Technical claims brief

Monthly update – December 2012

Contents
News 1
Ministry of Justice begins consultation on fixed recoverable costs for extended claims portal UK government considers young driver restrictions

1

2

Causation 3
Partial success for claimants in Phurnacite test case: Jones and Others v Secretary of State for Energy – High Court 2012

3

Liability 4
Court of Appeal gives guidance on Rylands and Fletcher: Stannard t/as Wyvern Tyres v Gore – Court of Appeal 2012 Injury to School pupil not foreseeable despite earlier accident: Richards v Bromley London Borough Council – Court of Appeal (2012)

4

5

Quantum 6
Record damages award for 17 year-old Tetraplegic: Collier and Others v Norton – High Court (2012)

6

Disclaimer 7

News Ministry of Justice begins consultation on fixed recoverable costs for extended claims portal
The Ministry of Justice (MOJ) has announced a consultation on the fixed recoverable costs to apply to the extended claims portal for personal injury claims. The consultation is to run until 4 January 2013 (a consultation on the rules of the extended scheme that will implement the changes is currently underway and is due to end on 23 November 2012). The MOJ plans to extend the current portal scheme, covering only Road Traffic Accident (RTA) cases between £1,000 and £10,000 in value, to cover RTA cases up to £25,000 in value and Employers Liability and Public Liability claims between £1,000 and £25,000 in value for accidents occurring from 1 April 2013. A review of the new costs regime is planned in April 2014 to see how it is bedding down. The proposed fixed recoverable costs for the portal scheme are set out in the tables here (the figures exclude VAT and disbursements). The consultation also proposes the introduction of fixed recoverable costs for liability claims of between £1,000 and £25,000 in value handled outside of the portal (see comparison table on the right).

MOJ proposed fixed costs for RTA and EL/PL Portal Scheme £1,000 to £10,000 in value
Stage 1 RTA Claims EL/PL Claims £200 £300 Stage 2 £300 £600 Total £500 £900

MOJ Proposed Fixed Costs for RTA and EL/PL Portal Scheme £10,000 to £25,000 in value
Stage 1 RTA Claims EL/PL Claims £200 £300 Stage 2 £600 £1,300 Total £800 £1,600

Stage 3 costs will remain at £250 for a ruling without representation and £500 for a hearing. Comparison with proposed fixed costs outside of portal (Courtesy of ABI)
RTA Portal Claims value £2,000 £7,500 £25,000 £500 £500 £800 £550 £1,475 £3,430 £900 £900 £1,600 £1,300 £2,167.50 £4,000 £900 £900 £1,600 £1,300 £2,105 £3,870 Non Portal Portal EL Non Portal Portal PL Non Portal

Comment: The costs regimes set out above could produce substantial savings on costs compared to the current costs regime. These should not however be viewed in isolation from general claims inflation and those parts of the Jackson reforms intended to assist claimants (10% increased general damages, Qualified One Way Costs Shifting, 10% on damages where Part 36 offers beaten by claimant etc).

Time scales for the introduction of the extended portal and for the non-portal fixed costs regime remain very tight but the MOJ appears to be committed to the April 2013 deadline. The costs proposals are a major step forward in the implementation of these reforms.

1 Technical claims brief, monthly update – December 2012

Comment: Young driver restrictions are already in force in the USA and other countries preventing them from driving at night and limiting the passengers that they can carry. The Institute of Advanced Motorists has spoken against restriction saying that this would prevent young drivers from getting the driving experience that would make them a safer driver.

UK government considers young driver restrictions
Transport Secretary Patrick McLoughlin is reported in the Daily Telegraph as saying that he is looking at ways to reduce the number of road deaths involving newly qualified drivers. He is considering suggestions put forward by the Association of British Insurers (ABI) whose statistics show that drivers aged 17-24 are responsible for a disproportionally high number of accidents. Only 1 in 8 UK drivers are under 25 but they make up a third of drivers killed in road traffic accidents.

The ABI believes that peer pressure from passengers can lead young drivers to take risks that their lack of driving experience cannot cope with. They have suggested restrictions on which passengers newly qualified drivers could carry and the introduction of a graduated licence for the first six months after passing a driving test. New drivers could be stopped from carrying passengers at all for six to nine months after passing or only be allowed to carry family members. The Ministry of Transport has said that whilst improving the safety of young drivers is a priority there are no plans to introduce graduated licensing for England and Wales.

