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7/28/2019 QBE Technical Claims Brief April 2012
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Technical claims briefMoty udat A 2012
7/28/2019 QBE Technical Claims Brief April 2012
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Contents
News 1
Supreme Court resolves trigger
litigation issue 1
Jackson reforms suffer setback on
disease claims 2
NHS recoverable charges increase
from 1 April 2012 3
Health and Safety Executive
delays intervention fee 3
Costs 4
Court of Appeal restricts Costs for
Children with minor injuries:
Dockerill and Healey v Tullet;
Macefield v Bakos; Tubridy v Sawar
Court of Appeal (2012) 4
Fraud 5
More fraudsters jailed for contrivedaccident claim: Liverpool Victoria
Insurance Company Limited v
Bashir and Ors High Court (2012) 5
Liability 6
No link between Work-place Stress
and Chronic Fatigue Syndrome:
MacLennan v Hartford Europe Ltd
High Court (2012) 6
No duty on occupiers over dangers
on neighbouring land: Armstrong (Byher Mother...) v Keepmoat Homes Ltd,
Northumberland County Council
and Blyth Valley Borough Council
High Court (2012) 7
Police driver failed to follow pursuit
policy: Smith v Chief Constable of
Nottinghamshire Court of
Appeal (2012) 8
Quantum 9
Privy Council supports Guernsey discount
rate decision: Helmot v Simon Privy
Council (2012) 9
Disclaimer 10
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News
Supreme Court resolvestrigger litigation issue
The UK Supreme Court (UKSC) has at last
handed down judgment in six lead cases
dealing with the issue of when Employers
Liability (EL) policies are triggered in
respect of mesothelioma claims.
The cases were referred to the UKSC after
the Court of Appeal ruled that where the
wording used is sustained the policy
in force at the time the disease starts to
develop responds and where the wording
used is contracted the policy in force at
the time of negligent exposure responds
(see November 2011 Brief).
The Court of Appeal ruling has now been
overturned by a unanimous UKSC ruling
that both sustained and contractedmean caused or initiated by exposure to
asbestos during the policy period.
To make this ruling the UKSC adopted
the interpretation of the policy wording
most consistent with business common
sense (following the Supreme Courts
previous decision in Rainy Sky SA v
Kookmin Bank). They also considered
the requirements under the Workers
Compensation Acts and The Employers
Liability (Compulsory Insurance) Act1969 for a causation based wording
triggered by exposure to avoid the difficulty
of establishing when a disease begins and
avoid the risk of employer insolvency or
non-insurance.
They held that they were not obliged
to follow the Court of Appeals ruling in
Bolton MBC v MMI and Others or to
consider Public Liability (PL) triggers as
the legal regime for PL and EL was simply
different.
Comment: The Court of Appeal decision
was regarded by most commentators as
unsatisfactory. It put the compensation of
some mesothelioma victims in doubt and
lead to some underwriters being faced
with additional liabilities that they could not
have anticipated when setting premiums.
The Supreme Court decision has now
made the compensation of mesothelioma
victims more certain and restored clarity
and simplicity to the handling of these
claims.
The full judgment can be viewed at the
Supreme Court website at:www.supremecourt.gov.uk
.
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Jackson reforms suffersetback on disease claims
The Legal Aid Sentencing and
Punishment of Offenders (LASPO) Billcompleted a bumpy ride through the
House of Lords, with the Government
defeated on two important amendments.
The first amendment carried reinstates the
recoverability of Success Fees and After
the Event (ATE) Insurance Premiums for
claims for compensation for respiratory
illness or disease arising from industrial
exposure to a harmful substance (such as
asbestos).
The second amendment carried goes
even further, preserving Success Fees and
ATEs for all industrial disease claims.
It is not known at this stage whether theGovernment will seek to reverse these
amendments when the Bill returns to the
Commons.
Comment: TThe LASPO bill is the
statutory means of introducing those parts
of Lord Justice Jacksons reforms of civil
litigation funding in England and Wales
that require primary legislation. The ending
of the recoverability (from defendants)
of success fees and ATEs is intended to
deliver substantial savings on litigation
costs and any exemptions from this will
inevitably lessen the impact of the reforms.
Our thanks go to Berrymans Lace MawerLLP for their helpful note on the progress
of the Bill in the Lords.
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NHS recoverable chargesincrease from 1 April 2012
From 1 April 2012 the recoverable NHS
charges payable by compensators in
respect of accidents leading to medical
treatment will increase as set out below.
CurrentTariff
From1 April
2012
Treatment
without
admission
600 615
Daily rate
treatment with
admission
737 755
Per ambulance
journey
181 185
Cap in any one
case
44,056 45,153
Health and Safety Executivedelays intervention fee
The Health and Safety Executive (HSE) has
announced that the planned introduction
date of the Fee for Intervention (FFI)
scheme (see October 2010 Brief) is
to be put back until the next available
opportunity, probably until October of
2012. The charge will be levied where an
HSE Inspector identifies that a duty holder
has committed a material breach leading
to a formal intervention in writing.
