Legal Watch:Personal Injury23rd July 2015Issue: 071

Events

Plexus and Greenwoods hold a series of events which are open to interested clients. See below for those being held in the next few months:

The Major Bodily Injury Group (MBIG) | Spring Seminar - You the client | 21.04.16 | The Wellcome Collection, London

In this issue:

• Part 36

• Limitation

• Some relief at last for motor insurers

Part 36In the commercial claim of Dutton and others v Minards and others [Lawtel 20/07/2015] we have yet another case dealing with Part 36.

Former CPR 35.10(1), now CPR 36.13(1) states:

(1) Subject to paragraphs (2) and (4) and to rule 36.20, where a Part 36 offer is accepted within the relevant period the claimant will be entitled to the costs of the proceedings (including their recoverable pre-action costs) up to the date on which notice of acceptance was served on the offeror.

The claimants alleged that the defendants owed them commission following the dissolution of a joint venture and issuedaclaim.Thedefendantsofferedtheclaimants£25,000plus their reasonable costs; the claimants did not accept the offer.Theclaimantsthenmadeaseriesofoffers,includingaPart 36offertosettlefor£18,000.Thedefendantsdeliberatelyaccepted it one minute after the expiry of the 21-day period prescribed by CPR 36.3. Consequently, the claim was settled but the automatic costs consequences under CPR 36.10(1), as it then was, were avoided.

The parties could not agree on costs. The defendants arguedthattheclaimantsshouldhaveacceptedtheirofferof£25,000,made15monthsearlier,insteadofperpetuatingtheproceedings, and that it was unfair that they should bear all the costs. The judge found that the defendants had chosen toaccept theclaimants’offer,even though theycouldhavereminded theclaimantsof theirearlieroffer,whichhe foundwas a Part 36 offer that had not beenwithdrawn; and thata decisive factor was that the value of the claim net of the counterclaim was uncertain because the defendants had been unwilling to disclose the strengths and weaknesses of their case. He decided that it would not be unjust to apply the presumption in CPR 36.10(5) that the defendants pay the claimants’ costs.

02

‘…the task for the judge had been to make a value judgment as to whether it would be unjust to apply the presumption as to costs in CPR 36.10(5)...’Dismissing the defendants’ appeal, the Court of Appeal held that the task for the judge had been to make a value judgment as to whether it would be unjust to apply the presumption as to costs in CPR 36.10(5); that was a discretionary matter. Hehadbeenrighttofindthatthedefendants’earlierofferhad been a Part 36offer.Areasonablereaderwouldhaveunderstood it to be such.

The judge had been entitled to find that the claimantshad not been able to value the defendants’ counterclaim properlyatthetimeofthedefendants’offer.Iftheclaimantscouldbecriticisedfornotacceptingthedefendants’offer,thedefendantscouldhavemadeanewofferoutsidePart36. Other judges might have given more weight to the defendants’offer,butmattersofweightwerediscretionary,and the judge had acted within the ambit of his discretion.

03

LimitationThe case of South West Strategic Health Authority v Bay Island Voyages (2015) EWCA Civ 708 sees the court distinguishing between a convention time limit for bringing a claim for personal injury and the time limit for pursuing a claim for contribution.

The appellant’s employee had been injured during a work team-building outing on a rigid inflatable boat ownedand operated by the respondent. The employee sued the appellant employer for damages for personal injury and the employer issued a Part 20 claim against the respondent seeking a contribution to any liability.

Therespondentfiledadefencethatthecontributionclaimwas barred because it had not been issued within the two-year time limit in Article 16 of the Athens Convention 1974. A district judge granted the respondent summary judgment on the ground that the employee’s right to pursue the employer had been extinguished by the time limit expiring, and that therefore under S1(3) Civil Liability (Contribution) Act 1978 there was nothing on which the contribution claim could rely.

