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Scotland this month and looking ahead

Caroline Coyle highlights the key issues dominating the legal landscape in Scotland this month.

September 2016

Compulsory Personal Injury Pre-Action Protocol – A Reminder

New Rules introducing a compulsory Personal Injury Pre-Action Protocol will come into force on 28th November 2016 and will apply to certain damages claims up to the value of £25,000 in local sheriff courts and the all-Scotland Personal Injury Court (ASPIC).

The new Protocol sets out the steps both pursuers and defenders will be expected to take before an action is raised in court. The new Rules also give the court power to make an award of expenses against a party who fails to comply with those requirements. The Protocol aims to encourage the fair, just and timely settlement of injury claims so that only those cases which cannot be agreed between parties will be lodged in court.

Read more about the compulsory protocol in our update.

Counter Fraud Scotland

Lorraine Carolan, National Head of Counter Fraud and Jill Sinclair, Head of Counter Fraud Scotland recently hosted clients in London and Glasgow at our Scottish Counter Fraud Conference. Both conferences were extremely well attended and received by clients. Topics included the use of telematics in claims and an overview of the Scottish Solicitors markets.

The team are taking the conference direct to clients and hosting a number of other forums and events over the next few months. Please get in touch with Jill Sinclair for further information.

You can also read Jill’s feature on the outcome of two recent Supreme Court cases which has been published in this month’s edition of the Law Society Journal.

Cases of Interest

Professional Indemnity

A recent case related to a petition for Judicial Review and discussed the plea of “mora, taciturnity and acquiescence”. This case related to an individual who wished to challenge the occupancy agreement that had been entered into by the petitioner and the respondent on 27 February 2015.  In the case there was a delay of over nine months before solicitors acting for the petitioner wrote to the respondents and nearly ten months before a petition was lodged in Court. This was considered to have been a delay beyond what might be regarded as a reasonable time even accounting for the personal circumstances of the petitioner. One main issue that the Court placed significant weight on was the fact that the petitioner was in receipt of legal advice in June 2015. It was argued that the solicitors did not realise that they could challenge the decision until December. It was also highlighted that the petitioner did not raise the issue with the respondent prior to the petition being lodged. This fact was again exacerbated by the fact that the petitioner was in receipt of legal advice. The plea of mora, taciturnity and acquiescence was sustained and the petition was dismissed.

This case illustrates the importance of being aware of the potential Judicial Review challenge, the appropriate timescales and the importance of advising the ‘respondents’ of the intention to challenge the decision as soon as possible.

Paula Geuve Quissongo v Glasgow City Council 2016] CSOH 135  

Edward Price v A Decision of the Scottish Legal Complaints Commission [2016] CSIH 53

Catastrophic Injury

Clark v Greater Glasgow Health Board (unreported)
Note by Lord Stewart [2016] CSOH 126

Medical negligence - successful defence of a major clinical negligence action in which the pursuer sued for £15 million for brain damage suffered from birth.  Alleged negligence by doctors and midwives during pursuer's birth resulting in her “profound and irreversible” brain injury.

The case considered the difference between agency care and direct employment of carers when quantifying the claim.  The value of the difference in this case came to £2 million.  The judge took a mid-point between the two approaches on the basis that direct employment of carers was reasonable up the stage the pursuers’ parents were in their mid-60s, when the agency model would be more appropriate. View judgment >

Pleadings not sufficient

Shelia Tapp v Helen McColl [2016] CSOH 129

The pursuer’s solicitors, pled on record that “…a consequence of the soft tissues injuries, the pursuer has exacerbated her cervical spondylosis.  She has also developed a chronic pain syndrome…” 

The expert for the pursuer gave evidence that the pursuer had suffered an exacerbation of her fibromyalgia condition.  The pursuer confirmed this in her evidence.  There were no pleadings/record to support the exacerbation of her fibromyalgia condition.

The court held in not admitting the evidence re fibromyalgia that the defender had no proper notice that the pursuer’s pre-existing fibromyalgia had been exacerbated by the accident.

If it had been included on record the court would have awarded £20,000 more for solatium.

