bto_Insight_September_2010

Issue: September 2010

Insight

Insurance News

Devil in the Detail For some time there has been debate over the issue of whether step parents are, or are not, entitled to recover damages for Loss of Society in terms of Section 1(4) of the Damages (Scotland) Act 1976 as amended by the Family Law (Scotland) Act 2006, which restricted the definition of “immediate family” and stated that “...no award of damages...shall be made to a person related by affinity to the deceased.”

On one view the legislation clearly excludes claims by step parents, however, it does not sit particularly well with the remainder of Section 1(4) which allows claims to be made by “...any person who accepted the deceased as a child of the family”.

On 6 July 2010, this issue was addressed

by Lord Pentland in Roslyn Mykoliw and Others v. Botterill and Tulloch Transport Limited in which he demonstrated how legislation must be interpreted with regard to its intended outcome rather than when an “unintended” literal reading would result in a “perceived injustice”.

The case in question involved a fatality whereby the Defenders and Third Party sought to argue for dismissal of the claim brought by the deceased’s stepfather, Mr Marshall.

Essentially, the Defenders and Third Party sought to argue that he was not entitled to claim damages by virtue of the fact that his relationship with the deceased was one of affinity.

The Defenders argued that the consequence of this legislation, however unfair, was that Mr Marshall did not have title to sue purely as a result of his being step-parent to the deceased. They argued that the amended provision effectively personally bars those who have ties of “affinity” from title to sue, even if these ties are also accompanied by

a relationship in which the deceased is “accepted” and loved as a son.

Devil in the Detail

It was not disputed that Mr Marshall had enjoyed an extremely close relationship with his step-son who referred to him as “dad” and who lived with him until he was 26. It was also accepted that he maintained his step-son financially, treating him as a son.

Are step parents entitled to recover damages for loss of society in terms of the Damages (Scotland) Act 1976?

Lord Pentland conceded that based on the wording of the legislation, the Defenders’ argument would stand. However, he pointed to the “unsatisfactory” drafting of the legislation, advising that the results of the literal argument would be to produce “an absurd outcome”. Ultimately, he found in favour of Mr Marshall and allowed him title to sue.

Lord Pentland went on to say that the rationale behind amending the legislation had been an attempt by Parliament to address the myriad of multi-dimensional relationships which nowadays constitute as family. However, the unintended result of the Act is that cohabitants, who accept a child as one of their family, would have title to sue merely because of their unmarried status whereas those connected by affinity, although also by affectionate ties, would be effectively barred.

It is highly unlikely that Parliament in drafting the legislation intended to give preference to the rights of cohabitants over married couples and wished to exclude step-parents from title. Furthermore, as Lord Pentland also considered, such a narrow reading of the law would run contrary to Article 14 of ECHR which requires “the court to read and give effect to legislation in a way which is compatible with Convention Rights.”

Carly Forrest cfo@bto.co.uk

Breach of Policy Where do insurers stand where a driver of a vehicle is insured but in default of his or her policy terms and conditions?

Undue Delay - What is “Inordinate and Inexcusable”?

At what point does delay become unfair?

Update A Breath of Fresh Air Wallace v Glasgow City Council [2010] CSOH 88

Update

Breach of Policy There is an increasing tendency on the part of Pursuers to raise litigation directly against insurers in terms of the European Community (Rights against Insurers) Regulations 2002. Those Regulations create the right for a Pursuer to sue an insurer directly in place of an “at fault” insured.

Where a driver is uninsured, it is clear that the Regulations cannot apply and the insurer of the vehicle may require to act as Road Traffic Act insurer and satisfy an unsatisfied judgement against the uninsured driver.

But what of the situation where the driver of a vehicle is insured but in default of his policy terms and conditions? The insurer is contractually entitled to decline indemnity to the defaulting insured and often advises a Pursuer’s representative that they are only acting as RTA insurer and asks for an unsatisfied judgement to be obtained.

However, often the court action is then raised against the insurer.

