Legal Watch - Property - Issue 10

Legal Watch: Property Risks & Coverage December 2015 Issue 010

Introduction John Osborne had it wrong. So as we move into 2016, it has to

In this issue:

stalwart ‘Property Risks and Coverage Team’ here at Plexus

• Property Risks and Coverage seminar programme 2016

Despite a year marked by some obvious and undeniable

• Case Management/Relief from Sanctions Update

and have not waivered once in keeping their promises to our

• A contribution claim conundrum: where to sue?

doesn’t kill you makes you stronger”.

• The importance of issuing proceedings in the correct court

be all about looking forwards very positively for myself and my Law, as we now are.

turbulence, the PRC team members have continued to excel clients and to one another. And as someone once said, “what

In fact, that turbulence aside, 2015 has been another hugely

rewarding year in both terms of the work entrusted to us and the development of the team. We have seen new partners join,

• London iTree Urban Forest Survey • Riot Compensation Bill 2015-2106- Update

both organically, as in the case of Alison Heard, and through lateral gain, as in the case of Robert Kay.

The scope and scale of work undertaken has broadened and

deepened, with new panel status gains and the development of our international credentials. The team as a whole is now

recognised as a fully-fledged and leading unit in its sector by the major client guides. A great achievement for a team only formed through merger two years ago.

We in PRC look forward to 2016 and to continuing to do battle on behalf of you, our clients, with only renewed energy and

Contact us

If you would like any further information on the cases or articles featured in this issue, please contact: Paul Cha T: 0207 469 6235 E: Paul.Cha@plexuslaw.co.uk

determination and having been further forged by fire.

Robert Kay

Thank you for your undiminished support that we promise

T: 020 7469 6256

again to repay to you instruction by instruction.

E: Robert.Kay@plexuslaw.co.uk

Richard Houseago

Marise Gellert

Practice Head Property Risks and Coverage

T: 020 7469 6249 E: Marise.Gellert@plexuslaw.co.uk

This month we consider two recent cases on case

management/relief from sanctions. We also take a brief

look at the London iTree Urban Forest Survey and provide an update on the progress through Parliament of the Riot Compensation Bill 2015-2016.

Thanks go to Paul Cha for his article on XL Insurance Company SE (formerly XL Insurance Company Ltd) v AXA

Corporate Solutions Assurance and to Robert Kay for his article on when cases should be issued in or transferred to the TCC following the case of Chliaifchtein v Jessop.

Finally, set out below are details of our forthcoming

seminars, including our National Conference on 12 May 2016. The seminars are free to attend and will be followed by drinks. Please circulate the programme to any of your colleagues who may be interested in attending.

Here are the hyperlinks you can use to book your place: To book your place for our Leeds seminars email: kirandeep.kaur@plexuslaw.co.uk

To book your place for our London seminars email: Alison.Heard@plexuslaw.co.uk

To book your place for our Manchester seminars email: Chris.Heitzman@plexuslaw.co.uk

If there are any topics not currently on the Seminar Programme which you would find useful please let Alison Heard know so that we can add them to our next Seminar Programme.

01

Property Risks and Coverage seminar programme 2016 Date

Location

Seminar

To book your place

Wednesday

Leeds

Claims handling:

Email:

Radisson Blu Hotel

Obtaining and preserving evidence

kirandeep.kaur@plexuslaw.co.uk

1 The Light

Differences in Property Claims North

13 Jan 2016 5.30pm

The Headrow Leeds LS1 8TL

and South of the Border:

Key differences between Scottish and

English property damage claims across the major perils of floods, fires and defective products; limitation and costs.

Followed by drinks Thursday

London

Claims handling:

Email:

4 Feb 2016

Plexus Law

Obtaining and preserving evidence

Alison.Heard@plexuslaw.co.uk

5.30pm

Peninsular House 30-36 Monument Street London EC3R 8NB

Differences in property claims north and south of the border:

Key differences between Scottish and English property claims across the

major perils of floods, fires and defective products; limitation and costs.

