Welcome to the March edition of Disease-i; the publication for busy disease practitioners!

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1 Welcome to the March edition of Disease-i; the publication for busy disease practitioners! We always enjoy hearing from our readers, so if you have any suggestions for topics or experiences to share, please us at The market place Exploring Alternative Business Structures increasing their share of the personal injury claims market, fixed costs on all fast track cases and on line dispute resolution, portal figures for disease claims, hearing aids, court fees, increasing payments under Mesothelioma Act, Insurance Claims Fraud Taskforce and Section 57 Criminal Justice and Courts Act. Case law update Covering William Campbell v Peter Gordon CSIH 3 February 2015, Cahill v Thomas Burnley & Sons Ltd, Dalton & Ors v British Telecommunications Plc and Knauer v Ministry of Justice. On the horizon Looking at Hearing loss, research into mesothelioma, diesel fuel emissions, Insurance Act 2015 and asbestos in buildings.

2 The market place Alternative Business Structures increasing their share of the personal injury claims market A report from the Institute and Faculty of Actuaries estimates that ABSs account for one-third of all turnover in the personal injury market. As claims management companies have declined since LASPO ABSs have increased, there are now over 350 ABS firms. More consolidation of the disease claims market is imminent. Slater & Gordon have also announced that they are acquiring north-west firm Walker Smith Way and Cardiff practice Leo Abse & Cohen. The total spent on both acquisitions will be 18.7m. Slater & Gordon is in negotiation with Quindell with regard to acquiring Quindell Legal Services (which includes the practices of Silverbeck Rymer, Pinto Potts and The Compensation Services, as well as the legal costs practice of Compass Law and the brands Accident Advice Helpline and Fast Claim PPI). It has been reported that in addition to the purchase price Quindell will receive 50% of costs received from its current book of NIHL claims. High volumes of disease claims, particularly noise induced hearing loss, continue with a significant proportion of claims being handled by a small number of claimant firms. Aviva reported it received over 11,000 NIHL claims in 2014, a fourfold rise since 2009 and that legal fees accounted for approximately 70% of overall settlement figures. The way forward - fixed costs on all fast track cases and on line dispute resolution? Lord Neuberger has called for fixed costs to be extended to all fast track cases and to smaller multi track cases to achieve cost control and proportionality. He has also asked the Civil Justice Council to consider online dispute resolution which would enhance access to justice. He noted that an online dispute resolution scheme used for ebay disputes had proved itself to be cheap, quick and successful. He said that although fixed costs represent significantly rougher justice than the costs management route, they have the advantage of consistency across the system and no extra costs and time in preparing and considering costs budgets. Such a move would be welcome for disease claims in particular where volumes are increasing but the vast majority of claims still fall to be dealt outside the fixed fee regimes applicable to personal injury claims of equivalent value. Portal figures for disease claims January saw 1,841 disease claims submitted to the Portal, bringing the overall disease claims submitted to 21,032. This contrasts to nearly 60,000 employers liability accident claims submitted. The rate of disease claims leaving the Portal process is just over 78% (16,423) with defendants/insurers unable to provide a liability response within the time allowed in over 37% of those claims. It is also significant that in over 25% of cases there was an incomplete CNF or further investigation required suggesting once again that amendments are required to the process to enable disease claims to be dealt with both speedily and simply. The average payment for general damages in January was 4,384. Payments for general damages in disease cases have remained relatively steady staying under 5,000 since May 2014.

3 Expanding and adapting the Portal to make disease claims simpler and quicker to settle would reverse the current trend of the limited number of disease claims brought to a conclusion within the Portal. Hearing Aids North Staffordshire Clinical Commissioning Group (CCG) has announced that there will no longer be NHS funded hearing aids for those diagnosed with mild deafness in their commissioning area. This will apply to those scored at less than 40 decibels in audiology tests. However the service will be continued for those with moderate hearing provided they satisfy an assessment on the functional impact of living without an aid. Those who no longer qualify, which will include patients whose deafness causes inattention and difficulty in suppressing background noise, will be advised of the option to pay for private hearing aids. Watch out for these features being quoted in support of claims for hearing aids. Court fees Court fees for personal injury claims were increased with effect from 9 March notwithstanding a challenge from the Law Society, who, in conjunction with other interested parties, sent a letter before action to the MoJ seeking to challenge the decision by judicial review if necessary. Fees remain unchanged for claims up to 10,000. The big change is for higher value claims.