2 Technical claims brief, monthly update – December 2012

Causation Partial success for claimants in Phurnacite test case: Jones and Others v Secretary of State for Energy – High Court 2012
The High Court has handed down Judgment in eight of 250 registered claims in a test case for workers who suffered respiratory disease and skin, lung and bladder cancer allegedly due to exposure to dust and fumes at a plant producing smokeless fuel. The smokeless fuel’s brand name was Phurnacite. It was made from coal dust and pitch. Conditions in the factory, which operated from 1942 until 1990, were so poor that monitoring equipment could barely cope with the levels of dust and fumes and even internal management reports referred to the dreadful conditions in some parts of the factory. It was well known by 1942 that exposure to coal dust could cause pneumoconiosis and awareness of the hazards of exposure to volatile hydrocarbons (generated in the manufacturing process) was developing. The claimants alleged negligence and breach of statutory duty on the part of their employers. The defendants were held to be in breach of the Patent Fuel Manufacture (Health and Welfare) Special Regulations 1946, the Factories Act 1937 and/or Factories Act 1961 and the Control of Substances Hazardous to Health Regulations 1988. Given the statutory breaches there was no need to address negligence. The court was particularly critical of the reactive rather than proactive approach to safety and of management’s failure to provide respiratory protective equipment,

which even by the 1950s could have provided significant protection. Causation was more difficult to deal with. The three lead claimants who had contracted lung cancer had all smoked and been exposed to environmental carcinogens outside of the work place. Levels of exposure to fumes and dust varied depending on whereabouts in the plant the claimants had worked. Applying a test of whether the occupational exposure had doubled the risk the Judge found that two of the three lung cancer claimants were entitled to damages. There was insufficient evidence to establish a link between occupational exposure and bladder and basal skin cancer but there was a strong link to squamous cell skin cancer. In total, four of the eight lead claimants recovered damages. The majority of the claims were outside of the limitation period but the judge exercised her discretion under the

Limitation Act 1980 to allow the claims to proceed. Comment: The cancer claimants were unable to prove that their illness developed due to exposure to carcinogens at the factory but nonetheless succeeded in their claims on the basis that the exposure had caused a doubling of the risk. This may well form the basis for future claims from cancer victims who have suffered occupational exposure to carcinogens.

3 Technical claims brief, monthly update – December 2012

these were not of themselves dangerous or mischievous. There was no evidence that Stannard should have been aware of an exceptionally high risk if the tyres escaped. In any event, they did not escape the fire did! For a tyre fitter to keep a stock of tyres on his land could not be said to be an extraordinary or unusual use. Comment: The Court of Appeal’s decision brings useful clarity to the principle in Rylands and arguably reduces its scope, at least so far as fire claims are concerned. Lord Justice Ward commented that the moral of the story was to make sure you had insurance cover for fire. We heartily agree.

Liability Court of Appeal gives guidance on Rylands and Fletcher: Stannard t/as Wyvern Tyres v Gore – Court of Appeal 2012
Mr Stannard was a tyre fitter who had accumulated several thousand tyres on his land. The tyres caught fire and the fire spread to the (uninsured) premises of his neighbour Mr Gore completely destroying them. Gore sued Stannard for his losses. The judge at first instance found that Stannard had not been negligent as the fire had started through no fault of his but he was strictly liable under the rule in Rylands and Fletcher. Tyres once ignited burn very fiercely and are difficult to extinguish. Coupled with the large numbers of tyres stored this constituted an exceptionally high risk that Stannard should reasonably have recognised and constituted a “non-natural use” of the land.

Stannard appealed to the Court of Appeal, which carefully considered the criteria for the application of strict liability under Rylands. These were: • The defendant must be the owner of the land • He/she must bring or keep an exceptionally dangerous or mischievous thing on his land • He/she must have recognised or ought reasonably to have recognised that there was an exceptionally high risk if that thing escaped however unlikely an escape was • The use of the land was, in the circumstances, extraordinary or unusual • The thing must escape onto the property of another. The Court of Appeal held that the rule in Rylands did not apply. The “thing” brought on to the land were tyres and

