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Looking ahead

June 2016

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

• Appeals and judgments to watch out for
• Justice Committee report on court fees 
• Developments on the expansion of fixed recoverable costs
• European Commission Roadmap for addressing Vnuk

Forthcoming cases

Supreme Court

Shipping claim: fraudulent devices. The case of Versloot Dredging BV v HDI Gerling Industrie Versicherung AG on the question of whether an insurer was entitled to resist a claim due to the use of a fraudulent device was heard on 16 March. 

Employers’ liability insurance: directors’ liabilities. On 12 April the Supreme Court heard an appeal from the Inner House of the Court of Session in the case of Campbell v Gordon. The issue is whether on the liquidation of a company, a director who has failed to obtain and maintain insurance on behalf of the company as required by statute, incurs personal liability to an injured party for loss arising from that failure.

Personal injury: landlord & tenant. The appeal in Edwards v Kumarasamy was heard on 5 May to consider whether a landlord under a short lease of a premises, in respect of common parts of the building including the exterior of the building, was liable for his tenant’s injuries under the extended covenant implied into the tenancy by section 11(1A) of the Landlord and Tenant Act 1985.

Disability discrimination: buses. FirstGroup Plc v Paulley concerns the Equality Act 2010 and the reasonable adjustments a bus company is required to make in order to accommodate disabled wheelchair users. The appeal was heard on 15 June.

Personal injury fraud: setting aside settlement. In Hayward v Zurich Insurance Company Plc the Court of Appeal rejected the insurer’s attempt to set aside a personal injury settlement when the claimant’s fraudulent exaggeration of his injury later came to light. The Supreme Court heard this case on 16 June.

Update - Insurance: professional indemnity. The case of Impact Funding Solutions Ltd v AIG Europe Insurance Ltd concerns the question of whether professional indemnity insurers have to indemnify solicitors in respect of loans taken out to cover the cost of disbursements. It will be heard on 30 June.

Update - Road traffic accident abroad: applicable law. The issue in Moreno v Motor Insurers Bureau is whether, when a claimant is injured by a culpable, uninsured car in another EU member state, the scope of the MIB's liability to the claimant is to be determined in accordance with the law of England and Wales or the law of that other EU member state. The hearing is listed for 12 July.

Update - Non-delegable duties: foster carers. The defendant’s solicitors have reported that the case of NA v Nottinghamshire County Council concerning the abuse of a child by foster parents and the duties owed by local authorities in those circumstances has been listed for 8 February 2017.

Supreme Court cases awaiting developments We are awaiting further details for a number of cases where permission to appeal has been granted in recent months:

  • Google v Vidal-Hall & Ors which concerns data protection and compensation rights and relates to a dispute over the user information through cookies via use of the Apple Safari Browser.

  • Mapfre Mutualidad Compania De Seguros Y Reaseguros SA & anor v Keefe on whether a Spanish insured can be joined into the English proceedings already brought against the Spanish insurer. 

  • Swynson Ltd v Lowick Rose an accountants' negligence case

  • Brownlie v Four Seasons Holidays Inc involving jurisdiction issues arising out of a fatal accident claim.

  • Gavin Edmondson v Haven Insurance which concerns an insurer engaging directly with claimants to conclude their claims which had been commenced in the Portal

Court of Appeal

Motor: ex turpi causa.In Beaumont & Anr v Ferrer the High Court rejected the personal injury claims of two claimants who were seriously injured whilst attempting to fare jump a taxi. The case is due in the Court of Appeal on 28/29 June. See the DWF update on the HC decision

Costs: fixed costs. Bird v Acorn concerns the stage of fixed costs that should apply when a case drops out of the portal, is listed for disposal and then settles. The hearing will take place on 19/20 October.

Costs: fixed costs & the multi-track. The question in Qader v Esure is whether fixed costs apply to a claim which starts under the low value personal injury claims protocol but subsequently proceeds on the multi-track. The appeal is listed for 25/26 October.

Motor liability: pedestrian children. In AB v Main a car collided with children who had been playing at the side of the road but then moved into the road. The driver was held liable with a 20% discount for contributory negligence. The defendant has leave to appeal the finding of primary liability. The appeal will be heard on 15/16 February 2017.

