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7/28/2019 QBE Technical Claims Brief January 2012
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Technical claims briefMot pdt J 2012
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Contents
Costs 1
Costs award based on withdrawn
art 36 offer: Epsom College v Pierse
Contracting Southern Ltd - Court of
Appeal (2011) 1
Credit hire 2
Court of Appeal rules on credit hirerates and interest: Vasant Pattni v
First Leicester Buses and Darren Bent v
Highways Utilities and Another
- Court of Appeal (2011) 2
Hire claim not wiped out by refusal of
replacement vehicle from Defendant:
Sayce v TNT Court of Appeal (2011) 3
Liability 4
Court of Appeal rules on Elf and Safety:
Duffosse v Melberry Events Ltd
- Court of Appeal (2011) 4
Procedure 5
District Judge criticises claimants
expert for attempting to mislead
the Court: Walker v Brown
- Stockport County Court (2011) 5
European Court of Justice (ECJ)
rules that injured car owners
permitting uninsured driving must be
compensated: Wilkinson v
Churchill and Evans v
Equity Claims Ltd ECJ (2011) 6
Court of Appeal rules on meaning of
Package in Holiday Claim:
Sean Titshall v Qwerty Travel Ltd
Court of Appeal (2011) 7
Quantum 8
European Court of Justice (ECJ) limits
application of Rome II:
Homawoo v GMF Assurances
ECJ (2011) 8
Disclaimer 9
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Costs
Costs award based onwithdrawn Part 36 offer:Epsom College v PierseContracting Southern Ltd -Court of Appeal (2011)
The defendant contractors appealed
against an award of costs made in favourof the claimant, which was based on a
Part 36 offer that had been withdrawn.
The contractors were sued by the
claimant college after flooding damaged
their dining hall. The college alleged that
the flooding had been caused by a nail,
driven through a pipe by the contractors,
but did not initially produce the damaged
section of pipe in evidence because it had
been mislaid after it was replaced. In the
absence of evidence, liability was denied.
The claimants made three settlement
offers. The first was on a Part 36 basis
before proceedings were issued. It made
no real allowance for the uncertainty over
liability and the risk that the college might
not prove its case and was rejected by the
defendant contractors. The second offer
was made after proceedings were issued
for about half of the pleaded claim. It was
also on a Part 36 basis and was stated as
not withdrawing the first Part 36 offer. The
second offer was rejected. The claimant
made one final offer not on a Part 36basis, which was also rejected.
The pipe section was then found and
disclosed in evidence. The college
withdrew their second and third offers,
leaving the first offer in place. At trial, the
defendant contractors conceded that
the leak had been caused by the nail and
the college was awarded damages with
interest exceeding the value of all their
settlement offers. The judge awarded the
claimant costs based on its second Part
36 offer. This offer had however been
withdrawn and the defendant contractors
appealed arguing that costs could not be
based on a withdrawn offer.
At the appeal, the parties agreed that
costs should not have been awarded
based on a withdrawn Part 36 offer. The
question for the court was whether the
award could be allowed to stand based on
the first Part 36 offer or under Part 44 of
the Civil Procedure Rules (CPR).
The Court of Appeal held that it should
as far as possible, put itself in the shoes
of the trial judge and be slow to impose
its own views even where the judge was
technically wrong in his approach. Part44 could not be adopted to support the
costs award, as the trial judge had not
considered this in making his award.
The trial judge had been reluctant to
base the costs award on the first Part 36
offer because there was little discount
for the uncertainty on liability and the
defendants had not acted unreasonably in
refusing it when the claimant had failed to
produce the damaged pipe in evidence.
The second Part 36 offer was far morereasonable given the absence of evidence.
The Court of Appeal held that the first
Part 36 offer was still in force and
reference to that offer could be made to
justify the costs award. The defendants
should pay the claimants costs on
an indemnity basis but only from a
reasonable period after the pipe had
been disclosed to them. The essence of
the trial judges ruling on costs was thus
preserved and the appeal dismissed.
Comment: Another illustration that when
considering costs and the application of
the CPR, the courts will look closely at the
conduct of the parties and how reasonable
they have been in making or considering
offers. In this case, the claimant collegewas penalised for failing to disclose
essential evidence until late in the day
whilst the defendant contractors were
penalised for not accepting a reasonable
offer once supporting liability evidence was
to hand.
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Credit hire
Court of Appeal rules oncredit hire rates and interest:Vasant Pattni v First LeicesterBuses and Darren Bentv Highways Utilities andAnother - Court of Appeal(2011)
In the above two linked appeals the Court
of Appeal ruled on two longrunning
areas of dispute between credit hirers and
defendants.
