Personal Injury Brief

Transcription

1 27 January 2016 Personal Injury Brief Welcome to the latest edition of Personal Injury Brief. Headlines in this edition include: Interim report of civil courts structure review Small claims limit consultation expected in March 2016 Call made for compulsory public liability cover Impact of driverless cars under discussion Increased court fees to be kept under review Please see our market insights article for further details. As always, I hope you enjoy reading this edition and welcome your feedback. Richard West Head of Liability Page 1 of 14

2 Market insights A summary of key developments including the civil courts structure review, small claims limit, compulsory public liability cover, autonomous vehicles and enhanced court fees. Civil courts structure review: interim report published The interim report by Lord Justice Briggs confirms a clear and pressing need to create an Online Court (OC) for claims up to 25,000. His provisional view excludes personal injury claims on the fast track from the new OC. Other suggested reforms include the use of delegated judicial officers (case officers supervised by judges). Briggs LJ urges caution towards unification of the country courts and High Court ahead of implementation of the reform programme. The consultation process will be completed by the end of May 2016 and Briggs LJ will complete the review by the end of July Mark Burton; mark.burton@kennedyslaw.com Small claims limit: insurers promise to pass on whiplash reform savings Leading insurers have committed to give customers 100% of the savings made from the government proposal to raise the small claims limit for personal injury claims to 5,000. The agreement comes after a roundtable meeting between the industry and the Ministry of Justice in December 2015 to discuss the Autumn Statement. A ministerial meeting is planned for the end of January 2016 ahead of the formal consultation in March Richard West; richard.west@kennedyslaw.com Related item: Call for compulsory public liability cover The Association of Personal Injury Lawyers (APIL) has put forward a proposal to the All-Party Parliamentary Group on Insurance and Financial Services (APPG) to consider whether public liability insurance should be compulsory for all businesses. APIL highlighted the dangers presented by small businesses such as hairdressers and beauty salons, bouncy castles and fireworks displays and argued that certain professional bodies are calling for compulsory cover in order to promote the reputation of members. Concerned by the impact that compulsory cover would have on the market and noting the anti-regulation stance of the Government, the APPG has advised APIL to obtain further evidence. Tracy Head; tracy.head@kennedyslaw.com Page 2 of 14

3 Autonomous vehicles: challenges for the EU A briefing from the European Parliament on the growing technologies of vehicle automation looks at the potential impact around the development of technology and the challenges in designing an appropriate legal and regulatory framework. The briefing looks at questions on data privacy and cyber security and recognises the need to adapt liability law to the new technologies, including for accidents caused by malfunctions of automated systems. Meanwhile, the insurance and liability issues are to be discussed by the Automated Driving Insurer Group led by the Association of British Insurers. Niall Edwards; niall.edwards@kennedyslaw.com Related item: Government response to increased court and tribunal fees The Government has published its response to the consultation on proposals to increase court and tribunal fees. The response confirms the intention to implement fee increases of 10% across the range of civil proceedings, including enforcement and determination of costs proceedings. The maximum fee will remain capped at 10,000 for all money claims to properly assess the impact of the introduction of enhanced fees in March The measures form part of the plan to generate an anticipated 15m per annum. Rachel Moore; rachel.moore@kennedyslaw.com Related item: Articles Civil justice in Scotland: all change Significant reforms to the Scottish civil court system have been introduced which commenced in earnest from September We set out some of the key changes and consider the implications. In 2009 the Scottish Civil Courts Review made wide ranging recommendations about modernising the civil courts system in Scotland. At that time Scotland had a two tier structure: the Sheriff Courts and the (higher level) Court of Session. It was felt that the system could be more efficient and that some actions were being raised at too high a level in the court system for the subject matter and value. The overriding objective of the Review was for cases be heard at the most appropriate and effective level in the court system. Page 3 of 14