Key features of FFI are:
Itwillapplytoimprovementor
prohibition notices issued by email or
letter
Itwillnotapplytoverbaladvice
Itwillnotalterthecurrentregimeforhigh risk sectors such as the nuclear
or chemical industries, where a costs
recovery scheme is already in place
TheHSEwillcharge124forevery
hour of work the inspector undertakes
to identify the breach and see the
improvement through.
The HSE says that it will use the additional
time to work with businesses to help them
understand how the scheme will work.
Comment: The scheme will no doubt
provide much needed revenue for the
HSE at a time when its budget is being
cut back by the Government. The extra
cost to businesses is justified by the HSE
on the basis that it will drive compliance,
particularly amongst those who currently
breach regulation.
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Costs
Court of Appeal restrictsCosts for Children with minorinjuries: Dockerill and Healeyv Tullet; Macefield v Bakos;Tubridy v Sawar Court of
Appeal (2012)In these conjoined appeals, the Court
of Appeal considered what entitlement
children had to costs in low value Road
Traffic Accident (RTA) personal injury
cases in England and Wales.
The defendants in the first two cases
appealed against costs being awarded
to the claimants on a predictable costs
basis where the claims had settled for less
than 1000 each. They argued that the
child claimants should be subject to the
same restrictions as adults for cases which
normally fell within the Small Track.
In the third case, the defendant appealed
against a decision to allow Counsels
fees for attending an approval hearing
on an award of only 2,100 under the
predictable costs rules.
On the first two cases, the Court of Appeal
ruled that the predictable costs rules do not
apply to child claims under 1,000 in value
and that each item of costs claimed should
be scrutinised and only allowed for unusual
work outside of the scope of the Small Track
such as the costs of an approval hearing.
On the issue of Counsels fee for attending
an approval hearing, this should only be
allowed in addition to fixed costs where there
is some complexity in a case (although a
counsels fee for advice on the amount of
the settlement would usually be allowed).
Comment: For settlements under 1,000 in
value, the approach of scrutinising costs will
produce a lower figure than the predictable
costs rules or the Ministry of Justice (MOJ)
RTA process. For claims between 1,000and 2,000 in value, predictable costs will
apply and be cheaper than the MOJ RTA
process costs (if the claim is dealt with
outside of that scheme).
The Court of Appeal decision means that
costs savings should be available but
claims handlers will have to be careful
about the wording they use when agreeing
or offering to pay costs.
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Fraud
More fraudsters jailed forcontrived accident claim:
Liverpool Victoria InsuranceCompany Limited v Bashirand Ors High Court (2012)
The four respondents made claims for
vehicle damage and personal injury arising
from a motor accident that had not really
taken place. The first two respondents,
Mr and Mrs Bashir, had been approached
by an acquaintance who offered them
a fee to make fraudulent claims. Mrs
Bashirs parents were also drawn into the
conspiracy.
The respondents later admitted that the
claims were fraudulent and assisted the
insurers they had tried to defraud by giving
them details of the person who had lured
them into the fraud and of how it wasorganised.
The Court held that despite the Bashirs
having very young children, one of whom
was still breast-feeding, a custodial
sentence was appropriate. The sentence
could have been well in excess of twelve
months but given the Bashirs co-operation
with the insurers a substantial reduction
was made and both of them were given
custodial sentences of six weeks.
Mrs Bashirs parents, who were in their
seventies, in ill health and had a lesser
involvement in the conspiracy escaped
with six week suspended sentences.
Comment: This was the first committal
for contempt to come before the courts
involving a contrived (made up) accident
as opposed to gross exaggeration of a
claim. The custodial sentences imposed
on the Bashirs demonstrate how seriously
the court viewed their attempts to interfere
with the course of justice even though they
were not the organisers of the fraud.
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Liability
No link between Work-placeStress and Chronic FatigueSyndrome: MacLennan vHartford Europe Ltd HighCourt (2012)
The claimant was employed by the
defendant as an HR Manager. She allegedthat she had suffered work place stress
due to working excessive hours and being
caught up in a dispute between two senior
directors. The stress had weakened her
immune system leading her to suffer
frequent infections culminating in Chicken
Pox, which in turn led to Chronic Fatigue
Syndrome (CFS).
The claimant did not return to work after
contracting CFS and submitted a 1.25m
claim including future loss of earnings until
retirement.
The Judge dismissed the claim finding
that there was no causal link between
work place stress and immune system
deficiency or CFS. Even if there had been
such a link, the claim would have failed on
grounds of foreseeability.
The defendants had produced evidence
in the form of e-mail correspondence in
which the claimant said that whilst working
hard she was enjoying her job, had a goodworking relationship with the HR Director
and was well supported by the business.
The claimant as an HR manager should
have known the steps to take if she
believed her health was at risk due to her
work. In the absence of complaint by an
employee (or other prior indication), an
employer was entitled to assume that they
could withstand the normal pressures of
their job.
Comment: The ruling that there was no
causal link between work place stress
and CFS, can now be cited in defence of
future stress claims made on this basis.
The decision reaffirms that foreseeability
remains a good defence in stress claims
where there is no prior indication of a
stress problem and an employee fails
to complain to her employers. It also
highlights the importance of keeping
records of e-mail correspondence.