Followed by drinks

02

Wednesday

Manchester

Insurance Act 2015:

Email:

24 Feb 2016

Plexus Law

The practical effect on claims handling

Chris.Heitzman@plexuslaw.co.uk

5.30pm

21st Floor City Tower Piccadilly Plaza Manchester M1 4BT

Insurance

conditions:

contract

terms

and

How to identify different terms in

insurance contracts, their legal effect, warranties – pre and post Insurance Act 2015

Third Parties (Rights Against Insurers) Act

Thursday 16 March 2016 5.30pm

Followed by drinks

Leeds

Fire claims:

Email:

Radisson Blu Hotel

Ignis suus

kirandeep.kaur@plexuslaw.co.uk

1 The Light

S86 Fires Prevention Metropolis Act

The Headrow Leeds LS1 8TL

1774 – accidental fires?

Rylands v Fletcher Causation Tactical considerations

Followed by drinks Thursday

London Stock Exchange

National Conference

Email:

12 May 2016

10 Paternoster Square

Speakers

Alison.Heard@plexuslaw.co.uk

1.30 pm –

London EC4M 7LS

Andrew Moncrieff (Hawkins)

7.00 pm

Graham Eklund QC (4 New Square) Catherine Rawlin (RGL) Imogen Swain (RGL) Robert Kay (Plexus Law)

Drinks and canapés reception

03

Case Management/Relief from Sanctions – Update R (on the application (1) Frank Kigen (2) Janet Cheruiyot) V

An inability to instruct solicitors because of a shortage of

Civ 1286

rules, and a litigant who was awaiting a Legal Aid Agency

Secretary of State for the Home Department [2015] EWCA This is a Court of Appeal decision in respect of a judicial

review that deals with the impact of delays caused while

awaiting decisions from the Legal Aid Agency on a relief from sanctions application. The Court of Appeal made it clear that, notwithstanding this was a judicial review case, the position was the same in public law and private civil law

funds was not a good reason for a failure to comply with the

decision was in essentially the same position as a litigant in person, following the case of ZP (South Africa) v Secretary of State for the Home Department [2015] EWCA Civ 1273.

Where solicitors were appointed, those solicitors had to

either take the necessary steps to lodge forms promptly, or advise their clients to lodge them themselves.

proceedings, so it is of wide application.

In this particular case the appeal was ultimately allowed,

Background

erred in other respects and the Court of Appeal exercised

The claimants’ application for permission to seek judicial review in respect of a refusal of permission to remain in

granting relief, but only because the first instance judge had discretion afresh.

the UK had been refused because it was submitted a day

Comment

reconsidered at an oral hearing. That application, which

applied for, or received, legal aid are in no different position

late because the claimants were awaiting a decision from

necessary to comply with deadlines or apply timeously for

late. They were also late in applying to have the refusal

The decision is helpful in showing that litigants who have

should have been made within 9 days, was made 13 days

from other parties and must take whatever steps are

the Legal Aid Agency about an amendment to their legal aid

extensions of time.

certificate. They therefore applied for an extension of time.

The judge refused, but granted permission to appeal.

The claimants submitted that litigants awaiting a Legal Aid

Agency decision were in a different position from litigants

in person and could not be expected to deal with matters themselves.

Appeal decision The Court of Appeal held the fact that a litigant was awaiting

a funding decision by the Legal Aid Agency was not a complete answer to his failure to comply with a procedural requirement but was simply a factor to be taken into account.

04

Case Management/Relief from Sanctions – Update continued Commissioner of Police of the Metropolis V Abdulle & Ors

claim was effectively ready for trial and was a substantial

[2015] EWCA Civ 1260

claim, it should be allowed to continue, albeit on terms.

Again, this was a Court of Appeal decision, this time in

On appeal it was argued that the loss of the trial date

for various failures to comply with directions, such that the

respondents’ default without good reason and outweighed

of discretion given to a first instance judge when deciding

into allowing the claim to proceed.

and the grounds upon which an appeal court could or

Appeal decision

relation to a first instance decision not to strike out a claim

was particularly serious. That had been caused by the

trial date was lost. The appeal raised the issue of the width

the reasons the judge had considered tipped the balance

whether or not to strike out a claim for procedural failures should interfere with that exercise of discretion.