4 The key changes subsequently agreed by Parliament have now been introduced. National personal injury court Edinburgh Sheriff Court has been designated as having national jurisdiction in personal injury actions. Six Sheriffs have been designated as Specialist Personal Injury Sheriffs, all with a relevant background. Cases can still be raised in the local Sheriff Court if it has jurisdiction. With a few exceptions, all personal injury actions for up to 100,000 will have to be raised in the Sheriff Court. Only cases seeking damages of a greater amount can be raised in the Court of Session. The change in the exclusive jurisdiction from 5,000 to 100,000 will lead to a very significant increase in the volume of work at the Sheriff Court. We expect Summary Sheriffs to be appointed next year who will hear claims of up to 5,000, under what is to be called the simple procedure. New appeal court As from January 2016, appeals from the Sheriff Courts will be heard in a new Sheriff Appeal Court. This appeal court has an all-scotland jurisdiction, which will ensure that there is consistency in the interpretation of the law. The Sheriff Appeal Court can sit with a single appeal judge or as a bench of three or five in more complex cases. In addition, there is the option to refer complex cases to the Court of Session. Why was change needed? The Court of Session was simply overloaded with cases. Judges were often spending time considering cases which were not appropriate/proportionate for the highest civil court. Any claim over 5,000 could be raised in the Court of Session. This led to a significant volume of personal injury cases being raised there that were arguably better suited to the Sheriff Court. Many cases were being settled for a few thousand pounds, leading to the costs far outweighing the sum awarded to the claimant. A significant number of appeals were being taken to the Court of Session as no leave was required. Cases which had no real prospects of success were taking up a significant amount of time. Implications These reforms should lead to cases in Scotland being dealt with proportionately and at an appropriate level. This is particularly so in personal injury cases, where we have frequently seen claims that are clearly worth less than 10,000 being raised in the Court of Session. Page 4 of 14

5 They should also free up Court of Session time, creating capacity to allow the Court of Session to deal promptly with the most important and difficult civil cases in Scotland. However, only time will tell if the reforms will fully address the recommendations by the Scottish Civil Courts Review. We now also expect that a mandatory pre-action protocol will be introduced in September 2016, so it really is a case of all change. Rory Jackson; rory.jackson@kennedyslaw.com Defending fibromyalgia claims: a modern strategic approach We explore fibromyalgia in the claims environment and take a fresh look at tactics for defendants and their insurers. Fibromyalgia claims are potentially fraught with difficulty. Causation is key but requires careful investigation and unpicking and selecting the right team of medical experts is crucial. What is fibromyalgia? Fibromyalgia is a chronic condition that causes widespread pain and diffuse tenderness in the muscles, ligaments and tendons. However, not only is the condition fundamentally difficult to diagnose but the exact cause of the condition is unknown. As outlined on the NHS choices website, certain criteria will normally have to be met before the diagnosis can be made. There should be severe pain in three to six different areas of the body or milder pain in seven or more different areas and symptoms should have remained at a similar level for at least three months. The condition potentially mimics other conditions so those need to be ruled out. In addition, patients often suffer from a plethora of other pre-existing medical conditions, both physical and psychological. Challenging myths Fred Wolfe, the lead author of the 1990 paper that first defined the diagnostic guidelines for fibromyalgia, concluded in a recent study, published in The Journal of Rheumatology, that there is no link between physical trauma and the onset of subsequent fibromyalgia. Nonetheless, some of the claimant lobby persist in encouraging sufferers of the condition to pursue claims when they have been involved in even the most trivial of accidents. Page 5 of 14

6 Taking a strategic approach It is therefore essential that defendants take a well-planned strategic approach to these claims. The most important considerations are: Ensure that robust processes are in place to select appropriate medical experts. A rheumatologist and a psychiatrist will be required as a minimum and should be chosen carefully and wisely. They should ideally have experience of giving evidence in fibromyalgia cases where their evidence was preferred by the court in its handed down judgment. Fully reviewing the claimant s medical, occupational health, Department for Work and Pensions and other records to assist in causation arguments. It is frequently the case that the condition is wholly unrelated to any traumatic event and the condition was pre-existing even though no formal diagnosis had been made. Accidents are very likely to have had no impact at all on symptoms or at the very least only exacerbated them minimally. The subjective nature of the condition does unfortunately lend itself to exaggeration of symptoms, whether conscious or sub-conscious, so that potential issue needs to be considered very carefully too. Managing the condition It is frequently pleaded in these cases that fibromyalgia significantly restricts claimants day-to-day activities and large claims for care and loss of earnings are accordingly advanced. These claims should be challenged robustly. Modern medical opinion is such that, given the nature of the condition and the absence of any real physical tissue damage, participating in regular physical exercise and carrying on with normal everyday activities is positively recommended in order to manage the condition. Claimants and sufferers need to be reassured that the condition is not crippling and that inactivity will in fact have the reverse effect by increasing pain and fatigue. That modern medical approach needs to be brought into the claims environment to challenge those large elements of the claim. Conclusion Each case of fibromyalgia needs to be considered on its own merits. However, taking a strategic approach to litigation and assembling an experienced legal and medical advisory team, who take a modern approach to the issues that frequently arise, will offer the best chance of a successful outcome. It is also hoped that the claimant lobby and numerous fibromyalgia support groups that have sprung up around the country will encourage their clients and members Page 6 of 14