In the Pattnicase, the issue was the
claimants entitlement to interest on
credit hire charges for the period from the
end of the hire to the date of judgment.
The claimant advanced three alternative
grounds on which he should be awarded
interest:
Hewascontractuallyliabletopay
interest to the hire company and this
was a reasonably foreseeable loss
arising from the accident
Anawardofinterestshouldbemade
based on the non-credit hire charge
rates to compensate him for the loss of
use of the money that he would have
paid but for the credit hire arrangement
Hewasentitledtoastatutoryawardof
interest pursuant to section 69 of theCounty Courts Act 1984.
The Court of Appeal rejected all three
arguments. The latter two did not apply
because the claimant had not actually
made any payment and had not been
deprived of the use of his money. The
contractual liability argument was rejected
on the basis that the interest charge
constituted the cost of an additional
benefit to the claimant. It enabled him to
delay payment beyond the date it would
otherwise have been due and in the light of
the analysis in Dimond v Lovell, that was
not recoverable by a claimant who could
have afforded not to use credit hire.
In the Bentcase, the claimant had hired
an Aston Martin DB9 on credit for a
period of 94 days in 2007 at a cost of
63,406.90.
The issue was the hire rate that the
claimant could recover. The hire company,
Accident Exchange appealed an earlier
decision, which based the recoverable
rates on those the judge found that the
claimant could have obtained if he had
made reasonable efforts to hire a car on
a non-credit hire basis (which he could
certainly have afforded to do).
The Court of Appeal found that the judge
had erred in her approach to determining
the rate. The defendants had not proved
that the basic hire rate (i.e. the non-credit
hire rate) was any cheaper than the credit
hire rate and the judge had therefore been
wrong to reject the rate evidence supplied
by the hire company in favour of the
defendants evidence on average rates for
2009 (a different year). The claimant was
entitled to the actual cost of a like for like
replacement not an average rate and in thecircumstances, this was the credit hire rate.
The Court of Appeal however, rejected the
Claimants argument that it was wrong to
apply a cheaper 28-day hire rate. It was
clear in this case the repair time would
exceed 28 days and the claimant could
have mitigated his loss by obtaining a better
rate if he had contracted for a longer initial
period of hire. A reduction of 12% was
applied to the rate to reflect the saving that
a longer initial hire period would have made.
Comment Defendants will welcome the
decision in the Pattni case which effectively
puts an end to claims for interest on credit
hire for the period from the end of the hire
to judgment. The Bent decision will be less
welcome as spot (average) rates will no
longer be sufficient evidence on which to
challenge credit hire rates.
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Hire claim not wiped outby refusal of replacementvehicle from Defendant:Sayce v TNT Court ofAppeal (2011)
The claimant sought recovery of vehiclehire charges from the defendants. The
defendants had offered the claimant a
replacement vehicle at no cost to her. At
first instance, the defendants successfully
defeated the claim for hire on the
basis that the claimant would not have
incurred any loss had she accepted the
replacement vehicle from them.
The claimant appealed. When the appeal
was heard the Court of Appeal had
already ruled in the case ofCopley v
Lawn that a claim for hire was not wiped
out by the offer of a replacement vehicle.
A claimant was still entitled to recover an
amount equal to actual reasonable hire
charges even if they had declined the
offer of a replacement vehicle from the
defendant.
The judge hearing the appeal however,
declined to follow the decision in Copley
prompting a second appeal by the
claimant, this time to the Court of Appeal.
The parties prepared a joint statement
saying that the appeal should be allowed
as the judge had clearly erred in refusing
to follow binding authority but that the
defendant intended to make an appeal
to the Supreme Court as Copleywas
inconsistent with established authorities on
mitigation and wrong in principle.
Not surprisingly, the appeal was allowed
and the judge, who heard the first
appeal, was criticised for his failure to
adopt precedent. He should have given
judgment based on Copleywhilst raising
his concerns about the case, to give the
defendant grounds for appeal. As matters
stood, the Court of Appeal could not grant
leave to appeal to the Supreme Court in
this case due to the serious procedural
irregularities that had occurred.
Comment: The decision in Copley remains
good law until such time as defendants
successfully bring a test case before the
Supreme Court.
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Liability
Court of Appeal rules onElf and Safety: Duffosse vMelberry Events Ltd - Courtof Appeal (2011)
The elderly claimant was visiting Santas
grotto in Selfridges with her grandchildren
when she tripped over a plastic Christmastree decoration lying on the floor. She fell
and fractured her thighbone.