Background

The Court of Appeal made it clear that had it been considering this application at first instance, it would have struck out the

claim. However, in a case management decision where the

The respondents had brought a claim against the appellant,

balance was a fine one, an appeal court should respect the

police officers had unlawfully detained and used excessive

shown that the decision of the judge at first instance was

the Commissioner of Police of the Metropolis, alleging that

balance struck by the first instance judge unless it could be

force against them. However, there was considerable delay

perverse.

in progressing the claim, much (but not all) of it attributable

to the respondents or their solicitors. A trial window was fixed but the respondents failed to file a pre-trial checklist

or pay the listing fee. They also failed to communicate with

the appellant regarding preparations for trial, including the

preparation of a bundle. The only reason the claim was not automatically struck out under CPR r.3.7(4), which provides automatic sanctions for the non-payment of certain fees,

including the listing fee, was because no notice of default had been served on the respondents, as was required pursuant to CPR r.3.7(2).

The trial date was vacated and the respondents failed to

comply with a costs order made against them. The appellant applied for the claim to be struck out under CPR r.3.4(2)(c),

on the basis that there had been a failure to comply with a rule, practice direction or court order; the failures to file the checklist, pay the fee or prepare a bundle.

At first instance the judge found that whilst the respondents’ solicitors’ behaviour was worthy of real criticism, as the 05

Here, it was not suggested that the judge had overlooked any relevant factor, or taken into account irrelevant factors,

nor was it suggested that the judge misdirected himself in law. The appellant’s submissions had concerned the weight the judge had attributed to the various factors that he did take into account in exercising his discretion.

The Court of Appeal made it clear that it would not lightly

interfere with a case management decision: that approach

applied to decisions to grant or refuse relief from sanctions under CPR r.3.9 and to decisions on whether to strike

out under CPRr.3.4(2)(c), following the cases of Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537, [2014] 1 W.L.R. 795 and Chartwell Estate Agents Ltd v

Fergies Properties SA [2014] EWCA Civ 506, [2014] C.P. Rep. 36.

“...where the balance

was a fine one, an appeal court should respect the balance struck by the first instance judge unless it could be shown that the decision of the judge at first instance was perverse.�

On that basis, the appeal was dismissed.

Comment This case makes it clear that the fact that in a finely balanced case others can disagree, is not sufficient to justify a decision being overturned; that is precisely the point of

the balance being ‘fine’ and it does not automatically render the first instance decision perverse.

06

A contribution claim conundrum: where to sue?

XL Insurance Company SE (formerly XL Insurance Company Ltd) v AXA Corporate Solutions Assurance [2015] EWHC 3431 (Comm).

An insured may sometimes find itself with the benefit of

more than one insurance policy covering the same loss, particularly in the case of multinational corporations which take out cover for their subsidiaries and affiliates under global programmes of insurance.

Typically, where such instances of double insurance arise

under liability policies, an insurer against whom the claim is made is liable to pay the full amount of the claim (as if

have been sued in France under Article 4 of Brussels I Recast. Article 4(1) of Brussels I Recast provides that:

“Subject to this Regulation, persons domiciled in a Member

State shall, whatever their nationality, be sued in the courts of that Member State.”

There are a number of exceptions to this general rule including as set out in Article 7(1) and (2) of Brussels I Recast. Article 7 provides that:

“A person domiciled in a Member State may be sued in another Member State:

his policy stood alone) but once paid he is entitled to an

(1) (a) in matters relating to a contract, in the courts for the

In XL v Axa such an issue of contribution arose.

(b) for the purpose of this provision and unless otherwise

equitable contribution from other insurers of the same loss.

Background On 12 September 2008, a train collision occurred in California involving a passenger train operated by Connex

– a Delaware company. Connex was an affiliate of Veolia – part of the French Veolia Group – and traded locally as Metrolink.

XL insured Metrolink (including Connex) under a local policy.

Axa (the French domiciled insurer) insured Veolia (including

Connex) under a separate policy. Injured passengers claimed against Connex in California.

XL (from London) paid its market share of the liabilities to Connex and Metrolink into an Interpleader fund (it was

accepted that payment into the fund was equivalent to the payment out to the insured). Axa refused to pay likewise on the basis that it was not liable under its policy.

XL subsequently commenced proceedings in England and claimed a contribution from Axa in respect of those elements which were double insured.

Axa challenged the jurisdiction of the English courts to determine such proceedings – and contended that it should 07

place of performance of the obligation in question

agreed, the place of performance of the obligation in question shall be:

• in the case of the sale of goods, the place in a Member State where, under the contract, the goods were delivered or should have been delivered

• in the case of the provision of services, the place in a

Member State where, under the contract, the services were provided or should have been provided

(c) if point (b) does not apply then point (a) applies (2) in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur”

Axa disputed the jurisdiction on the basis that the claim was a ‘matter relating to a contract’ (within Article 7(1)), i.e. the

underlying insurance contracts between XL and Axa and its respective insureds, and that the place of performance of the ‘obligation in question’ was not England.