7 to avail themselves of the treatment and information that is available and to continue to pursue active, productive lives. Laurence Vahey; Radd Seiger; Early neutral evaluation: enticed, or not enthusiastic? A new provision in the Civil Procedure Rules (CPR) provides for early neutral evaluation (ENE) of claims; we consider the application of this form of alternative dispute resolution (ADR) to personal injury claims and potential difficulties that may arise. Court rules The CPR were amended in October 2015 to reference expressly the courts power to hold an ENE hearing. The new Part 3.1(2)(m) of the CPR provides that the court may: take any other step or make any other order for the purpose of managing the case and furthering the overriding objective, including hearing an Early Neutral Evaluation with the aim of helping the parties settle the case. For those unfamiliar with ENE, it is a non-binding evaluation by a third party (in the CPR version it will be a judge) who reviews the papers and indicates who will succeed if the case proceeds. The evaluation can be limited to a specific issue or issues or extended to the whole case if desired. The ultimate aim is for the party who receives an unfavourable indication to give up, or, if that does not occur and at the very least, for the gap between the parties to be sufficiently narrowed for the case to progress to speedier resolution. Personal injury claims Our view is that ENE has a narrow application for personal injury cases and works best where the deadlock is a point of law, not requiring the third party to undertake a balancing exercise in relation to the weight attaching to opposing evidence. In that respect, it has a lot in common with the summary judgment procedure (see Part 24 of the CPR). For example, we have used it in a tort case where the deadlock related to whether, and to what extent, the Defendant owed the Claimant a duty of care in novel circumstances where there was no pre-existing relationship. Each side submitted skeleton arguments. The indication was in our favour, following which the Claimant discontinued and paid our costs. From the Claimant's standpoint, he was able to risk manage a speculative claim at an early stage and limit the eventual costs liability. Page 7 of 14

8 Difficulties We are not convinced that any CPR version maximises the ENE potential. Any postlitigation evaluation is not that early. Rather, the bigger potential gains arise preaction. A further obstacle is that, like mediation for example, ENE is an ADR mechanism that offers a good chance, but no absolute guarantee, that the return on your fees investment will be a final settlement. That is not an easy sell. For the CPR version to gain traction, it may therefore have to be competitively priced. The court fees leaflet EX50 has not yet been updated to include any ENE pricing. We can therefore only assume that the fees will be in line with other hearings, for which the current rates are 545 in the fast track and 1,090 in the multi-track. Those court hearing fees are usually payable by the claimant, but there is an argument that the parties should go halves, so that both parties have financially invested and are motivated to take the process seriously. In the personal injury sector, and especially at the lower claim value end, it will be difficult for private ADR providers to offer cheap enough pricing to entice parties into ENE, as opposed to rival models such as conventional offers and negotiations. From the commercial standpoint, the level of potential ENE referrals is unlikely to be sufficient to allow discounted pricing on a volume basis. Conclusion In summary, ENE is a welcome addition to the CPR and certainly has a place on the menu of ADR options. However, our prediction is that it will remain a niche procedure that a majority of claims professionals will never encounter during their careers. It is unlikely to revolutionise everyday practice, because other ADR models have a far wider application and offer better prospects of a measurable end result. Mark Burton; mark.burton@kennedyslaw.com Case law Personal Injury Brief: latest decisions January 2016 A round up of recent and anticipated court decisions raising issues relating to court issue fees, a training exercise abroad, fatal accident claims, jurisdiction and Part 36 offers. Court issue fee: consequences of underpaying Lewis v Ward Hadaway [ ] The 31 claims were for damages for alleged negligence. In each case the letters of claim claimed substantial sums. The issue fees paid on the Claimants behalf reflected very much lower value claims. The High Court held that there had been Page 8 of 14