On appeal, the judge did not distinguish between the personal injury claim and the contribution claim and held that the contribution claim had been extinguished. The issues were (i) whether the Convention was directly applicable to the contribution claim; (ii) the nature of the time bar under Article 16.

‘The claim to contribution was autonomous and derived from the English domestic statutory entitlement to contribution’

Allowing the appeal, the Court of Appeal held that the Convention dealt with claims by passengers against carriers and with nothing else. It did not purport to be a complete code governing all liability of sea carriers in respect of carriage of passengers and their luggage. Rights of recourse between carriers and other parties were not mentioned in the Convention. An action in which a claim for contribution from the carrier was sought in respect of the employer’s liability for personal injury to its employee was not “an action for damages for...personal injury to a passenger... brought against a carrier”. The claim to contribution was autonomous and derived from the English domestic statutory entitlement to contribution. It was unsurprising that the claim in itself wasunaffectedbytheprovisionsoftheConvention. On the other hand, the carrier’s liability to contribute was critically dependent on its own liability to the passenger, which in turn was governed by the provisions of the Convention, including those as to limitation.

The language of Article 16 did not extinguish the right on which the claim was based: it was remedy-barring as opposed to right-extinguishing. However, it was appropriate to approach the effect ofArticle 16 having regard to the fact that it was the language of an international convention rather than a domestic statute. There was no corpus of international understanding pursuant to which the language of Article 16 should be regarded as extinguishing the right of action. The ultimate question was what the words meant, which was prompted by an exclusively domestic enquiry of whether the statutory right to contribution was excluded by reason of S1 (3) of the 1978 Act. Whilst the words used in Article 16 had an international or convention provenance, they did not have an autonomous and internationally understoodmeaning thatwasdifferent ineffect from thatwhich they naturally bore in the English language and as understood in English law.

04

Some relief at last for motor insurersOver the years it has become easier for motor insurers to deliver certificates of insurance under S147 Road Traffic Act 1988 but it remained a complex and relatively costly exercise to recover a certificate if itwas cancelledduring the currency of the policy but not surrendered by the policyholder. However, that problem has now been addressed in S9 Deregulation Act 2015.

Subsections 147(4) and (5) have been removed from S147 and the only requirement now is for the insurer which cancelsacertificateofinsurancetoupdateMID.Providedthat is done before an accident has occurred, the insurer will retain no liability to deal with resulting claims, which will fall tobedealtwithbyMIB.

These provisions came into force on 30 June 2015 and relate to policies cancelled on or after that date. Failure to notify MIDofthecancellationbeforeanaccidenthasoccurredwillresult in the insurer retaining Article 75 status. Article 75(2) (iii) has been amended accordingly. If a policy was cancelled before 30 June, the procedure remains the same and the insurer must take steps to recover the certificate or riskretaining RTA or Article 75 status.

Itisimportanttonotethattheseamendmentsdonotaffectthe situation where an accident occurs and it is subsequently discovered that the policyholder was guilty of a material non-disclosure or misrepresentation when proposing for the policy. It will still be necessary to apply for a declaration to reduce the insurer’s status from RTA to Article 75 (if it is worth doing so), addressing the requirements of the Consumer Insurance (Disclosure and Representations) Act 2012 where the driver was a private individual.

Insurers using this new procedure to cancel policies and come off risk will need to remember their duty to treatcustomers fairly and ensure that the grounds for cancelling the policy are valid.

The information and opinions contained in this document are not intended to be a comprehensive study, nor to provide legal advice, and should not be relied on or treated as a substitute for specific advice concerning individual situations. This document speaks as of its date and does not reflect any changes in law or practice after that date. Plexus Law and Greenwoods Solicitors are trading names of Parabis Law LLP, a Limited Liability Partnership incorporated in England & Wales. Reg No: OC315763. Registered office: 12 Dingwall Road, Croydon, CR0 2NA. Parabis Law LLP is authorised and regulated by the SRA.

www.plexuslaw.co.ukwww.greenwoods-solicitors.com

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