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8/13/2019 QBE Liability Roundup
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QBE European Operations
Liability round-up
of 2013
8/13/2019 QBE Liability Roundup
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Liability round-upof 2013
2013 a year of change 1
Jackson and Ministry of Justice reforms 2
Liability 3
Mesothelioma 5
Fraud 6
Scotland 7
Whats on the horizon 8
Disclaimer 9
Contents
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1QBE Liability round-up of 2013
It was a long and expensive road to reform,
but 2013 inally saw the realisation of
many of Lord Justice Jacksons proposals.After much debate, the Ministry of Justice
inally took the bull by the horns, resisted
lastminute objections, and introduced the
most signiicant reforms to the civil justice
system since Lord Woolfs reforms of the
Civil Procedure Rules in 1998.
Not long after, the government added the
Enterprise and Regulatory Reform Act to
the statute book. The aim being to cut
through some of the perceived health and
safety red tape and limit employers liability
claims to acts of negligence. Whether the
Act has a signiicant impact remains to beseen, but few currently see it as a game
changer.
Fraud remains high on the agenda and
2013 saw the continued, and welcomed,
support of the judiciary. FollowingSummers v Fairclough Homes Ltd,judges
are inally prepared to impose the most
severe penalty in the civil arena strikeout
of the entire claim which can be used in
tandem with criminal contempt of court
proceedings and custodial sentences. A
number of decisions have kept fraud in
the spotlight throughout 2013. Of concern,
reported levels of fraud across all lines
of business continue to rise, and whilst
detection is improving, the penalties
imposed do not appear to be acting as a
deterrent to committed fraudsters.
We also saw the Supreme Court lexing
their muscles in Woodland v Essex County
Council,by extending the scope of non
delegable duties. This landmark decision
could have signiicant ramiications for
local authorities, but also underlinesthe increasing frequency of claimants
endeavouring to push the boundaries of
duty of care and vicarious liability.
With so much change in the space
of 12 months, an air of uncertainty is
understandable and many have been left
with more questions than answers. An
important one is whether interested parties
will be able to take stock and gettogrips
with the extremely fastevolving claims
landscape.
2013 a yearof change
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Those of you with a good memory will
remember reading about the case of
Woodland v Essex County Councilin last
years Liability Roundup (page 6). At that
time, the Court of Appeal had decided
it was inappropriate to extend a local
authoritys nondelegable duty of care. The
claimant appealed to the Supreme Court.
The claim followed a tragic accident when
a school pupil nearly drowned and was left
with severe brain damage. The swimming
pool was run by another local authority and
the lesson was supervised by a teacher and
lifeguard who were employed by a private
company. Essex CC had delegated their
duty of care with regard to the provision
of the swimming lesson, relying upon a
common law duty to take reasonable steps
to ensure the teacher and lifeguard
were competent.
Reversing the Court of Appeal decision,
the Supreme Court unanimously held that
Essex CC was liable for the negligence of
an independent contractor, without fault
on its part. The court prescribed limited
circumstances where a nondelegable duty
of care may arise, but the decision stems
from the authoritys acceptance of the
pupil into its care to teach and supervise.
Swimming lessons were an integral part
of the schools teaching function and their
control of the Claimant.
In an effort to limit the duty, the Supreme
Court did say that schools will not be liable
for the negligence of third parties carrying
out extracurricular activities, where the
school has not assumed responsibility for
those activities.
Worryingly, by extending the non
delegable duty of care, the court may
have opened other avenues for claimants
to pursue. What is clear from this decision
is that the Supreme Court may be
persuaded to overturn previous case law,
where a claimant risks being left without
compensation due to negligence of an
uninsured third party.
In Woodland,she was forced to sue the
local authority due to inadequate insurance
provisions of the third party independent
contractors. This case serves as a useful
reminder that all private contractors must
have an insurance policy that contains an
adequate limit of indemnity, and they agree
to a binding contractual indemnity in the
event of negligent acts or omissions.
Liability
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In three similar cases, Cockbill v Riley,
Risk v Rose Bruford College and Uren
v Ministry of Defence and others,the
claimants tragically suffered the most
severe injuries and as with Woodland the
importance of establishing a duty of care
was fundamental. Each accident involved
the claimants jumping into a paddling pool
the irst in a private domestic scenario, the
second at a drama school events day and
the third at a charity Its a Knockout.
Mr Riley was holding a party for his
daughter and her friends following the
completion of their GCSE exams. A limited
amount of alcohol was allowed and one of
the friends had brought a shallow paddling
pool for the garden. Mr Riley had insisted
it was situated away from some steps to
avoid diving.
Tragically, Mr Cockbill decided to bellylop
into the pool, but got his angle wrong and
dived in head irst, suffering a broken neck.His case was that there was a foreseeable
risk of signiicant injury and that Mr Riley
should have carried out a risk assessment.
The court disagreed and conirmed Mr
Rileys duty of care was limited to keeping
an eye on behaviour and intervening in
a reasonable manner where necessary.
There was no evidence that there was a
foreseeable risk of signiicant injury and Mr
Riley was not required to tell guests not to
run or jump into the pool.