4 Technical claims brief, monthly update – December 2012

Injury to School pupil not foreseeable despite earlier accident: Richards v Bromley London Borough Council – Court of Appeal (2012)
The claimant suffered a cut to her heel requiring five stitches, when she was struck by one of a pair of swing doors with a self-closing mechanism at the school where she was a pupil. The doors had been in place for 30 years without any recorded accidents and the claimant herself had passed through them safely many times. There had been one other incident four months earlier when a pupil had suffered a minor injury to her heel when one of the doors was pushed into her. This incident had been investigated by the site manager but not recorded. The site manager recommended that remedial work be carried out but this had not yet been done at the time of the material accident. The claimant argued that the investigation into the first accident was inadequate and that had it been recorded and investigated properly, appropriate action would have been taken to prevent a recurrence. The judge at first instance disagreed finding that a record of the first accident would not have led to any different action by the defendant local authority and that the second accident was impossible to predict. The claimant appealed arguing that the material accident had been reasonably foreseeable and that the defendant had failed to take reasonable steps to eliminate or reduce the risk. The Court of Appeal held that whilst the material accident was not impossible to foresee, the first accident did not make it reasonably foreseeable. The first accident involved one pupil pushing a door into another and so was only superficially similar to the material accident. The school faced with knowledge of a very minor injury occurring with doors that had been in situ for so long had not been unreasonable in the remedial action and timescale they proposed. It was simply unfortunate that the claimant had suffered a painful injury before the remedial work could be done and she had the court’s sympathy but this did not justify an award of damages. Comment: As the Court of Appeal said in its judgment, it has to be understood that not every misfortune occurring on school premises attracted compensation and the law of tort should not be subverted by sympathy for the claimant.

5 Technical claims brief, monthly update – December 2012

Quantum Record damages award for 17 year-old Tetraplegic: Collier and Others v Norton – High Court (2012)
A 17 year-old girl who was rendered a partial tetraplegic in a car crash has been awarded damages of £7.25m lump sum in addition to a Periodical Payment Order (PPO) for £270,000 a year for life (indexed to carers’ wages). Her solicitors estimate that the total award could be worth £23m, a figure that has been widely reported in UK newspapers.

The claimant has lost the use of her legs and has little remaining function in her arms. She will need extensive care for the rest of her life, which the periodical payments will fund. Comment: The value of a PPO award depends on how long the claimant lives (payments cease on their death) and the performance of the Annual Survey of Hours and Earnings index which is used to adjust the payments annually to take into account changes in carers’ wages. This makes the true value of a PPO difficult to predict. A figure of £23m is likely to be at the top end of potential values but this is

nevertheless a huge award and illustrates just how big a claim from a single young claimant with spinal injuries can be.

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Completed 26 November 2012 – written by and copy judgments and/or source material for the above available from John Tutton (contact no: 01245 272 756, e-mail: john.tutton@uk.qbe.com).

Disclaimer
This publication has been produced by QBE Insurance (Europe) Ltd (“QIEL”). QIEL is a company member of the QBE Insurance Group. Readership of this publication does not create an insurer-client, or other business or legal relationship. This publication provides information about the law to help you to understand and manage risk within your organisation. Legal information is not the same as legal advice. This publication does not purport to provide a definitive statement of the law and is not intended to replace, nor may it be relied upon as a substitute for, specific legal or other professional advice. QIEL has acted in good faith to provide an accurate publication. However, QIEL and the QBE Group do not make any warranties or representations of any kind about the contents of this publication, the accuracy or timeliness of its contents, or the information or explanations given. QIEL and the QBE Group do not have any duty to you, whether in contract, tort, under statute or otherwise with respect to or in connection with this publication or the information contained within it. QIEL and the QBE Group have no obligation to update this report or any information contained within it.

To the fullest extent permitted by law, QIEL and the QBE Group disclaim any responsibility or liability for any loss or damage suffered or cost incurred by you or by any other person arising out of or in connection with you or any other person’s reliance on this publication or on the information contained within it and for any omissions or inaccuracies. QBE Insurance (Europe) Limited and QBE Underwriting Limited are authorised and regulated by the Financial Services Authority. QBE Management Services (UK) Limited and QBE Underwriting Services (UK) Limited are both Appointed Representatives of QBE Insurance (Europe) Limited and QBE Underwriting Limited.

7 Technical claims brief, monthly update – December 2012

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4097/technicalclaimsbrief/december2012 QBE European Operations is a trading name of QBE Insurance (Europe) Limited and QBE Underwriting Limited. QBE Insurance (Europe) Limited and QBE Underwriting Limited are authorised and regulated by the Financial Services Authority. QBE Management Services (UK) Limited and QBE Underwriting Services (UK) Limited are both Appointed Representatives of QBE Insurance (Europe) Limited and QBE Underwriting Limited.

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