Credit hire: rates evidence. On 21/22 February 2017, the Court of Appeal will hear appeals in two important credit hire cases in respect of rates evidence and the approach that a court should take in the event that the rates evidence does not reflect the claimant’s case. Clayton v EUI Ltd and McBride v UK Insurance Ltd. 

Portal claims: £400 club. In April there were press reports of a decision in the Cardiff County Court in which the judge ordered reimbursement of pre 2013 stage 1 costs paid by insurers after an admission of liability, but following which the cases did not proceed to stage 2. The judge granted a leapfrog appeal in Iqbal & Anor v Leek & Anor which has been given a hear-by date in the Court of Appeal of 28 February 2017.

New - QOCS: claims against the MIB. In Howe v MIB it was held that a claimant who brought a claim against the MIB arising out of an RTA in France did not have QOCS protection. There are appeals both on this issue and the substantive claim. They are currently being dealt with separately with one due to be heard by 13 March 2017 and the other by 11 April 2017.

New - Pre-action disclosure: fixed costs. FOIL has reported on an appeal decision in Sharp v Leeds City Council in which HHJ Saffman has held that fixed costs applied in a PAD application. The matter is now going to the Court of Appeal on 23/24 January 2017.

County Court

Update - Costs: assignment of CFA. On 11 May judgment was handed down in Jones v Spire Healthcare Limited concerning the assignment of a conditional fee agreement. HHJ Wood QC allowed the claimant’s appeal, finding that both the benefit and burden of the CFA were assigned. Andrew Hogan who appeared in the case has now confirmed there will be no further appeal.

Consultations

Update - Fixed costs in clinical negligence claims At the end of May the Gazette reported that the Department of Health had conceded that the delay in publishing the consultation on the introduction of Fixed Recoverable Costs in clinical negligence claims means that an October implementation is not achievable. The consultation is now expected “later this year”. 

Update - Court fees increase: Justice Committee Inquiry The House of Commons Justice Committee this week published its report following its inquiry into the effects of the introduction and levels of increased fees across, the employment tribunal and the civil courts (having already previously reported on the criminal courts charge). The Committee has no objection to the principle of charging fees to court users, as some degree of financial risk is an important discipline for those considering legal action. However there should be a clear and justifiable relationship in the fee system between certain factors - such as the vulnerability of claimants and their means in comparison with respondents - and the degree of financial risk that litigants should be asked to bear. Further, the introduction of fees set at a level to recover or exceed the full cost of operation of the court requires particular care and strong justification. Concern was raised about the quality of the MoJ’s research and criticism levelled at the delay in publication of the government’s review of the impact of employment tribunal fees. Specifically in relation to civil court fees, the Committee recommends a review of the April 2015 increase in fees and that the government should not resurrect its proposal to double or even remove the £10,000 cap unless such a review has been undertaken. They also recommend piloting a system in which there is a graduated or sequential system of fee payments whenever there are substantial fees payable.

The following consultations are awaiting official responses:

MedCo: call for evidence Following the March publication of the outcome of the MoJ’s Call for Evidence relating to the operation of the MedCo Portal, the MoJ carried out a brief consultation, which was isolated to the definition of an MRO for the purpose of receiving instructions via MedCo. This short consultation closed on 15 April and a response is awaited. Read more about the outcome of the Call for Evidence in our update.

Claims Management Regulation: fees cap In February the MoJ published a consultation on proposals to cap the level of fees that regulated CMCs can charge consumers. It is currently only proposed that the cap should apply to the financial products and services claims sector. However, the consultation did invite views on whether fee controls in the personal injury sector should be considered as well. The consultation closed on 11 April.

Court fees increase: government response It was last December when the MoJ responded to the court fees consultation with proposals to implement fee increases of 10% across the range of civil proceedings but also to retain the cap on issue fees in money claims at £10,000. The implementation dates for these changes are still awaited.

CMA legal services study In January the Competition and Markets Authority launched a market study to “examine long-standing concerns about the affordability of legal services and standards of service.” The CMA plans to examine three key issues: whether consumers can make informed decisions about buying legal services; whether they are getting enough protection and satisfactory redress if things go wrong; and whether current regulation is distorting competition in the market. Interim findings will be published in July 2016 with a final report due in December.

