QBE Technical Claims Brief November 2011

7/28/2019 QBE Technical Claims Brief November 2011

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Contents

News 1

Supreme Court Rejects Insurers

Appeal on Scottish Pleural Plaques 1

Seventh Edition of the Ogden

Tables Published 2

Costs 3

Costs of Arranging Funding notRecoverable: Motto and Others

v Trafigura -Court of Appeal (2011) 3

Fraud 4

Family Jailed over exaggerated Claim:

Lane v Shah District Court (2011) 4

Liability 5

Cycling Helmets, Team Bonding

Event not in Course of Employment:

Reynolds v Strutt and Parker LLP

High Court (2011) 5

Unlikely Manner of Injury no Defence

for Employers: Hadlow v Peterborough

City Council- Court of Appeal (2011) 6

Motorcyclist jumping the queue

80% liable: Burton v EvittCourt

of Appeal (2011) 7

Procedure 8

Issue of Proceedings to Secure

Interest on General Damages Unjustified:

Kyle v Crabtree and Crabtree t/as Cedar

Grange - Halifax County Court (2011) 8

Disclaimer 9


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1

News

Supreme Court RejectsInsurers Appeal on ScottishPleural Plaques

The Supreme Court has rejected the

appeal brought by four insurers seeking

to have the Damages (Asbestos

Related Conditions) (Scotland) Act2009 declared unlawful.

The appeal against the decision of the

Inner House of the Court of Session

(see May 2011 Brief) was based on the

arguments that the Act was a breach

of the European Convention on Human

Rights and that it was so irrational as to be

invalid at common law.

The Supreme Court found against

the insures holding that the Scottish

Government were not acting unreasonablyin trying to address what they saw as

a social injustice. The Act reverses the

House of Lords decision in Rothwell v

Chemical Insulating Co for the Scottish

jurisdiction and means that individuals with

pleural plaques and other asymptomatic

conditions will be able to obtain

compensation. Prior to the decision

in Rothwellpleural plaques had been

actionable for many years and the Act to

a large degree simply restored thepre-

Rothwellposition.

There are reported to be around 800

litigated plaque cases in Scotland, which

were awaiting the Supreme Courts

decision and, barring a further appeal to

the European Court of Human Rights,

these can now proceed to settlement.

Similar legislation introduced by the

Northern Ireland Assembly can also now

progress to enactment.

Comment: the financial impact of the

decision is difficult to calculate, as the

number of cases that will be brought and

the precise level of damages that will be

awarded are both unknown. Damages

estimates vary from around 5,000 to

nearly 20,000 and estimates of the total

cost over the next two decades range

from 76m to 607m.

Pleural plaques and other asymptomatic

conditions remain unactionable in England

and Wales and claimants exposed to

asbestos there are now likely to try to find

grounds on which to bring their plaque

claims in one of the a jurisdictions where

they can obtain compensation.


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2

Seventh Edition of theOgden Tables Published

The seventh edition of the Ogden tables

(statistical tables used to calculate thevalue of future losses on a lump sum basis)

was published on the 10th of October

2011. The tables reflect the Office of

National Statistics (ONS) data gathered in

2008, which shows increased UK longevity

when compared to the 2004 data on

which the sixth edition was based. The

increased longevity has led to a modest

rise in multipliers, which in turn will lead to

a similar rise in lump sum settlements.

The tables also now show a wider range of

discount rates (used to offset investment

return) of -2% to +3% to allow for a

possible reduction in the rate following

pending reviews of the rate in England andWales, Scotland and Northern Ireland.

The definition of disability has been

slightly amended in line with the Equality

Act 2010 although there remains a lack of

clarity and guidance on the definition.

The foreword to the seventh edition refers

to the need for a substantial re-write of the

Explanatory Notes and anticipates that this

will be included in the eight edition due to

be published in the autumn of 2012.

Comment: this edition of the tables is

something of an interim measure with

the major re-drafting of the guidance

notes deferred and further amendments

to reflect increasing longevity expected.The increasing number of years that the

UK population can expect to live after

retirement age, which is reflected in

the seventh edition, is likely to be most

conspicuous in loss of pension claims.

Our thanks go to Berrymans Lace Mawer

solicitors for sharing their analysis of the

tables with us.


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3

CostsCosts of Arranging Fundingnot Recoverable: Motto andOthers v Trafigura -Court ofAppeal (2011)

The Court of Appeal has ruled on a

number of costs issues following an

appeal by the defendants against the

findings made in the early stages of

detailed assessment.

