Legal Matters - Issue 26 - Dec 2012

Legal Matters

Personal Injury and Insurance Issue 26, December 2012

Double the risk causation test used for lung cancer claims The Phurnacite litigation was a group

Grief (UK) Ltd (2011) and the Atomic

action involving around 200 claims

Veterans litigation (A, B & Others v

with eight selected as lead cases.

Ministry of Defence 2012), she found

The Phurnacite plant had for many years produced a smokeless fuel from a process combining fragments of coal with pitch to produce briquettes which were then heated to eliminate volatile substances. During the carbonisation

the correct approach would be to apply the ‘double the risk’ test. This was notwithstanding concerns raised by the Supreme Court in Sienkiewicz that over reliance upon complex statistical evidence was unsatisfactory.

process a number of noxious fumes

Although medical evidence suggested

were created.

a link between fume and dust exposure

Swift J was satisfied that the hazards associated with production including the release of dust and fumes were well known and resulted in an obvious risk of injury.

She was critical of

the conditions at the plant and was satisfied that exposures had occurred in circumstances amounting to a breach of statutory duties.

Worthy of particular note is Swift J’s summary of legal causation especially with regard to the Claimants suffering with lung cancer. She gave a detailed analysis of

of

the

establishing

various

means

causation

where

competing causes (all 3 lung cancer Claimants had previously smoked) required consideration.

and bladder cancer and basal cell carcinoma, there was deemed to have been insufficient epidemiological evidence to link these illnesses to the Claimants’ employment. There was however, clear evidence of a link between the other non-malignant respiratory

conditions

to

the

Claimants’ occupational exposure.

The Court was invited to apportion exposure between tortious and nontortious sources so as to determine an appropriate reduction in the Claimants’ award of damages. Swift J rejected that approach.

She was satisfied

that the Defendants could have either wholly or virtually wholly avoided exposure taking place. She concluded there was insufficient evidence upon

After a detailed determination of

which to base any estimate of non-

the

following

tortious exposure. She was unwilling

recent decisions in Sienkiewicz v.

to reduce the exercise to guess work

law

on

causation

Our quarterly newsletter aims to highlight developments and recent case law in the areas of personal injury and insurance in a concise and readable style. We hope that you find it informative and useful.

In This Issue Double the Risk Causation test used for lung cancer claims Amended guidance on damages increase issued by the Court of Appeal Loss of future Earnings When should the Blamire approach be used?

DWP Fraud Seminar hosted

by Plexus Can a party be guilty of fraud by association?

Beware of low lying trolleys!

Injury to pupil was not reasonably forseeable Rylands & Fletcher - Fire is not “the thing” No recovery of outlay for damage caused by motorists deliberate act Partners Perspective

and in the circumstances made no

Amended guidance on damages increase issued by the Court of Appeal

and Punishment of Offenders Act.

her

On the 10th of October 2012 the

connection with the case

discretion under section 33 of the

Court of Appeal (COA) amended

Limitation Act 1980 to enable these

the guidance given in the case of

cases to proceed.

Simmons v Castle, in which general

such reduction.

Most of the lead Claimants had acquired knowledge more than three years prior to the issue of proceedings.

However,

Swift

J

exercised

Although the careful judgment is welcome, both sides of the fence will view the present position on legal causation in indivisible disease claims

damages, were increased by 10% in

Essentially this refers to Claimants who before 1 April 2013, entered into a CFA for the purposes of advocacy or litigation services in

• The 10% increase in general damages will apply to contract as well as tort claims

line with the proposals made by Lord

Further guidance was also provided

Justice Jackson. The changes are to

by the COA in relation to the types of

take effect from 1 April 2013.

general damages that would benefit from the 10% increase. These are :

with a degree of frustration. Insurers,

Following the original judgment of

whilst no doubt welcoming the court’s

Simmons v Castle, there had been

• pain, suffering

continued reluctance to extend the

concerns raised by the Association of

• loss of amenity

Fairchild exception to cases other

British Insurers (ABI) that applying a

than mesothelioma, will have an eye

blanket increase for general damages

on many other occupational lung

awards after April 1st 2013 would

cancer cases in the pipeline.

over

With medical science continuing to advance and with both sides keen to further develop the legal test on causation, it is questionable whether the

Phurnacite

judgment

will

be

a reference point for advisers on causation in the long term.

• social discredit

penalise Defendants where Claimants

• mental distress

had entered into Conditional Fee

• loss of society of relatives

Claimants

Agreements (CFAs) prior to that date.

In such cases Claimants would be able to recover the additional liabilities under CFAs and also benefit from the 10% rise. There was also some uncertainty

about

which

general

damages awards were included in the

for Energy and Climate Change (2)

10% increase.