9 an abuse of process by the Claimants. They deliberately underestimated the value of their claims in order either to avoid, or defer, payment of the full and correct fees. It would be disproportionate to strike out the claims. However, in 11 cases the claim form was delivered to the court before the limitation period but was not issued until after expiry of the limitation period. These claims should be struck out as they were not accompanied by the appropriate fee. View our full case review: Cindy Tsang; Amy-Marie Wilson; Duty of care: training exercise abroad Humphrey v Aegis Defence Services Ltd and Aegis Defence Services (BVI) Ltd [ ] The claim related to a shoulder injury sustained by the Claimant in Iraq whilst engaged by the Defendants under a contract for services. In the course of a simulated stretcher carrying exercise, one of his team, an Iraqi interpreter, dropped the stretcher without warning. The High Court dismissed the Claimant s claim, finding that there had been no breach of duty by the Defendants. The Court of Appeal dismissed his appeal. It was impossible to say that the Defendants were at fault in failing to take further steps to ensure that interpreters were fit enough to undertake the exercise. In addition, the Judge had been entitled to take the social utility of the activity into account. Kennedys acted for the Defendants in their successful defence of this claim. View our full case review: Rachel Moore; rachel.moore@kennedyslaw.com Fatal accident claims: multiplier for dependency Knauer v Ministry of Justice The Supreme Court is due to hear the Claimant s appeal in this case on 28 February The appeal will consider whether the traditional method of assessing the multiplier for dependency in fatal accident claims continues to be appropriate. It has long been the case that the multiplier for dependency is assessed at the date of death. In this case, Sally Knauer was exposed to asbestos in the course of her employment. As a result, she contracted mesothelioma and died at the age of 46. The Claimant (her widower) submits that the multiplier for future loss should start at the date of trial or judgment. In this claim, this approach would increase the value of the claim by over 50,000. View our case review of the High Court decision: Page 9 of 14

10 Janine Clark; Jurisdiction: claims within the UK Cook v Virgin Media Ltd; McNeil v Tesco PLC [ ] The Claimants claimed damages for injuries they alleged they sustained in Scotland. The claims were issued in England. The registered offices of the Defendants are in England and Wales. The Claimants live in Scotland. At first instance, the claims were stuck out on the grounds that they should have been brought in Scotland. In the Court of Appeal, the Master of the Rolls dismissed the Claimants appeals. He held that the European regime did not apply to these proceedings. The rules for allocation of jurisdiction within the UK are set out in the Civil Jurisdiction and Judgments Act Section 49 of the Act expressly preserved the forum non conveniens doctrine in domestic cases. In addition, the Court had the power to stay or strike out a claim on the ground of forum non conveniens without an application having been made by the Defendants to challenge jurisdiction under Part 11 of the Civil Procedure Rules. Nicholas Jackson; nicholas.jackson@kennedyslaw.com Part 36 and CRU Crooks v Hendricks Lovell Ltd [ ] The Claimant brought a claim for personal injury. In September 2012, the Defendant made a Part 36 offer of 18,500 net of CRU. Had an offset been applied, the gross offer would have been 32, The Recorder awarded the Claimant 29,550. Benefits were at that time 16,262.76, meaning a net payment of 13, However, the Claimant indicated he wished to review the CRU certificate. The revised certificate showed recoverable benefits of 11, Only 6, could be offset, resulting in a net payment to the Claimant of 22, The Court of Appeal allowed the Claimant s appeal on costs, finding that the Claimant had beaten the Part 36 offer. The Recorder should have considered the net amount actually paid to the Claimant, mirroring the terms of the Part 36 offer, not the total amount payable by the Defendant. That determination could not be made until the outcome of the CRU review decision. View details of our Essential Guide to CRU Benefits and Appeals: Paul Morris; paul.morris@kennedyslaw.com Special feature Establishing a legacy: Insurance Fraud Taskforce final report Page 10 of 14

11 The Insurance Fraud Taskforce published its final report on 18 January The report makes far-reaching recommendations to the Government, insurers, the Association of British Insurers (ABI), the Chartered Insurance Institute (CII), Information Commissioner s Office (ICO), Solicitors Regulation Authority (SRA) and other industry bodies. In its conclusion, the Taskforce calls on Government to establish a legacy vehicle to provide oversight for the implementation of its recommendations and ensure that dialogue between different sectors on insurance fraud continues. It is reassuring to see data and intelligence sharing at the heart of the recommendations. Access to the Claims and Underwriting Exchange (CUE) is not total across the compensator community with many Lloyd s Market, third party administrators and self-managing corporates unable to use this key dataset. Data sharing initiatives must therefore go beyond the ABI membership, the Insurance Fraud Bureau (IFB) membership and subscribers to the CUE. Nevertheless, the recommendations, if implemented without consideration, will tread a fine line of creating undesirable consequences and behaviours which may negatively impact the best of intentions. We summarise the key recommendations below. Cross-cutting recommendations Improve consumer trust in the insurance sector Insurers must improve consumer understanding of insurance products by ensuring communications (including application and claims forms) are easy to understand. They must also ensure anti-fraud messaging is targeted and hardhitting. The ABI, IFB and Insurance Fraud Enforcement Department should develop a long-term cross-industry public communications strategy. The ABI and CII should commission research on behavioural economics to prevent application fraud and support best practice guidance. Improve data available in fraud databases and data sharing schemes Insurers should increase their membership of existing anti-fraud schemes and databases such as MyLicence and CUE. Insurance Database Services Ltd should allow the public to check their own claims histories through CUE free of charge. The ICO should provide clear guidance on data-sharing practices with reference to forthcoming EU regulations on data protection. Coordinate best practice Insurers should ensure board level ownership of counter fraud activity. Page 11 of 14