Perhaps the most significant aspect of

the ruling was that the claimants were

not entitled to recover the costs of their

solicitors preparing and advising on the

Conditional Fee Agreements (CFAs)

or setting up After the Event insurance

policies (ATEs).

..I do not consider that the

claimants can recover the costs

of preparing and advising on the

CFAs, nor do I consider that

they can recover any costs

incurred in discussing the litigation

with, or taking instructions from,

the ATE insurers.

Lord Neuberger

Master of the Rolls

Comment: this case involved costs in

excess of 104m including an ATE of

9.7m but the ruling will apply equally

well to more modest costs and is likely

to reduce the cost of litigation in

England and Wales.


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Fraud

Family Jailed overexaggerated Claim: Lane v

Shah District Court (2011)The claimant Mrs Shah, her husband and

22 year-old daughter were all jailed for

contempt of court after signing statements

of truth in support of documents they

knew to be untrue. The claimant had

brought a grossly exaggerated claim for

more than 600,000 and served a number

of witness statements in evidence. When

the defendants insurers Liverpool Victoria,

discovered the extent of the exaggeration

they successfully applied to the court for

the claimant, her husband and daughter to

be committed for contempt of court.

The Shahs admitted that they had

deceived the court but asked that anysentence should be suspended in light of

their previous good character and remorse.

The two judges hearing the case rejected

this approach and sentenced Mrs Shah to

six months imprisonment and her husband

and daughter to three months each. In

explaining the sentences the judges stated

that those who made false claims such

as these, if caught, should expect to go

to prison and that imprisonment was

essential to deter exaggerated claims

and in the interest of justice.

Comment: insurers have been calling

for a more robust line from the courts

on fraudulent exaggeration for some

time and the comments of the judges

in this case suggest that these callshave at last been heeded.


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Liability

Cycling Helmets, TeamBonding Event not in Courseof Employment: Reynolds vStrutt and Parker LLP HighCourt (2011)

The claimant suffered a serious brain

injury when he fell from his bicycle aftercolliding with a colleague during a race

organised by his employers, as part of a

team-building day. The claimant was not

wearing a helmet even though they were

available to any participant who wanted

one and expert evidence stated that he

would have been unlikely to sustain the

injuries he had if he had been wearing one.

The claimant brought proceedings against

his employers alleging breach of both

common law and statutory duty.

The judge held that none of the

participants in the race was acting in the

course of their employment and it was not

just and reasonable to hold that there had

been a breach of statutory duty. There had

however, been a breach of common law

duty, by the organisers of the event who

had not carried out a sufficient and suitable

risk assessment. The organisers lacked the

necessary skill and experience to assess

the risk and had failed to take the obvious

step of asking the operators of the countrypark, where the race was held, for advice.

Had this advice been obtained then the

organisers would have appreciated the

need to insist that helmets were worn.

Two-thirds contributory negligence was

found on the part of the claimant who

was an experienced cyclist and who

had opted not to wear a helmet even

though he must have known that they

were readily available.

Comment: in many previous cases, a

wide interpretation of whether an

employee was acting in the course of his

or her employment has been adopted

by the courts. It is noteworthy that in this

case, course of employment was not

found to extend to the teambonding

event. The case is also noteworthy for the

high degree of contributory negligence

assessed in respect of a failure to wear

a cycle helmet.


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Unlikely Manner of Injuryno Defence for Employers:Hadlow v PeterboroughCity Council - Court ofAppeal (2011)

The 63-year old female claimant worked

as a teacher in a secure school and

childrens home for teenage girls with

behavioural issues. The policy of theinstitution was that no staff member

should be left alone with more than two

pupils because of the danger of assault.

On the day of the accident, the claimant

was due to teach three girls in a locked

classroom. The teaching assistant who

was to accompany her was late. The

claimant, who had been assaulted

previously, had agreed with the teaching

co-ordinator that another member of staff

sit in her class until the delayed teaching

assistant arrived.

When the three pupils were brought to the

classroom however, their two escorts both

left, leaving the claimant alone with the

pupils. The claimant hurried to the door to

call the escorts back but fell over a chair

and broke her hip.

At first instance, the judge found for the

claimant. The claimants employers had

been negligent in failing to follow their own

policy and the claimant had been trying to

rectify the situation when she was injured.There was a direct causal link between

the claimant being left alone and her injury

and the fact that the manner of her injury

was not the expected one was immaterial.