The judgement contains an interesting discussion of what medical experts are needed, what authorities and documents the experts should have considered and (while distinguished in this case) provides further comment on the Kennedy v Cordia UKSC 2014/0247 decision. View judgment >

Property Damage

Red Star Pub Company v Scottish Power Limited [2016] CSOH 100

Counter Fraud

The counter fraud team in Scotland have recently had a success repudiating a late notified claim with large savings for the client.  The result came as a result of pro-active file handling by the insurer and DWF combined with excellent intelligence investigations. Read more >

Other cases of interest:

Stephen McFadden v Armando Margiotta & UK Insurance Limited, [2016] SC HAM 44

Professional Indemnity

Edward Price v A Decision of the Scottish Legal Complaints Commission [2016] CSIH 53

Property Damage

Red Star Pub Company v Scottish Power Limited [2016] CSOH 100 

Scottish parliamentary business

On 6 September the Scottish Government unveiled its legislative programme for 2016/17. View >

The most notable proposals for the industry are likely to be the Limitation (Childhood Abuse) Bill which will remove the 3 year limitation period for victims of historic child abuse and the Expenses and Funding of Civil Litigation Bill.  You can learn more about the implications of the Expenses Bill in our update: QOCS is coming to Scotland McLASPO is here

Proposals

Gillian Martin MSP has outlined her reasons for requesting the usual requirement for a consultation to be waived in the process for implementing her proposed Seat Belts on School Transport (Scotland) Bill. The MSP believes a recent consultation undertaken by the Scottish Government and a relevant working group that has been meeting for two years have given stakeholders the chance to express their views and provided enough information to inform the Bill.

Seat belts play an important role in keeping people safe while travelling in motor vehicles, as demonstrated by an extensive body of evidence established over a number of decades.

Table 1 Children injured on bus/coach journeys in Scotland between 2009-2015 Child (0-15) bus/coach casualties by severity, 2009-141

2009

2010

2011

2012

2013

2014

2015

2010-15 average

Slight

51

47

49

42

48

28

40

42

Serious

2

7

4

1

3

2

2

3

Total

53

54

53

43

51

30

42

45

Government Consultations / Legislation

The Scottish government has issued an inquiry entitled Consultation on Scottish Court Fees. This document asks how court fees should be increased in order to achieve full cost recovery. This is based on the belief that the costs of the civil court system should be borne by court users rather than taxpayers.

DWF will be involved in responding to the consultation.

New Legislation

Insurance Act 2015 – what’s does it do?

The much anticipated Insurance Act 2015 ("the Act") came into force in Scotland, England, Wales and Northern Ireland on 12 August 2016. The application of the Act is broadly the same across all jurisdictions and the legislation arises from a joint exercise between the Law Commissions for Scotland and England and Wales. DWF participated in the Law Commission’s consultation process.

The Act introduces five key changes in the following areas that insurers, policyholders and insurance brokers alike should be aware of:

1) Fair presentation of risk;

2) Remedies;

3) Warranties and Conditions;

4) Fraudulent claims and

5) Contracting out.

1. Fair Presentation

The Act clarifies what information a purchaser of insurance has to provide to the insurer under their ‘Duty of Disclosure’. The duty requires policyholders to undertake a reasonable search of information available to them and that all information provided to the insurer at the point the contract is entered into will form part of the presentation to be assessed for the purposes of considering whether or not the presentation is fair. There are a number of Scottish provisions in relation to pleural plaques, time bar and personal injury, which can all impact on the risk.

Impact - If seeking to exercise remedies for non-disclosure, insurers will no longer be able to rely on a passive approach to disclosure. Further enquiries may be required before underwriting risks; insurers should consider implementing systems and process to identify where this is necessary.

2. Remedies

There is an entirely new system of proportionate remedies where the duty to make a fair presentation has been breached. Where the misrepresentation was deliberate or reckless, it will be possible to avoid a policy and keep the premium. In all other cases (even where the insured has made an innocent mistake) proportionate remedies based on what the insurer would have done had it known the true facts will apply.

For example, if the insurer would not have accepted any risk at all, then they may avoid the policy and refuse all claims but must return the premiums paid. Alternatively, if the insurers would have underwritten the policy but on different terms then those terms will apply retrospectively. If a higher premium would have been charged, the claim settlement will be reduced proportionately.

Impact - If an insurer wishes to bring an action for relief for non-disclosure they will be required to prove how they would have acted differently. It is likely that commercially sensitive information such as underwriting guides will need to be disclosed. Insurers will need to consider the extent to which they are prepared to disclose such information.

3. Warranties

Previously, breach of warranty in an insurance contract automatically discharged the insurer from liability completely from that point onwards even if the breach was remedied. Now, under the Act, breaches of warranty can be cured – cover is suspended for the period during which the warranty is not complied with. An insurer will be liable for losses that take place after a breach of warranty has been remedied, assuming a remedy is possible.

Impact - Insurers should be aware that they will no longer be able to rely on breach of warranty to reject a claim, if the breach is not connected to the actual loss that has occurred.

4. Fraudulent Claims

Clear, statutory remedies to fraudulent claims are provided by the Act. Most significantly the insurer will not be liable for the claim.  They may also keep premiums, recover any payment made and cancel the policy with effect from the date of the fraudulent act.