Alternatively, it contended that the claim for contribution was

not a matter relating to ‘tort, delict or quasi-delict’ within

Article 7(2) but if it was then the place where the relevant ‘harmful event’ occurred was not England.

XL contended that its claim was one which related to ‘tort,

In his view, the contribution claim arose by operation of

event occurred was England. However, in the event that the

a refusal – it simply depended upon over payment where

delict or quasi-delict’ and that the place where the harmful

claim related to a contract, then the place of performance of the obligation was England.

In order to decide whether the court had jurisdiction under

Article 7(1) and Article 7(2), the judge considered the very nature of a contribution claim.

Was the claim a matter relating to a contract?

The judge noted that Axa did not have any contractual

law – which did not depend on a request for payment and there was another insurer. He refused to characterise the

‘overpayment’ as a ‘harmful event’. Accordingly, it was

not necessary for him to decide where the harmful event occurred.

Comment Axa (the French domiciled insurer) successfully challenged the jurisdiction of the English court to hear and determine the contribution proceedings brought by XL.

obligation to make any contribution to XL – the judge was

The judge considered the true nature of contribution

insured (‘somewhere in the background’) was relevant as it

insurance) and he gave some helpful insight in to the accrual

Accordingly, it could not be said that the claim was a matter

He concluded, in the light of conflicting judicial authority,

not persuaded that Axa’s underlying insurance with its

claims (which arise between insurers in the case of double

did not form the basis for the contribution claim in question.

of such causes of action.

‘relating to a contract’ and therefore it did not fall within Article 7(1).

Was the claim a matter relating to tort, delict or quasi-delict?

that contribution claims do not fall within either Article 7(1)

or Article 7(2) and therefore that any such claims against an insurer domiciled in a Member State must be made in the

courts of that Member State. It remains to be seen whether this important issue will be subject to an appeal.

The judge approached this question on the basis of seeking to identify the ‘harmful event’, i.e. some event caused by the

defendant which causes damage to the claimant, resulting

in a liability for the ‘harmful event’ – since if it was not possible to do so then that strongly suggested the matter was not covered by Article 7(2).

The judge took the view that it was not sufficient that there was some ‘harmful event’ in the background – i.e. the injuries caused to the train passengers by Connex / Metrolink.

“...it was not sufficient that there was some ‘harmful event’ in the background...”

08

The importance of issuing proceedings in the correct court In Chliaifchtein v Jessop [2015] EWHC 3167 (TCC), Coulson

Whilst CPR.r.30.3(2) sets out the relevant matters to be

(TCC), provided guidance on when to issue in or transfer to

transfer, the specialist nature of the TCC means that the

J sitting in the in the Technology and Construction Court the TCC.

Background The underlying facts of the case were complex, relating to a building project in Belgravia and Party Wall Act issues

between the neighbours. Thankfully, as Coulson J said,

“it [was] happily unnecessary to deal with very much of the detail”. The issue was whether to transfer the claim

for approximately £17,000 brought in the Central London

County Court into the TCC in the High Court. The basis of the application was there was a point of importance and complexity which justified its transfer.

Decision Coulson J’s comments regarding complex or difficult cases, are of particular interest. His Lordship held that:-

“As a general rule, basic costs considerations will usually

take precedence over points of alleged legal interest or

complexity. It is now very rare for claims worth less than

£250,000 to be allowed to remain here, and there are some who think that, with the increasing pressure on the resources

taken into account by the court when considering any existing practice is that only claims above £250,000 are

likely pass the threshold, subject to certain, non-exhaustive, exceptions. Namely:

• Cases involving adjudications, including enforcements and arbitrations, because of a need for judicial precedent

• International cases involving non-resident parties or foreign projects or developments

• Cases involving new or difficult points of law in TCC

business or which have issues of technical complexity suitable for a High Court judge

• Any test case or case which will be joined with others which will be treated as test cases (for example a fire

caused by an appliance or vehicle where the value of

the claim may not be that great but it may be joined with others in which similar points are taken) • Public procurement cases • Part 8 and other claims for declarations • Claims which cannot readily be dealt with in a county

court or civil justice centre by a designated TCC judge

in both the QBD and the Rolls Building, that cap will have to

• Complex nuisance claims brought by a number of

“As a general rule, basic costs considerations will usually take precedence over points of alleged legal interest or complexity.”