4 A mesothelioma claim seeking 200,000 will attract the maximum fee of 10,000 adding 8,720 to the overall costs of the claim. A fee for a claim for damages not exceeding 25,000 for noise induced hearing loss increases from 610 to 1,280. Payments under Mesothelioma Act to increase The government has announced that it will increase the tariff of payments made under the Diffuse Mesothelioma Payment Scheme from 80% of average civil claims to 100% for those diagnosed on or after 10 February The number of claims made since the scheme launched last year have been less than half the anticipated number. The scheme is of course a scheme of last resort and there is concern that the increase in the tariff will result in claimants seeking to claim under the scheme inappropriately, for example seeking to avoid an uncertain or difficult claim against one or more potential culpable employers who are solvent and/or insured. APIL president John Spencer called for the increased tariff to be back dated to include those diagnosed since the scheme commenced and for the extension of the scheme to other occupational diseases. In addition the lump sums paid by the DWP in respect of mesothelioma and pneumoconiosis (including asbestosis) will increase with effect from 1 April The top lump sum payment (for those aged 37 or under) under both schemes is 86,607 with the sliding scale depending on age and, in the case of pneumoconiosis payments, the extent of disability. Insurance Claims Fraud Taskforce The Insurance Claims Fraud Taskforce was set up last December under the chair of David Hertzell. It will consider the range of insurance fraud and make recommendations to reduce the level of fraudulent claims with a view to reducing premiums and protecting the interests of honest consumers. The taskforce aims to publish an interim report by spring 2015 with a final report by the end of It will consider three areas: the perception by consumers that insurance fraud is fair game; practices that fail to deter claims fraud; and whether there are aspects of the legal framework that could be strengthened deter fraud. Fraud: Section 57 Criminal Justice and Courts Act The Criminal Justice and Courts Act received the Royal Assent on 12 February Section 57 provides that if the court is satisfied, on the balance of probabilities, that the claimant has been fundamentally dishonest, it must dismiss the claim unless satisfied that this could cause substantial injustice. It was of course already open to the court to dismiss a claim for fundamental dishonesty as exemplified by the case of Gosling v Screwfix last year in which the claimant who had exaggerated his symptoms was found to be fundamentally dishonest and lost the protection of QOCS. However section 57 strengthens the defendant s position because, once there is a finding of fundamental dishonesty, the court must dismiss the claim unless the claimant can satisfy the court that this will result in substantial injustice. Previously the defendant not only had the challenge of establishing fundamental dishonesty but also had to convince the judge to strike out the whole claim. What will and what will not constitute fundamental dishonesty remains the significant question and no doubt there will be satellite litigation regarding what will and what will not constitute a substantial injustice. However it is hard to see that an inability to recover any compensation for noise induced hearing loss could ever constitute a substantial injustice. Case law update No recovery of medical costs for asbestos related diseases in Wales On 9 February 2015 the Supreme Court handed down its judgment, following referral from the Counsel General for Wales, on whether the National Assembly for Wales has the power to enact the Recovery of Medical Costs Asbestos Diseases

5 (Wales) Bill ( the Bill ). The Supreme Court unanimously held that the Welsh Assembly lacked competence to enact the Bill in its present form. The majority also held that the retrospective nature of the Bill infringed the rights of Insurers/Compensators to enjoy peaceful enjoyment of their possessions contrary to Article 1 of the European Convention on Human Rights. There remains the possibility the Welsh Assembly may consider a different scheme but this would be likely to impose charges directly on patients who were able to make a successful claim against a compensator which many would consider an unpalatable option. Stuart McMillan MSP launched the Recovery of Medical Costs for Asbestos Diseases (Scotland) Bill in similar format to the Welsh Bill last year. Responses to the initial consultation are to be submitted by 30 March Although the Scottish Parliament has greater fiscal powers than the Welsh Assembly placing liability in the same way on compensators and insurers would, on the basis of the Supreme Court judgment, be found to infringe Article 1. Director not liable to employee of company in respect of breach of the Employers Liability (Compulsory Insurance) Act 1969 William Campbell v Peter Gordon CSIH 3 February 2015 Mr Campbell claimed against his employer Peter Gordon Joiners Ltd but as the company was insolvent and uninsured he also sued Peter Gordon the sole director of the company. It was alleged that the director was liable in civil law for breach of his statutory duty under the Employers Liability (Compulsory Insurance) Act 1969 for permitting the employer company to carry on its business without having in place an approved EL insurance policy. The decision of the lower court that the director was liable for a breach of statutory duty was overturned by a majority of 2:1. Lord Malcolm said: The 1969 Act imposes a duty to insure upon employers, not upon others see section 1. Section 5 backs this up with criminal sanctions...enforceable against both employers and any recalcitrant directors or officers. There is no mention of any intention or non-intention to make employers and/or officers liable in damages to anyone harmed by an absence of insurance. NIHL Coles Lutman and Buffin guidelines prevail Cahill v Thomas Burnley & Sons Ltd HHJ Saffman gave judgment in a Bradford County Court case on 24 February 2015 in favour of the defendant on the grounds that the claimant s noise induced hearing loss claim was statute barred. He also made findings on the issue of medical causation preferring the evidence of Mr Parker for the defendant on the interpretation and applicability of Guidelines on the diagnosis of noise-induced hearing loss for medicolegal purposes (2000) by Coles Lutman and Buffin ( the CLB guidelines ) to that of Mr Clive Brewis instructed by Roberts Jackson on behalf of the claimant. He concluded that the claimant had failed to prove he had noise induced hearing loss. Mr Brewis on behalf of the claimant referred to the CLB guidelines but his diagnosis of noise induced hearing loss was arrived at after adjusting the audiogram measurement at 1 khz to create a bulge in the better ear on what was an asymmetrical audiogram. The judge did not accept Mr Brewis arguments that an adjustment to the figures at 1 khz was justified or sustainable under the CLB guidelines. Nor did he agree that the CLB guidelines allowed audiograms taken on different days to be averaged. Weightmans were instructed on behalf of the defendant.