Discount rate consultations The process of reviewing the discount rate and the methodology in setting it began in August 2012. 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 but the panel only began its considerations in March 2015. An MoJ update in January confirmed that the expert panel’s report had been received and was being analysed by the MoJ to enable the Lord Chancellor to consider the matter further. However they were not in a position to indicate when an announcement on the rate would be made.

Legislation

Insurance contract law reform: draft Insurable Interest Bill. In April the Law Commission and the Scottish Law Commission published a draft Bill following their review of the issue of Insurable Interest, having previously made proposals for reform in 2008 and 2011. They were 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. The draft Bill is intended to reflect the proposals set out in the issues paper and the Law Commissions invited comments on the draft Bill by 20 May 2016 with a view to publishing a final draft Bill and report in autumn 2016. 

Enterprise Act: late payment of insurance claims. As we reported last month, the Act which includes provisions giving policyholders a right to damages for late payment of claims received Royal Assent on 4 May. The late payment provisions will come into force on 4 May 2017. Read more in last month’s update from Jacquetta Castle and Robert Goodlad 

Update - Third Parties (Rights against Insurers) Act 2010. The 2010 Act has now been updated by regulations (the Third Parties (Rights against Insurers) Regulations 2016) to reflect changes in insolvency law. The 2010 Act will finally come into force on 1 August 2016. This month, Companies House has issued a press release about the coming into force of the Act. It contains a helpful summary of the situations in which the Act will apply.

Update - Motor insurance: implications of ECJ Vnuk ruling for UK legislation. On 8 June 2016 the European Commission published a ‘Roadmap’ reviewing the ruling in Vnuk and suggesting a number of options for how to respond to it. The Commission has acknowledged the concern expressed by a number of governments that the judgment has extended the scope of the Directive to areas that are unrelated to “traffic”. Unsurprisingly then, the Roadmap’s preferred option is to limit the scope of the Directive to vehicles “in traffic”. The Commission will begin a targeted consultation with insurers immediately on this specific issue but points out that there will be a wider consultation later this year looking at all aspects of the Directive. Read more in our update from Nicola Dunk and Amy Jeffs.

Also on the horizon...

Autumn statement: small claims track & low value whiplash claims. We await the consultation on the government's proposals to remove the right to general damages for minor soft tissue injuries and to increase the small claims track limit for personal injury claims to £5,000. In a keynote speech at this month’s APIL conference, Lord Faulks confirmed the government’s intention to proceed with these reforms. You can read more about this speech in Simon Denyer’s update. Notwithstanding this intention, it is widely acknowledged that we are in a state of limbo whilst we await the outcome of the EU referendum which may well affect the timing of these consultations.

Update - Fixed costs extension: Civil Justice Council. In April the Gazette reported that the Civil Justice Council had invited senior judges, lawyers, costs lawyers and academics to start looking at the ‘principle’ of extending fixed recoverable costs. The CJC has now published a note of the points raised (pdf) in the discussion held in March. The note highlights that the issue is that costs are disproportionate in low value claims but acknowledges that there are no easy solutions, as inevitably there is no “one size fits all” and there are risks to access to justice. Another issue that they had already encountered during the review of the Guideline Hourly Rates was a sparsity of evidence and a reluctance from firms to provide it. The timing of the initiative was also questionable given the lack of any assessment yet of the 2013 reforms. Separately, at the end of May, Lord Justice Jackson gave a lecture at the Westminster Policy Forum on fixed costs. Read more about the speech in Simon Denyer’s update 

MedCo. Last month we reported that 20 users have been suspended from using the MedCo portal for bypassing the random allocation of experts process and have been invited to make appropriate representations regarding the serious breach of the MedCo authorised user agreement. The website also states that further users have been identified manipulating the search function and have also been asked to explain their conduct. This was something touched upon by Lord Faulks in last month's speech (mentioned above). Hinting that more action could be on the way, he said “I am also pleased to note the clear channels of communication that are developing between MedCo and the SRA which will, I am sure, result in appropriate regulatory action being taken when necessary”. Lord Faulks also indicated that the government was pleased with the work of MedCo in its first full year. Those experts not accredited by 1 June 2016 will not be able to receive instructions from the MedCo portal.