12 The ABI should develop and promote voluntary best practice guidance based on what the most effective firms are doing to tackle fraud. Make defending claims more robust The ABI should discourage the inappropriate use of pre-medical offers. Insurers should defend more court proceedings where they believe a claim is fraudulent, rather than providing cash settlements. Consider legal changes to reduce exaggerated or fraudulent claims Following the whiplash reform announcement at Autumn Statement 2015, further work is needed to ensure that any late exaggerated or fraudulent claims not addressed by whiplash reform are discouraged. Premeditated claims fraud recommendations Improve cross-industry coordination The IFB should establish itself as a holistic intelligence hub, to include the Claims Portal Ltd allowing the IFB access to claims portal data. Toughen action against dishonest solicitors The SRA should take a tougher approach to combatting fraud; insurers providing the SRA with evidence regarding claimant law firms suspected of insurance fraud and the SRA investigating and acting robustly. Government should consider reviewing the fining powers of the SRA and introducing a mandatory requirement for referral sources to be included on claims notification forms. Opportunistic claims fraud recommendations Strengthen the regulation of CMCs Government should establish a stronger regime for claims management company (CMC) regulation and ensure the Claims Management Regulator has adequate resources. The Taskforce endorses the independent review of CMC regulation by Carol Brady. Clamp down on nuisance callers that encourage fraudulent claims Government should develop a coherent regulatory strategy to tackle nuisance calls that encourage fraudulent claims. Page 12 of 14

13 The ICO should work with regulators operating in countries where nuisance calls are commonly sourced to tackle nuisance calls internationally. Tackle fraudulent claims for noise induced hearing loss Government should consider introducing a fixed cost regime for noise induced hearing loss (NIHL) claims. The Taskforce endorses the Civil Justice Council s investigation into how a fixed recoverable costs regime for NIHL cases might work. Application fraud recommendations Aggregators should establish the use of existing fraud databases and data sharing schemes on a consistent basis to detect fraud at the point of quote. Comment Many of the recommendations aim to demystify data sharing and encourage collaboration and engagement in data sharing solutions to detect fraud. Being better equipped to fight fraud has many positive outcomes. Allowing the industry to be seen to fight fraud will remove any soft touch perception and sends the right message of deterrence. It also demonstrates that compensators are looking after their honest customers and employees by not wasting money on disingenuous claimants. In practice, such ideology needs to be balanced against the reality that many insurers operate on a case-by-case commercial basis where fighting fraud may not make economic sense not least due to the foundation of fixed costs reforms that supports such an approach. Compensators should have the option to minimise the impact of fraud and claims in the most appropriate way to any specific claim. Where a compensator is satisfied that a presented claim is genuine and wishes to deal with the claim quickly and in collaboration with the claimant, the system needs to recognise that a pre-med offer is more than a spreadsheet exercise and can help foster trust in the sector. It is reassuring that the Taskforce recognises the IFB as a central intelligence hub. It is unrealistic for one organisation to deliver data sharing across a varied and complex industry. Ideally, the IFB will play a crucial and leading role in bringing intelligence and data into the sector. From it must flow a network of data sharing with connected systems and databases in order to allow a true two-way data sharing process. Only then will there be effective engagement and the proliferation of information, shared thinking and innovation through shared ideas and practices. An inevitable word of caution is however required. The prospect of further legal and regulatory change in respect of exaggerated and late claims will need careful thought. Compensators must be given the opportunity to respond to the impact of recent changes to the claims procedure and be allowed to properly assess future risks in order to prepare appropriately to meet new challenges. Page 13 of 14

14 Fraud will look to exist in any area where conditions present as favourable. For example, might allowing the public free access to check their records on CUE risk tailored claims presentation? Being aware and acting quickly is important to any ongoing fraud management programme. Change will result in new fraud behaviours and risks. Data analytics that monitor and examine trends will be central to our understanding of those changing behaviours and the early identification of new problem areas. Martin Stockdale; Kennedys is a trading name of Kennedys Law LLP. Kennedys Law LLP is a limited liability partnership registered in England and Wales (with registered number OC353214). Page 14 of 14