Impact - insurers should be aware that previous valid claims arising prior to the fraudulent act are unaffected.

5. Contracting out

Insurers can chose to contract out of the new law for non-consumer policies and therefore apply more unfavourable terms than those under the Act with the exception of the abolition of basis of contract clauses.

Impact - An insurer must do this before entering into any contract and must bring any disadvantageous terms to the client's attention.Given that the Act is principle-based a period of uncertainty and test litigation with no doubt ensue. However the Act does appear to have addressed the imbalance between the interests of the insurers and the insured.

The Third Parties (Rights Against Insurers) Act 2010

The Third Parties (Rights Against Insurers) Act 2010 is now in force across the UK, making it easier for third parties to seek damages for losses caused by parties who have become insolvent and therefore streamlining the process by which a pursuer can bring a claim directly against an insurer instead of an insolvent defender.

What does this mean?

  • Insurers may see an increase in claims as pursuers will no longer have to risk the costs of establishing the defender’s liability and quantum before finding out whether there is insurance in place to cover the claim

  • Insurers are likely to face an increased number of information requests.

  • The number of requests and the relatively short time in which they must be dealt with may place a significant administrative burden on insurers.

View legislation >

Fatal Accidents - the Inquiries into Fatal Accidents and Sudden Deaths etc.(Scotland) Act 2016. 

(see SCJC section below)

View legislation >

Simple Procedure Rules - The new Simple Procedure Rules have now been laid before Parliament, replacing the small claims procedure for cases which have a value of £5,000 or less in the sheriff court. They will come into force in November 2016. View >

On the horizon

The Limitation (Childhood Abuse) (Scotland) Bill 

The Expenses and Funding of Civil Litigation Bill

The Act of Sederunt (Sheriff Court Rules Amendment) (Personal Injury Pre-Action Protocol) 2016 was made on 20 July 2016 and comes into force on 28 November 2016. It introduces a new chapter into both the Ordinary Cause Rules (Chapter 3A) and the Summary Cause Rules (Chapter 4A) requiring parties to a prospective action of damages for personal injury to comply with a compulsory protocol prior to commencing proceedings. Read more >

Scottish Civil Justice Council (SCJC)

Scottish Civil Justice Council (SCJC)

SCJC Working Group - Inquiries into Fatal Accidents and Sudden Deaths etc. (Scotland) Act 2016

A working group has been set up to take forward legislative changes to inquiries into fatal accidents and sudden deaths. The Inquiries into Fatal Accidents and Sudden Deaths etc. (Scotland) Act 2016 received Royal Assent this year and the SCJC will continue to consider secondary legislation required and review practice and procedure followed in inquiry proceedings, including the drafting of inquiry procedure rules. The working group agreed that a preliminary hearing should be held in all but exceptional cases and that submission of evidence electronically should be supported by the new rules.

Personal Injury Committee – the committee is considering an initial set of draft rules for personal injury cases to be included in the proposed Simple Procedure Rules.  At its 17 October 2016 meeting, the Committee will give further consideration to these rules, consider a draft clinical negligence pre-action protocol and set up a working group to develop an industrial disease pre-action protocol for the consideration of the full Committee.

The Access to Justice Committee – the committee is currently consulting on the draft simple procedure rules which will replace the small claims and summary cause procedures in the sheriff court.  

Scottish Law Commission

Scottish Law Commission

Law Reform Projects

Law of prescription - The Law Society of Scotland has said that clarity is needed on the current time limits for raising claims in court.  In its response to a discussion paper published by the Scottish Law Commission (SLC) on prescription law, the Law Society has said that providing clarity on time limits could reduce time and money spent on raising cases which could be settled outside the courtroom.

The consultation closed on 23 May and the Commission are now analysing the consultation responses, Thereafter a report and a draft Bill will be published in the first half of 2017.

View discussion paper >

Other notable activity

ABI – Scotland

Alastair Ross, Assistant Director, Head of Public Policy (Scotland, Wales & NI) recently attended our Scottish Counter Fraud Conference in Scotland.  We were able to speak with him about his work with the ABI. DWF look forward to working with the ABI in respect of a range of issues that will affect the Insurance industry in Scotland, such as the Limitation (Childhood Abuse) Bill and the Expenses and Funding of Civil Litigation Bill.  

Scottish Child Abuse Enquiry – Update

Senior Judge Lady Anne Smith is now leading the enquiry.  The obtaining of evidence will continue but the hearings planned for November will be postponed. Read more >

 

For further information please contact Andrew Lothian, Head of General Insurance (Scotland) on 0131 474 2305, Caroline Coyle, Associate on 0141 228 8132 or Jill Sinclair, Head of Counter Fraud (Scotland) on 0141 228 8196

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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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