The grotto was manned by Santa and an
elf, whose duty it was to remove any trip
hazards on the floor. At first instance, the
judge found that there was no breach of
duty by the defendants. There was a good
safety system in place and since neither
Santa nor his elf spotted the bauble, it was
not in plain view but probably obscured by
a toy train. The claimant appealed.
The Court of Appeal found that whilst the
inspection system used by Santa and his
elf may have been excellent, the elf had
many other duties and it was possible that
she and Santa had not been as careful
as they should have been. Since the
bauble was there to be stepped on, on the
balance of probabilities it was also there
to be seen and should have been spotted
and removed.
There was no contributory negligenceon the part of the claimant as she had
stepped on the bauble whilst moving back
out of camera shot at the request of the
elf. The grotto was dark and the claimants
attention on entry would have been drawn
to the toy display on the opposite side of
the entrance.
Judgment was given for the claimant with
damages to be assessed.
Comment: The District Judge who
originally heard the case was criticised by
the Court of Appeal for taking an overly
benevolent view of the performance by
Santa and his elf... perhaps proving that
even District Judges are not immune to
the Christmas spirit.
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Procedure
District Judge criticisesclaimants expert forattempting to mislead theCourt: Walker v Brown -Stockport County Court(2011)
The claimant suffered a neck and back
injury in an accident. His solicitors
instructed a doctor to examine him who
produced a report giving a prognosis for
recovery in five months. When the claimantsaid he had not recovered, the doctor did
not re-examine him but simply produced
a revised report with the same date giving
a new prognosis for recovery 12 months
post accident.
The original report was served rather than
the revised one (presumably in error) and
the defendants solicitors were unaware
of the revised prognosis until a month
before trial when they received a witness
statement from the claimant referring to a12- month recovery period. They queried
this with the claimants solicitors who
did not reply until a little over two weeks
before the trial. The trial judge held that the
defendant was deprived of any opportunity
to increase their settlement offer pre-issue
and/or to make use of Part 36 offers to
protect themselves on costs.
The judge was highly critical of both the
conduct of the medical expert and the
claimants solicitors and ordered that the
claimant pay the defendants costs of the
action.
District Judge Horans forthright
comments about the revised medical
report are set out below:
If a doctor is changing his mind at the
behest of a claimant, there should be
a totally separate report with a totally
separate date indicating that he haschanged his original view and explaining
why he has and to do other than this is
an attempt to mislead the other party and
an attempt to mislead the court and I do
not like it one iota and I request and I am
going to order that you inform this doctor
and these solicitors, Leech and Co, they
must not do anything like that again and
I shall remember this, I shall mention it to
my colleagues to look out in particular for
Leech and Co and for Dr Evans.
An expert has a duty to the court, not to
the claimant and not to the claimants
solicitors. He has got a duty to the court
and he should not have changed his
opinion just like that without there being a
further re-examination. Had there not been
this mess up, this error by the claimants
solicitors, we would not have known about
this. You then wonder is this the tip of
the iceberg? How often is it happening?
It is unprofessional, very unprofessional.
I have half mind to adjourn the case for
a representative from Leech and Co and
for Dr Evans to attend personally before
me and explain what they are up to and,
in fact, I am going to order that they both
provide a written explanation as to how
this has come about.
Comment: Under Part 35 of the Civil
Procedure Rules, an expert witness
duty is to the court and they must report
impartially. Sometimes experts are
suspected of either lacking impartiality
or at least of being unaware of their
obligations under Part 35. It is encouraging
to see a judge taking such a firm line on
this issue.
Our thanks go to DWF solicitors for
sending us the Transcript of the Judgment
in this case.
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European Court of Justice(ECJ) rules that injuredcar owners permittinguninsured driving must becompensated: Wilkinson vChurchill and Evans v EquityClaims Ltd ECJ (2011)
In June of 2010, we reported on two
cases involving car owners who had
permitted uninsured drivers to drive their
vehicles and who were both seriously
injured when their cars crashed. In both
cases the insurers of the vehicles declined
to pay the owners injury claims on the
basis that any damages paid to them
would be immediately recoverable under
Section 151 (8) of the Road Traffic Act
1988 (RTA) (because they had permitted
uninsured drivers to use their vehicles).
The claimants argued that thisinterpretation of the RTA conflicted with
European Union policy that victims of
road traffic accidents who were injured by
negligent drivers should be compensated
regardless of whether the drivers were
insured or not.