For further information contact: David Jackson - Details on page 8

The ABI duly asked the COA to reconsider its original decision.

The amended guidance has addressed the ABI’s concerns and made two important changes:

• The 10% increase in general damages will not apply to those Claimants who fall within section 44(6) of the Legal Aid, Sentencing

02

discomfort

and

compensate

Jones & Others v (1) Secretary of State Coal Products Ltd [2012] EWHC 2936

• physical inconvenience and

The amended guidance has provided some

clarity

and

corrected

the

misalignment caused by the original judgment. However, it remains to be seen how the extensive reforms are going to work in practice.

Simmons v Castle & (1) ABI (2) APIL (3) PIBA (Interested Parties) [2012] EWCA Civ 1288 For further information contact: Helen Randall - Details on page 8

Loss of future earnings: When should the Blamire approach be used?

The Court of Appeal (COA) held

The Claimant (C) attained a First Class

really has no alternative.

degree in model making and hoped to

this requires a judge to make findings

In October Plexus Law hosted a

develop a career as a model maker in

on a Claimant’s future earnings but

presentation by Sharon Harris, the

the performing arts. On her second

for the accident and on a Claimant’s

Fraud Investigation Team Leader

day of a work experience placement

future earnings given the injury. The

at the DWP.

with the Defendant (D), C cut off the

burden in respect of both issues is on

index finger of her left (non-dominant)

the Claimant.

hand. The finger was reattached and

The trial judge’s findings of fact were

C made a reasonable recovery.

combating benefit fraud which

clear. He was not satisfied that C had

has

The medical expert found it difficult to

demonstrated that she would have

recent decades. Investigations

say what difference the injury would

established herself as a theatrical

are now much more reliant upon

make to her, but he accepted that her

model maker and nor had she proved

technology with the closer co-

career options had been “narrowed”

what career she would now follow.

operation with private financial

because she had lost her tripod grip

He was not even satisfied that C had

institutions,

and this affected her ability to do fine

proved that she would suffer any loss

playing

work.

of earnings.

successful detection of benefit

The trial judge found that the residual

It was held that the trial judge was

issues with the index finger were an inconvenience but she was not a “disabled” person. He was unable to predict C’s potential but he believed that she would earn more in other fields if she retrained. Following the Blamire principle, he awarded £30,000 to enable C to retrain and to be

C submitted that the judge had erred in declining to apply the conventional multiplier.

of

Instead

the

multiplicand/

she

must

methodology

and

Ogden

Tables

should be applied unless the judge

be

regarded as disabled and the correct

DWP Fraud Seminar hosted by Plexus

However,

She described the work carried out by their investigation team in changed

a

dramatically

such large

as part

in

banks, in

the

fraud.

driven to adopt the Blamire approach,

We

which was the correct method due to

colourful stories originating prior

the imponderables of the case. Whilst

to the electronic age when every

it was not necessary for the COA to

claimant had a benefits book

determine whether C was disabled,

which had to be removed to stop

Aikens LJ indicated that she didn’t

payments. Investigators reported

meet the conditions set out in the

many interesting sights when

Ogden tables.

looking through the letterboxes

This case is a useful reminder that

compensated during that exercise.

methodology

that that the multiplicand/multiplier

whilst

the

approach

multiplier/multiplicand should

generally

be

adopted, where there are too many imponderables a lump sum award is appropriate.

figure for loss of future earnings was

Ward v Allies & Morrison Architects

£176,633.46.

[2012] EWCA Civ 1287

also

heard

some

very

of claimants who refused to open their doors. None of the stories can be repeated in print, suffice it to say Sharon and her team are thankful that the technological advances have ended this part of their job.

For further information contact: Myles Harrison - Details on page 8

03

Can a party be guilty of fraud by association?

on C’s medical records in assessing

In Hussain v Hussain & Aviva, the Court

no evidence linking C to D except for

of Appeal (COA) overturned the trial

this RTA. There was no consideration

judge’s finding that the Claimant(C)

that his medical records may have been

in a road traffic accident had been

incomplete or that he had mixed up the

complicit with the Defendant (D) in

dates. There was therefore insufficient

claim for benefits. Many of the

making a fraudulent claim.

evidence to justify a finding that C had

tools and strategies adopted

Aviva’s (A) insured D collided with C

been fraudulent.