Update - Insurance Fraud Taskforce. Since publication of the Taskforce's final report in January (read more in our update) there have been a number of developments which appear to complement the work of the Taskforce. The Home Secretary announced the launch of a Joint Fraud Taskforce which is intended to create a new era of collaboration within the financial sector. We also have Carol Brady’s review of Claims Management Regulation, and in March the SRA issued a warning notice to solicitors of the ‘risk factors when dealing with personal injury matters’. At the end of May the government published its response to the recommendations of the Taskforce in the form of a written statement. The government supports the report and accepts each of the recommendations. However, the statement says that proposals for implementation will be set out “in due course” and “there needs to be a concerted effort by all those involved in the insurance process to tackle this serious problem”; perhaps indicative of the government’s other priorities at the moment.

Claims Management Regulation. Carol Brady published the final report following her independent review of claims management regulation in March. The review had been commissioned by the Treasury and the MoJ to examine the perception of widespread misconduct among CMCs and make recommendations to improve the regulatory regime. At a recent meeting, Carol Brady indicated that a new team overseeing CMC regulation was already up and running within the FCA. She also indicated that there had been no opposition to the recommendation that it be made mandatory for all CMCs to disclose their referral source and that it was likely that this measure will be implemented.

Mesothelioma claims: LASPO funding provisions. In late 2014 following a Justice Select Committee inquiry, 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 and this will now form part of the Post Implementation Review of LASPO which is due to take place between April 2016 and April 2018. In the meantime FOIL wrote an open letter to the MoJ highlighting that the ongoing exemption is prejudicing mesothelioma claimants who are not receiving the 10% uplift on general damages and whose claims are not settling quickly. FOIL recommends a mesothelioma portal with an accompanying fixed costs regime to expedite straightforward claims. 

NIHL claims: government action. In June 2015 the ABI published its report Tackling the Compensation Culture: Noise Induced Hearing Loss, improving the claims system for everyone which highlighted concerns about the increasing numbers and cost of NIHL claims. In late July the MoJ announced that in response to those concerns it had asked the Civil Justice Council to consider the issue and make recommendations. They are to consider how a fixed costs regime for NIHL cases might work and how the handling of these claims might be improved. The group was aiming to prepare an initial report by November with a final report by April 2016 but we have not yet seen any initial recommendations. In the meantime, at a conference in March DWF examined the issues involved in dealing with fraudulent NIHL claims. Read more in our update

Civil Justice Council (CJC) review of Damages Based Agreements. The government's response to the CJC review of DBAs is still awaited. In September the CJC made a number of recommendations but the main issue of interest going into the review was the government’s decision not to permit hybrid DBAs, and in particular concurrent hybrid DBAs. Under this type of hybrid “a law firm receives concurrent funding via both a DBA and via some other form of retainer (e.g. discounted hourly rates), in the event of the claim’s success; and receives discounted hourly rate fees in the event of the claim’s failure.” The Working Group was divided on whether these should be allowed but it concluded that “it was a policy decision which was ultimately one for the government” and “the government should be encouraged to evaluate the arguments in favour”. Read more in the CJC media release

Civil Courts Structure Review: LJ Briggs' Interim Report. In February Lord Justice Briggs published an interim report for his review of the structure of the civil courts. The headline recommendation was the introduction of an online court capable of handling claims with a value up to £25,000. This also fits with last year's recommendations from Richard Susskind's advisory group. Comments on the interim report were invited by 29 February with a final report due by the end of July 2016. In the meantime, Briggs LJ has visited British Columbia and the Netherlands to look at similar initiatives in those places and he has been holding meetings with stakeholders around the country to obtain oral feedback on his proposals. His last meeting was held on 9 June and the final report is awaited, although there are not expected to be fundamental changes from his interim findings.

Motor Insurers' Bureau: new agreements. In February 2013, the Department for Transport consulted on a review of the Uninsured and Untraced Drivers Agreements. We have previously reported on the new Uninsured Drivers Agreement which came into force for accidents occurring on or after 1 August 2015. The DfT also published a Supplementary Agreement to the Untraced Drivers Agreement, although work continues on a new Untraced Drivers Agreement, with a further DfT response expected in due course. The new agreements can be found on the MIB website. In the meantime, the agreements are the subject of an ongoing judicial review by the road victims’ charity RoadPeace for non-compliance with EU law.

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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