Our thanks go to Kennedys Solicitors who
acted for the defendants, for their helpful
note on this case.
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No duty on occupiers over
dangers on neighbouringland: Armstrong (By herMother...) v KeepmoatHomes Ltd, NorthumberlandCounty Council and BlythValley Borough Council High Court (2012)
The claimant suffered catastrophic injuries
when she was struck by a car on a busy
dual carriageway. The claimant had walked
onto the road by using a path that led
through a gap in thick vegetation. She
sought damages from a constructioncompany whom she alleged had removed
a fence that would have stopped her
walking onto the road and against the local
councils, who owned the land the path was
on, for failing to prevent visitors walking
onto the road. (No claim was brought
against the driver of the car probably
because he could not have avoided the
claimant who walked directly into his path).
The claim against the first defendant was
dismissed as there was no evidence thatthey had removed the fence.
The court found that the second and third
defendants had constructive knowledgeof the existence of the path and had
effectively consented to its use by the
public. The claimant was a lawful visitor
under the terms of the Occupiers Liability
Act 1957but there was no duty under the
Act or at common law to protect a visitor
from danger on neighbouring land.
Comment: This is a helpful decision for
occupiers drawing a clear distinction
between the dangers on an occupiers
land and those on land adjacent to it.
The court may have been influenced by
the fact that there was a subway and
a footbridge nearby which the claimant
could easily have used to safely cross the
road.
Our thanks go to Plexus Law who acted
for the first defendant, for their helpful note
on this case.
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Police driver failed to
follow pursuit policy:Smith v Chief Constable ofNottinghamshire Court ofAppeal (2012)
The 16-year-old claimant was struck
by a police car whilst crossing a four-
lane road in Nottingham city centre late
on a Saturday night. She had been out
with friends and was reported by some
witnesses to have been drinking.
She had reached the third lane of the
well-lit carriageway (i.e. close to the otherside of the road) when she was struck
by the police car. The police driver was
responding to an emergency call and had
engaged blue flashing lights and siren. The
claimant was thrown onto the roof of the
car by the impact suffering severe head
injuries.
At first instance, the judge held that the
police driver had been keeping a proper
lookout and that the claimant had shown
reckless disregard for her own safety.
There was 75% contributory negligence
on her part.
The claimant appealed. The Court of
Appeal found that the judge at first
instance had erred in finding that the
police driver had kept a proper look out
and in failing to refer to the Police Pursuit
Driving Policy. The policy required the
police driver to take into account both
the road conditions and the distance he
needed to travel.
Expert evidence said that had the officer
been travelling 5-10mph more slowlythe accident could have been avoided
with a delay of only 30 seconds or less.
The speed of 45-50mph amounted to
negligence given that the police driver
would have expected to encounter
pedestrians crossing the road some of
whom were the worse for drink.
The appeal was allowed with a ruling that
contributory negligence was only 30%.
Comment: The case demonstrates
the importance that courts place on
Police driving policies and that drivers of
emergency vehicles must balance the
need to reach an emergency location
quickly with the safety of other road users.
The defendants and their insurers (QBE)
were at least successful in achieving a
30% finding of contributory negligence on
what is likely to be a high value claim.
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Quantum
Privy Council supportsGuernsey discount ratedecision: Helmot v Simon Privy Council (2012)
The plaintiff was a cyclist who suffered
catastrophic injuries when he was struck
by the defendants car. He had a largeclaim for future loss especially for future
care but as the case was in the jurisdiction
of Guernsey there was no legal framework
for a Periodical Payment Order and his
settlement had to be on a lump sum basis.
Liability was not in dispute.
There is no statutory discount rate on
Guernsey and in order to calculate the
lump sum, the court had first to decide
on an appropriate discount rate to apply
(to offset the investment return the plaintiff
would receive on the early receipt of his
future losses).
At first instance (see February 2010 Brief),
the court set a 1% discount rate for all
future losses but on appeal this was
amended to 0.5% for non-earnings related
items and -1.5% for earnings related items
such as carers wages (see October 2010
Brief).
The defendants appealed to the Privy
Council arguing that the Guernsey Courtshould not have departed from the
discount rate set by the Lord Chancellor
for England of Wales of 2.5% for all heads
of future loss.
The Privy Council ruled that the approach
adopted by the Guernsey court was
sound having taken proper account of the
procedure used in England and Wales
and having made appropriate adjustments
for economic conditions on Guernsey.
The Privy Council recommended that the
Appeal be dismissed and the rates set by
the Guernsey Court will now stand.
Comment: The ruling will only directly
affect cases on Guernsey but will no
doubt, be cited by those arguing for
a reduction in the rate in other UK
jurisdictions as supporting their case. The
Lord Chancellor may have been waiting for
this Judgment to be handed down before
commencing his planned consultation on
the discount rate for England and Wales
and there is now no apparent barrier to
this taking place.
The decision on the discount rates in the
Helmot case increased the value of the
damages from 9.3m to 13.75m and
any reduction in the rate for England and
Wales could have similarly dramatic effects
on large future loss claims.
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Completed 29 March 2012 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 purportto 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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