by the insurance industry are

resulting in a claim for vehicle damage,

equally of use to the DWP and

A high evidential burden is placed upon a

hire and general damages. A had

vice versa. Closer cooperation

party alleging fraud. The proven fraud of

numerous concerns about D including

between the DWP and other

one party will not establish that the other

a suspicious policy address, the

counter fraud operations can

party was fraudulent especially where

inception of the policy 2 days before

only help everyone in the fight

there is no evidence of a link between

the collision and 5 similar claims linked

against fraudulent claims.

them. Some evidential inconsistencies

to the same credit card and involving

will not of themselves be sufficient to

We look forward to closer ties

vehicles bought on hire purchase. C’s

prove complicity in a fraudulent claim. It

medical records contradicted his claim

is important to secure as much evidence

that he attended his GP 10 days post-

of all parties’ complicity in a fraud, rather

accident. There was also no reference

than just proving that some fraud has

to the RTA in the records.

occurred.

The trial judge had no doubt that D,

Hussain v Hussain & Aviva UK Insurance

who did not attend the trial, was

Ltd [2012] EWCA Civ 1367

Plexus have been working with the DWP to try and improve

communication

and co-operation in the fight against

fraud.

Fraudulent

claims for damages are often accompanied by a fraudulent

with the DWP and all counter fraud agencies in the future.

For further information contact Gary Petterson Details on page 8

engaged in fraud and that C was complicit. He concluded that C’s credibility was seriously damaged by

his credibility. C was found to be of previous good character and there was

For further information contact: Tim Short - Details on page 8

his medical records. He also applied the ‘follow the money’ rule, i.e. that the collision only made economic sense if C and D agreed to share the spoils. As a result C’s claim failed.

However, the COA allowed an appeal

by C. The COA held that although D was dishonest, it did not automatically follow that C was also dishonest and therefore the trial judge’s application of the ‘follow the money’ principle went too far. The COA also found that the trial judge had relied too heavily

Beware of low lying trolleys!

The Court of Appeal (COA) has handed down judgment in the appeal and crossappeal against the decision in Palfrey v WM Morrisons Supermarkets Plc. The Claimant (C) tripped over an L-shaped trolley with a low-lying horizontal platform used to move stock, sustaining injuries to her arms and shoulders. The trolley had been left in the centre of an aisle. The judge found that the design of the trolley 04

was safe. However, he held that the Defendant (D) was negligent in leaving the trolley unaccompanied. C was found 50% contributory negligent.

D appealed and C cross-appealed against this decision.

personal injury.

Palfrey v WM Morrisons supermarkets

had it been recorded. C’s incident was described as ‘impossible to predict.’

PLC [2012] CA

The Court of Appeal (COA) found that the

For further information contact: Philippa Bell - Details on page 8

circumstances of the first incident were completely different to C’s. In the earlier incident one pupil had carelessly pushed

The appeal was dismissed, but the cross appeal was allowed. The COA found that the trolley did constitute a hazard to the safety of those in the store. It was reasonably foreseeable that the attention of customers would be diverted to the shelves and so to a much higher level than the trolley.

The judge was right to hold the supermarket primarily liable for C’s injuries. However, this should have been on the basis that the design of the trolley and its position in the middle of the aisle amounted to a

Injury to pupil was not reasonably foreseeable

a door onto another pupil’s leg, causing a minor laceration.

The COA held that whilst C’s accident

The Claimant (C) was 15 years old and

was not impossible to predict, there

had attended the school for four years.

was only a ‘superficial similarity’ to both

She left a school building through

incidents and that the previous incident

a set of swing doors which opened

did not make C’s more serious and

outwards and which had a self closing

different injury reasonably foreseeable.

mechanism. There was a single step between the door and the ground. As C moved her foot from the step to the ground, the door closed and caught her heal causing a laceration.

‘The trivial nature of the earlier incident and the risk which it brought to light’ had to be seen ‘in the context of 30 years safe use of the doors’. Both the remedial action proposed and the timescale were

reasonably foreseeable risk of injury.

There were no previous recorded

therefore reasonable. The appeal was

The court reduced the initial finding of

incidents involving the doors, which

dismissed.

contributory negligence from 50% to

had been in place for 30 years and C

20%.

had used the doors without complaint

Whilst leaving a low lying trolley in the centre of an aisle was found to be dangerous in the circumstances, the COA took a cautious approach based on the specific facts of the case. Two key practical implications follow. The COA did not go as far as to say that such trolleys should never be used.

Nor did it find that supermarkets are under an obligation to position someone next to all trolleys, warning of

their

presence.

However,

this

on countless occasions. There had been one previous unrecorded incident four months earlier which had been investigated by the school caretaker.

He concluded that the risk factor was low and recommended that the step

Following shortly after the decision in Hammersley - Gonslaves v Redcar & Cleveland Borough Council (2012) (in which Plexus Law represented the successful appellant) these decisions of the COA demonstrate that courts should not place unrealistic burdens on schools.

be raised during the school holidays.