6 Pre LASPO recoverable success fees Dalton & Ors v British Telecommunications Plc Mr Justice Phillips has held that NIHL and HAVS should be categorised as a disease rather than an injury for the purposes of assessing the appropriate recoverable fixed success fees in cases funded by pre 31 March 2013 conditional fee agreements. This confirms that the application success fee is 62.5% where the case settles before trial. Knauer v Ministry of Justice The Supreme Court is to consider a leapfrog appeal by the claimant on the issue of whether the multiplier in fatal cases should be assessed from date of trial rather than date of death. If the appeal proceeds and is granted it will result in increased awards in respect of dependency. On the horizon Hearing loss In a report published in the run up to International Ear Care Day on 3 March, the World Health Organization has estimated that around 1.1 billion teenagers and young adults are at risk of suffering NIHL as a result of exposure to high levels of recreational noise from personal audio devices and loud entertainment venues. Studies from middle and high income countries indicated around half of people aged years are exposed to unsafe levels of sound from personal audio devices, including smartphones. Around 40% of this age group is also exposed to potentially damaging levels of sound in venues such as night clubs, bars and at sporting events. It remains to be seen whether the courts will be prepared to accept that claimants are culpable in respect of their own exposure to excessive noise from personal audio devices and that a deduction should be made from damages to reflect the contribution to NIHL but claims from the personal audio generation cannot be far away. Research into mesothelioma Mike Kane, Labour MP for Wythenshawe and Sale East, has brought forward a bill to require insurance companies to fund research into mesothelioma. The Mesothelioma (Amendment) Bill requires a statutory contribution to research from all insurance companies active in the employers liability insurance market. The bill, which was commenced as a ten minute motion is unlikely to become law but illustrates that mesothelioma remains a current and ongoing political topic. The UK has the highest recorded rates of mesothelioma in the world, and it is estimated that 60,000 people are likely to develop the disease over the next 30 years. A number of insurance companies already donate funds for mesothelioma research. One of the projects currently funded is headed by Dr Zsuzsanna Tabi from Cardiff University who is looking at ways to help the body attack the cancerous cells. Another project is the Mesobank, a mesothelioma blood and tissue bank which gives researchers access to vital research material. Diesel fuel emissions It was reported this month that the majority of new buses and coaches registered in the UK in 2014 did not meet the updated Euro 6 emission standards. UK Legislation does not currently require new buses and coaches to meet EU emission standards and the recently developed Euro 6 buses are more expensive than traditional models. Exposure to diesel fumes is associated with increased risk of respiratory diseases and cancer and operators that are compliant with the old standard only will need to ensure they have effective procedures in place to protect employees from exposure to diesel fumes particularly those working in garages and workshops.

7 Claims against insolvent defendants: Insurance Act 2015 The Insurance Act received Royal Assent on 12 February The Insurance Act includes consequential amendments to the Third Party (Rights against Insurers) Act 2010 (the 2010 Act) to include all relevant insolvency events and procedures within the definition of the Act. The 2010 Act has not been brought into force pending these amendments. It is possible that the 2010 Act could be brought into force prior to the general election although the indications are that this will not be done until autumn. Once in force the 2010 Act will allow a claimant to bring a claim directly against an insurer without having to restore the insolvent company to the companies register. The Act also gives claimants the right to information from the insurer direct regarding insurance cover. Asbestos in buildings Shadow Minister of State for Employment Stephen Timms has been outlining Labour's plans for tackling asbestos should it be elected. He welcomed the new mesothelioma payment arrangements and also said that a Labour government should introduce a strategy for the removal of asbestos from the built environment. For further information about Weightmans LLP or to discuss any of the issues in this newsletter, please contact: Jim Byard, Partner via or Judith Peters, Consultant via or Joanna Hector, Solicitor via or Weightmans LLP March 2015 This update does not attempt to provide a full analysis of those matters with which it deals and is provided for general information purposes only. This update is not intended to constitute legal advice and should not be treated as a substitute for legal advice. Weightmans accepts no responsibility for any loss, which may arise from reliance on the information in this update. The copyright in this update is owned by Weightmans 2014 Data Protection Act Pursuant to the Data Protection Act 1998, your name may be retained on our marketing database. The database enables us to select contacts to receive a variety of marketing materials including our legal update service, newsletters and invites to seminars and events. It details your name, address, telephone, fax, , website, mailing requirements and other comments if any. Please ensure you update our marketing team with any changes. You have the right to correct any data that relates to you. You should contact James Holman, our Data Protection Officer in writing, at 100 Old Hall Street Liverpool L3 9QJ.

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