The cases were referred by the Court of
Appeal to the European Court of Justice
(ECJ). The ECJ has now ruled that under
EU law, insurers cannot rely on Section
151 (8) to reject claims from policyholders
who have been injured whilst being
driven by uninsured drivers, regardless
of whether they knew the driver to be
uninsured or not.
The Court of Appeal will now decide
whether or not to apply the ECJs ruling.
If they decide that insurers may continue
to rely on Section 151 (8) of the RTA even
though it is in conflict of EU law, injured
claimants denied compensation in this
situation, would have a right of action
against the UK Government.
Comment: It is not certain how the Court
of Appeal will rule or if the UK Government
will now amend the RTA. Insurers will be
watching the outcome with interest as this
is not an unusual scenario.
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Court of Appeal rules onmeaning of Package inHoliday Claim: Sean Titshall vQwerty Travel Ltd Court ofAppeal (2011)
The claimant was seriously injured when
a glass door shattered at a hotel whilst he
was on holiday. He alleged that the glass
was faulty and brought a claim under the
Package Travel, Package Holidays
and Package Tours Regulations 1992
against the defendant travel agents.
The defendants denied that they owed any
obligation to the claimant. They maintained
that the claimant had entered into two
separate contracts with two companies for
flights and accommodation. The claimant
had booked his holiday by making a short
telephone conversation to one of the
defendants clerks. Neither the claimantnor the clerk could remember the detail of
their conversation nor was there an invoice
available. The claimant had however,
been provided with a statement showing
the individual costs of the flights and
accommodation and three unspecified
service fees.
At first instance, the court dismissed the
claim after ruling as a preliminary issue that
the claimant had purchased two separate
services rather than a package and
the travel agents were not a party to the
holiday contract. The claimant appealed
arguing that the pre-arranged combination
of services had been sold at an inclusive
price.
The Court of Appeal ruled that to assess
whether the components of the holiday
were sold or offered at an inclusive
price, it needed to determine whether
they were being sold as components of
a combination or separately but at the
same time. In this case, the travel agentshad advertised a last minute get-away
at an inclusive price and at no time had
they suggested that either the flights or
the accommodation were available for
purchase separately. The service fees
were also presented at least partly, as
the price of putting the package together.The service fees could not be attributed
between flights and accommodation
and there was no way of determining the
separate costs of either of these inclusive
of service fees.
The travel agents were liable to the
claimant for the proper performance of the
obligations of the contract.
Comment: In the lead judgment, Lord
Justice Tomlinson commented that whilst
consumer protection was not the primary
object of the European Directive which
underpinned the regulations, one aim
was to make it more straight forward for a
claimant to obtain recovery from a single
domestic supplier in the event of some
failure of the holiday providers.
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Quantum
European Court of Justice(ECJ) limits application ofRome II: Homawoo v GMFAssurances ECJ (2011)
The claimant was seriously injured in a
road traffic accident, in France by a French
motorist in August of 2007. He broughtproceedings in England and argued that
his compensation should be assessed
by reference to English law, which would
mean a far higher award than under
French law.
Under European Community regulation
864/2007 known as Rome II the law
used to determine damages is usually
the law applicable in the country where
the tort (in this case a motor accident)
occurred. Prior to the implementation
of Rome II, the law used in assessing
damages for an English claimant injured
abroad was the English law.
The High Court was asked to determine
whether Rome II was in force at the
time of the accident (see September
2010 Brief) but this was by no means
straightforward.
The claimant argued that Rome II did
not apply to events before 11 January
2009, as that was the application datespecifically referred to in the regulation.
The defendant argued that it applied to
any determination by the court conducted
on or after 11 January 2009 provided the
original tort occurred after 20 days from
the date that Rome II was first published
i.e. from 20 August 2007 (European
regulation is normally deemed to be in
force 20 days after publication unless
otherwise specified).
The High Court realising the need for
consistency and the large number of
cases that might be affected by their
ruling, referred the case to the European
Court of Justice (ECJ).
The ECJ has now ruled that Rome II
applied only to torts giving rise to damage
occurring after 11 January 2009 meaning
that the claim in this case was not subject
to it and damages would be assessed
under English law.
Comment: The ECJ has now ended the
uncertainty effecting cross-border claimsoccurring between 20 August 2007 and
11 January 2009. Damages in England
and Wales are amongst the highest in
Europe however and the fact that these
claims will now achieve damages based
on this jurisdictions law will make most of
them more expensive.
Our thanks go to Berrymans Lace Mawer
solicitors for drawing this case to our
attention.
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Completed 21 December 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 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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