Richards v Bromley London Borough

This work could not be undertaken

Council [2012] EWCA Civ 1476

during the half term holiday after the

For further information contact: Simon Hills - Details on page 8

incident due to poor weather and was scheduled for the next holiday. The judge dismissed the claim.

judgment reminds supermarkets of

He concluded that whilst the first

the need to continue to assess and

incident should have been recorded

reassess their training systems and

and investigated by the school, in

methods for moving stock across

fact the caretaker had taken the

the shop floor to minimise the risk of

same action as he would have done 05

Rylands & Fletcher Fire is not “the thing” The Defendant (D) had operated a tyre supply/fitting business in close

• D’s use of the land was extraordinary and unusual

• Such an escape occurred and damage was caused as a result

physical proximity to the Claimant’s

Upon this basis they allowed the

(C)

Some

appeal and held that no liability arose.

3000 tyres were stored, many in a

In particular it was held that D’s use

adjoining

business.

somewhat haphazard manner. A fire commenced as a result of defective wiring to an appliance, and spread to C’s premises.

of the land was not exceptional and unusual and that critically upon the present facts, the thing, which had escaped, was fire and not the tyres

• The appeal was solely concerned with the application of the Rylands principle - it may be that any future claim would concentrate more upon the spread of fire. An allegation of negligence in relation to the risk caused by the manner of storage of combustible materials might be made upon particular facts. But possession alone of (say) tyres would not amount to negligence, and it would appear from

At first instance the claim failed in

and so key ingredients for Rylands

the analysis that such a finding would

negligence as it was held that the

strict liability were not made out.

require specific allegations supported

fire had occurred accidentally (that

Further upon the facts, fire was not a

by cogent evidence.

is without negligence) and so a

“thing” brought onto his land by D.

statutory defence arose under the

The practical implications arising from

Fires Metropolis Act 1776 s.86. It was further held that the fire had not spread as a result of negligence.

However

this decision are that:

• There is no special application of the

the claim succeeded upon the basis

Rylands principles to fire cases.

of “strict liability” following Rylands v

• Rylands strict liability should not

Fletcher (1868).

be seen as a routine basis for a

D appealed as to the true basis of

finding of liability, and will always be

liability arising under Rylands.

exceptional. This will necessarily be

The Court of Appeal reiterated the requirements for liability to arise under Rylands as considered by the House of Lords (HOL) in Transco v Stockport

above.

• Accidentally occurring fires are not

These were:

under Rylands or in negligence - the

• D must have brought onto the land an exceptionally dangerous or mischievous thing

• D did or ought to have recognised the risk of danger should “the thing”

For further information contact: Keith Gaston - Details on page 8

application of the criteria outlined

a basis for liability arising whether

land

EWCA Civ 1248

so from a proper understanding and

MBC(2003)

• D must be the owner or occupier of

Stannard t/a Wyvern Tyres v Gore [2012]

defence under s 86 of the 1776 Act remains relevant.

• The starting point for applying the Rylands principle was the HOL’s judgment in Transco. Older decisions such as Musgrove v Pandelis (1919) are strongly doubted.

escape 06

No recovery of outlay for damage caused by motorist’s deliberate act

exclude damage to goods carried for

EUI Ltd v Bristol Alliance Ltd Partnership

hire or reward or it can limit the use

[2012] EWCA Civ 1267

of the vehicle, for example, to social

For further information contact: Shaun Moyser - Details on page 8

A motorist, Mr Williams (W) attempted

onus is on the motorist to ensure that

to commit suicide by crashing his

the use to which he puts the vehicle

car into the House of Fraser store in

is covered by the policy. He has the

the centre of Bristol. He survived but

freedom to select a policy, which is

caused substantial damage to the

suitable for his use, and the premium

store.

he pays will reflect the risks, which are

His motor insurance policy excluded

domestic or pleasure purposes. The

covered.

cover for damage caused by his

Under section 151 an insurer must

deliberate act.

The store’s property

satisfy a judgment obtained by a third

insurer brought a subrogated claim

party subject to two preconditions.

against W and his motor insurer for the

The first is that the liability is required

recovery of its outlay. Judgment was

to be covered by a policy of insurance,

obtained against W.

which complies with section 145,

The motor insurer argued that it was not obliged to satisfy the judgment because it had no liability under the policy and only had to deal with the claim as an agent for the MIB under the Uninsured Driver’s Agreement 1999 (Article 75 insurer).