The defendants appealed arguing that the

injury was not reasonably foreseeable and

that the claimant had broken the chain of

causation when she fell over.

The Court of Appeal upheld the trial

judges decision. The accident had not

happened in the most likely manner i.e.

an assault by pupils but had occurred

due to the claimant trying to rectify her

employers breach of duty. The judge had

applied the correct test. A risk of injury

was foreseeable and was caused by the

employers breach of duty.

Comment: where injury is foreseeable

following a breach of duty and a direct

causal link established, the fact of it being

caused in a manner that was not the

obvious or expected one does not provide

a defence.


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Motorcyclist jumping thequeue 80% liable: Burton vEvitt Court of Appeal (2011)

The defendant car driver was in front of

a queue of traffic and attempted to turn

right into a car park. As he did so, a

motorcycle that had overtaken the traffic

queue struck his car resulting in the rider

being seriously injured.

At first instance, the car driver was foundto be one third liable. He had been unable

to see the motorcyclist approaching due

to a large vehicle behind him and should

have moved towards the centre of the

road so that he could see any overtaking

traffic in his wing mirror before turning.

The motorcyclist was driving at an unsafe

speed. He was unable to deal with any

emergency such as a car pulling out and

was held to be two thirds liable.

The car driver appealed arguing that he

had slowed down and checked prior to

commencing his turn and that to require

more was a counsel of perfection. The

Court of Appeal held that the car driver

could not escape negligence. Both

parties agreed that the nature of the road

meant that motorists should be aware

of the possible presence of overtaking

motorcyclists and should check carefully

for them. The car driver had been unable

to see behind him and should have inched

out. The motorcyclists negligence was

however of a very high order and the

issue of blameworthiness had not

been given adequate analysis by the

trial judge. The judges apportionment

was set aside and replaced with an

80/20 apportionment in the

car drivers favour.

Comment: overtaking is a hazardous

manoeuvre especially when done at

speed. It is not unusual for the courts to

find that the majority of liability rests with

the overtaking vehicle in this scenario. The

exact apportionment will however depend

on the specific circumstances of the case.


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Procedure

Issue of Proceedings toSecure Interest on GeneralDamages Unjustified: Kylev Crabtree and Crabtree t/as Cedar Grange - HalifaxCounty Court (2011)

The claimant was injured in an accidentat work. Liability was admitted within

the period specified by the pre-action

protocol. The amount of damages had

not yet been agreed but it was common

ground between the parties that the case

was likely to be allocated to the fast track

once proceedings were issued.

The claim had not been contentious and

the defendants had not felt the need to

instruct solicitors but this changed when

the claimants solicitors wrote to the

defendants demanding that they agree to

pay interest on the general damages claim

from the date of the letter, failing which

proceedings would be issued.

The defendants responded firstly by

offering an interim payment and then by

offering to agree the amount of general

damages and to settle that part of the

claim. The claimant responded by issuing

proceedings. At this point, the defendants

instructed solicitors who applied to the

court to impose sanctions under the pre-action protocol, for premature issue.

Given the reasonable behaviour of the

defendants, the judge could see no

justification for the issue of proceedings

and held that they offended against the

principles of the pre-action protocol

the purpose of which was to avoid

proceedings. It was not right, reasonable

or proper to issue proceedings in the face

of the defendants admission of liability

and willingness to negotiate on quantum,

simply to protect a claim for a nominal

sum in interest.

The judge was not prepared to deprive the

claimant of her entitlement to interest nor

to impose the harsh sanctions permitted

under the protocol because it was her

solicitors not her who were at fault but

he did order that the claimant pay all the

costs incurred by the defendants to date.

Comment: in the June 2010 edition of

the Bulletin we reported on the case of

Derek Pelling v Don Valley Engineering

Co where the court held that the claimant

was entitled to issue proceedings simply

to secure interest on general damages.

The Kyle case can now be cited to

challenge that approach especially

where a defendant has acted in such

as accommodating way with regards

to interim payments.

Thanks to Browne Jacobson solicitors

who acted for the defendants for telling

us about this case.


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9

Completed 25 October 2011 written

by and copy judgments and/or source

material for the above available from

John Tutton (contact no: 01245 272 756,

e-mail: [email protected]).

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 persons

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.


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QBE Technical Claims Brief November 2011