and the amended versions came into force on 6 April albeit that they were published on the MoJ website three days later. Amendments have been made to a number of protocols and the Pre-action Conduct Practice Direction. They can be found on the CPR web page

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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