The MIB

scheme excludes subrogated claims for property damage.

and the second is that the liability is actually covered by the terms of the policy. In this case deliberate damage was not covered under the policy.

The property insurers therefore had no right of recovery directly against the motor insurer, which only had to handle the claim as Article 75 insurers.

The COA also concluded that the

At first instance Tugendhat J found in favour of the property insurers and held that section 145 of the Road Traffic Accident Act 1988 required the policy to cover any liability, which may

provisions of the RTA Act and the MIB arrangements satisfy the EU directives and that it was permissible under EU law for the MIB to exclude subrogated claims.

be incurred by the driver including

In the light of this case, where a policy

damage

The

excludes cover for damage caused

motor insurer therefore had to satisfy

deliberately

caused.

by a deliberate act, an insurer will not

the judgment as RTA insurer.

be required to indemnify the insured.

The Court of Appeal (COA) allowed the motor insurer’s appeal. Ward LJ held that not all damage to property had to be covered by the insurance policy.

A motor policy can for example,

However, where there is no subrogated claim the insurer will have to satisfy a judgment obtained by a third party as the Article 75 insurer under the MIB

If you have any suggestions for future issues, please email Karen Scott Knowledge Management Lawyer E: karen.scott@parabis.co.uk

scheme.

07

Partners perspective

Contacts

Kathryn Oldfield, Partner in the Catastrophic Loss Team, discusses abuse claims The pervasive and devastating impact of

and reasonable to hold a Defendant

abuse presents enormous challenges for

vicariously liable.

abuse victims. Inevitably for many they are often unable to seek legal redress until many years after the abuse took place.

Investigating

such

claims

years

later

provides a range of complexities.

In The Catholic Child Welfare Society and others v Various Claimants and The Institute of the Brothers of the Christian Schools and others [2012] the Supreme Court determined that

In recent cases the courts have addressed

the

the hurdles both parties face in resolving

association,

such emotive claims. Limitation issues were

vicariously

clarified by the House of Lords in A v Hoare

committed by the Brothers. The

[2008]. In determining date of knowledge

Court emphasised that the precise

a court will now consider the Claimant’s

criteria for imposing vicarious liability

actual knowledge and what he should

for sexual abuse are still in the course

have known. The question as to when he

of

could reasonably have been expected to

as in this case, the relationship

take steps to pursue his claim is one of

of being a member of a religious

the factors relevant in deciding whether to

order facilitated the commission of

exercise discretion. However this must be

abuse, it was appropriate to impose

balanced against the evidential difficulties

vicarious liability.

faced by a Defendant.

Institute,

an

unincorporated

should liable

refinement.

for

be

held

the

abuse

However,

where,

The courts have provided greater

The question of whether a Defendant

direction as to the circumstances

should be held responsible for the abusers’

in

torts was considered in Lister v Hesley Hall

succeed. Whilst the opportunity to

Ltd [2001]. The House of Lords confirmed

successfully defend such claims has

that a broad assessment of the nature of an

diminished, having greater clarity

employee’s employment should be adopted.

about the onerous responsibilities

An assessment should then be made as to

on a Defendant does enable such

whether the torts were so closely connected

claims to be assessed in a more

with their employment it would be fair, just

timely and cost effective manner.

which

such

claims

should

If you have any queries or require advice on any of the matters discussed in this issue, please see contact details below: David Jackson david.jackson@plexuslaw.co.uk DDI: 0844 245 5238 Helen Randall helen.randall@plexuslaw.co.uk DDI: 0844 245 4233 Myles Harrison myles.harrison@plexuslaw.co.uk DDI: 0844 245 5342 Gary Petterson gary.petterson@plexuslaw.co.uk DDI: 0844 334 1069 Tim Short tim.short@plexuslaw.co.uk DDI: 0844 334 1008 Philippa Bell philippa.bell@plexuslaw.co.uk DDI: 0844 245 4191 Simon Hills simon.hills@plexuslaw.co.uk DDI: 0844 245 4133 Keith Gaston keith.gaston@plexuslaw.co.uk DDI: 0844 245 4956 Shaun Moyser shaun.moyser@plexuslaw.co.uk DDI: 0844 245 4216 Kathryn Oldfield kathryn.oldfield@plexuslaw.co.uk DDI: 0844 245 5223

T: 0844 245 4000

www.plexuslaw.co.uk Offices in London, Leeds, Manchester and Colchester

Plexus Law is a trading name of Parabis Law LLP, a Limited Liability Partnership. Incorporated in England & Wales. Reg No: OC315763. Registered office: 8 Bedford Park, Croydon, Surrey CR0 2AP Parabis Law LLP is authorised and regulated by the SRA.