The terms of the Regulations are unclear as to whether action against an insurer direct is competent where the insured has

breached the policy but, on balance, we think that the court would find that it is indeed competent to sue the insurers where a driver was covered by a policy of insurance at the time of an accident, but has breached the contractual terms of the policy.

In those circumstances, it seems pointless for insurers to wait for a judgement to be taken against themselves before settling the claim under the Road Traffic Act. It makes much more sense to ignore the Act and to proceed to settle the court action against the insurer on best terms available. The right of recovery against the defaulting insured that would normally be provided by the Act should be found in the contractual provisions of the policy itself and it should be the policy breach that is relied upon in any subsequent proceedings to seek reimbursement from the insured. This prevents any unnecessary judgements being issued against the insurers and avoids any adverse effect that these judgements could have on an insurer’s credit rating.

Stephen Bryceland sbr@bto.co.uk

Undue Delay - What is “Inordinate and Inexcusable”?

The decision of the Inner House in the case of Hepburn v. Royal Alexandra Hospital 2010 CSIH 71 was issued on 27 July 2010.

The Inner House overturned the decision of Lady Dorrian who had dismissed this medical negligence claim on the basis of inordinate and inexcusable delay on the part of the Pursuer that had caused unfairness to the Defenders. The action was raised in 1998 but was immediately sisted (stayed) for six years, after which time the Pursuer’s solicitors withdrew. Their replacements obtained a further sist for two more years, after which a fourteen page amendment was tabled in late 2007.

In reaching their decision the Inner House considered the legitimacy of the controversial decision in Tonner v. Reiach and Hall 2008 SC 1 with Lord Carloway criticising that judgement, calling for it to be reviewed and arguing that the Extra Division in Tonner had “...invented a new procedure which cut across the existing Rules of Court and settled practices."

In Tonner, the Inner House decided that a Judge in the Court of Session had an inherent power to put an end to a pending action on the basis that there had been inordinate and inexcusable delay together with an added element of unfairness in the

relevant factual and procedural context. The power was described as a draconian power of last resort and prior to exercising such a power, the Court was required to assess each case carefully on its individual merits and particular circumstances.

In overturning the Outer House decision in Hepburn, the Inner House appears to be continuing a policy of retreat from the Tonner position in line with other recent judgements such as Rennie v Lothian Health Board 2010 CSOH 61 and Cameron v Hughes Dowdall 2008 CSOH 151 (in which Solicitor Advocate Paul Motion appeared on behalf of the Defenders) where Pursuers were allowed to continue despite the fact that these cases both appeared to meet the criteria for inordinate and inexcusable delay causing unfairness.

The Defenders in Hepburn and Cameron had understandably advanced the Tonner position and argued that the responsibility for running a case lay with the Pursuer regardless of the Defender’s position.

However, if Hepburn does represent a further attempt to limit Tonner, Defenders in Scotland will require to temper their expectations of having cases dismissed for undue delay.

Douglas Jessiman dwj@bto.co.uk

A Breath of Fresh Air In the case of Wallace v Glasgow City Council [2010] CSOH 88, an employee at a school raised an action relying on the Management of Health & Safety at Work Regulations 1999 and the Workplace (Health, Safety and Welfare) Regulations 1992 after she sustained injuries to her foot when opening a window in the staff toilet facilities. She stood on the toilet bowl in order to reach the opener with the result that the toilet bowl collapsed, causing her to fall. At the time of the accident, no window pole was kept in or immediately outside the cubicle, however the school janitor gave evidence that a pole was kept in his office and was available for use upon request. The Pursuer stated that she was unaware of this and that she and her colleagues often stood on the toilet for this purpose. In granting decree of absolvitor in favour of the local authority, Lord Tyre held that it could not be held to be likely that the window would be opened by persons standing on the toilet in order to reach it where there were safe alternative means of action, namely use of the window pole or leaving the window closed. Furthermore, the opening of the window was a matter of courtesy and it did not seem likely that staff would have exposed themselves to risk merely out of courtesy to others.

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The material in this publication contains general information only and does not constitute legal or other professional advice.