• Claims for injunctions

be increased”.

09

parties, even when the sums claimed are small

• If the case has been commenced in the TCC list in

London, the court will retain the case if there is a good reason so to do

Comment This case therefore provides a warning to claimants about

commencing or applying to transfer proceedings to the TCC in low value cases. It is unlikely that cases under £250,000

will be allowed to remain in the TCC in the Rolls Building or be transferred there (and that threshold may even increase): they can be commenced in the county court or a district

registry with a designated TCC judge. Accordingly, unless one or more of the above exceptions apply or there are other

very good reasons, basic costs considerations are likely to outweigh points of alleged legal interest or complexity.

This case serves as a salutary reminder that legal advice should be taken before commencing a claim; not just to

ensure the claim is well-founded but also that the correct venue is chosen. To do otherwise may be incurring costs

which are not just unnecessary but also unlikely to be recoverable.

010

London iTree Urban Forest Survey The results of the London iTree urban forest survey were

published on 2 December 2015 in the House of Lords. The

report is the culmination of years of work of a partnership project including Forestry Commission, Greater London

Authority, London Tree Officers Association, Trees for Cities,

Tree Council, Natural England and Treeconomics and is based on a field survey undertaken by volunteer teams during Summer 2014.

A random selection of 725 plots was chosen across inner, outer and greater London; these included any areas of an

urban forest (trees and shrubs in London’s parks, gardens,

woodlands and open spaces). Detailed records of trees

and vegetation within the plots were taken; those details including the stem diameter, tree height, size of tree canopy,

condition of the tree, land use, amount of shrub and ground cover.

A pdf copy of the report (which runs to some 84 pages) can be found at http://www.forestry.gov.uk/pdf/2890-Forest_ Report_Pages.pdf/$FILE/2890-Forest_Report_Pages.pdf The i-Tree project seeks to: • Promote London’s urban forest and the benefits it provides

• Provide a pan London picture of tree and woodland cover

• Engage volunteers in trees and further opportunities to plant and manage them

• Provide verifiable economic values to the benefits that the urban forest provides

• Establish values that are a pre cursor to proper asset and risk management

• Establish parity between the services that the

urban forest provides with other recognised urban

infrastructure such as street lighting and highways It remains to be seen how the results of this report will impact upon tree root subsidence and/or Tree Preservation Order 011

cases but it is likely only to be a question of time before it is referred to in expert evidence in relation to amenity value.

Riot Compensation Bill 2015-2106 – Update

Publications

The Bill continues to make its way through Parliament and

Weekly:

passed its second reading through the House of Commons

on 4 December 2015. The second reading is the first opportunity for MPs to debate the main principles of the Bill.

The Bill will now be committed to a public bill committee

where each clause and any amendments to the Bill may be debated. A date for the committee stage is yet to be

If you would like to receive any of the below, please email indicating which you would like to receive.

• Legal Watch: Personal Injury Monthly: • Legal Watch: Property Risks & Coverage Quarterly: • Legal Watch: Health & Safety

announced.

• Legal Watch: Professional Indemnity

As the Bill started in the House of Commons, it must pass

• Legal Watch: Disease

through all of the stages in the House of Commons before it progresses to the House of Lords and, ultimately, receives

Royal Assent. Clearly that will not now happen until 2016,

at the earliest, subject to debate in the two Houses and any subsequent amendment.

The Bill can be found at: http://www.publications.parliament. uk/pa/bills/cbill/2015-2016/0013/15013.pdf

We will report further significant developments as and when they happen.

Contact us For information on articles and cases featured in

other editions of Property Risks and Coverage Newsletters, please contact: Marise Gellert Partner T: 020 7469 6249 E: Marise.Gellert@plexuslaw.co.uk

www.plexuslaw.co.uk Plexus Law is a trading name of Plexus Law Limited, a limited company incorporated in England & Wales. Reg No: 09641584. Registered office: Renaissance, 12 Dingwall Road, Croydon, CR0 2NA. Plexus Law Limited is authorised and regulated by the SRA (SRA No. 626521)