The second claim followed Mr Risk jumping
into a small inlatable pool headirst,
leaving him tetraplegic. He had been
attending a day of events at the defendants
drama school. Mr Risks case was that
the college owned him a duty of care to
take appropriate steps to prevent him
from injuring himself, to make a suitable
risk assessment and to provide proper
supervision.
The court disagreed and decided that the
college did not owe the claimant more than
a general duty of care under section 2 of
the Occupiers Liability Act 1957. Mr Risk
was of full age, did not lack mental capacityand was not required to dive into the pool.
An occupier would only owe an additional
duty to protect against obvious risks or
selfinlicted harm where a person had no
genuine and informed choice or lacked
mental capacity.
The claimant had created an obvious and
serious risk by acting in the manner he
did. Knowledge of a potential risk was only
relevant in terms of breach, and in this case,
the court found that the defendant had not
assumed responsibility for the matters that
remained within the claimants personalsphere as they had not carried out any
proper risk assessments and had not put in
place any control measures. Judgment was
therefore, in favour of the defendant.
Finally, Mr Uren was competing at a charity
day, in an event which involved retrieving
plastic fruit from a shallow paddling pool.
Approximately half the participants chose
to enter head irst. Mr Uren attempted the
same, only to catch his feet on the side
and hit his head on the bottom, suffering
catastrophic injuries.
The court concluded that any proper
appraisal of the activity would have
revealed a risk of serious injury. The task
being undertaken, the presence of water
and height of the side of the pool, meant
competitors heads would be moving
downwards on entry. On the balance
of probabilities, if head irst entry had
been prohibited, the accident and injury
would have been avoided. The claimant
succeeded in establishing the negligence
was causative of his injury.
It is important to remember that each case
will be decided on its facts, but on readingthese cases, some occupiers may be left
uncertain as to their duties. Those who
voluntarily take a risk will not usually be
compensated, but where occupiers are
arranging events, it would sensible for them
to think about the safety rules beforehand.
An interesting case north of the border
involved a golfer who lost the sight in one
eye, after he was struck by a fellow players
errant ball. In Phee v Gordon & Niddry
Castle Golf Club,the unfortunate Mr Phee
sued the other golfer and the club, alleging
negligence on the part of the golfer andfailure of the club to erect appropriate signs
to safeguard golfers safety.
The appeal court in Scotland decided
both defendants were liable, with the golf
club bearing 80% and Mr Gordon 20%.
The court considered the course layout,
the safety practices and the absence of
any warning signs. The failure to warn by
signage meant the club must bear the
greater share of liability. Mr Phee recovered
damages of 400,000. The criticisms
from the court should be considered by all
sporting venues.
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5QBE Liability round-up of 2013
2013 saw a number of developments
concerning mesothelioma claims. Whilst
these claims were exempted from LordJacksons reforms so that claimants
would continue to recover success fees and
ATE premiums, as well as the 10% general
damages uplift the government have
shown a willingness to plug the gaps.
To tackle the problem of victims being left
without compensation, the government
announced the Mesothelioma Bill, which
awaits Royal Assent. Claimants who cannot
trace their employer, or the insurer, will
be able to pursue a claim via the Diffuse
Mesothelioma Payments Scheme and
will recover 75% of the average payout.The Scheme is being funded by insurers
contributing 3% of their premiums.
More positive action has seen the
government align these claims with
other personal injury claims and remove
the recovery of success fees and ATE
premiums from July 2014. Despite
opposition from claimant lawyers, there
was no sustainable argument to support a
continued exemption. This action should
help to reduce the disproportionate and
excessive costs seen from many irms.
Disappointingly, the inal announcement
saw the abandonment of a proposed
Mesothelioma PreAction Protocol. The
hope was to create a speciicallytailored
protocol, which would streamline the
claims process and result in less litigation.
Objections from claimant lawyers forced
the government to scrap the proposal
and the ixed costs that would have come
with it, but now under consideration is an
electronic case management system.
Mesothelioma
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QBE enjoyed successful contempt of
court proceedings in the case ofAirbus
Operations Ltd v Roberts. Mr Robertshad claimed more than 500,000 in
damages from his employer, Airbus. He
said he was left severely disabled following
a straightforward slipping accident, he was
unable to work and required extensive care.
Surveillance evidence showed Mr Roberts
renovating a house without any sign of
physical diiculty to the contrary, he
was seen lifting a bath and other heavy
items. For the majority of the footage, he
was seen to be smiling, laughing, whistling
and even skipping, whilst he worked. Mr
Roberts reported no miraculous recoveryand when faced with such fraudulent
dishonestly, the court was left with no
option than to sentence him to six months
at her majestys pleasure.
Hot on the heels of Robertscame the
contempt proceedings in Homes for
Haringey v Fari. The claim in excess of
750,000 had been struckout the
claimant had suffered no more than a
minor injury, with damages equivalent
to 0.5% of her pleaded case. The court
concluded that Mrs Fari was well aware of
the content and purpose of her evidence,and schedule of loss, and there had been a
serious and deliberate attempt
to mislead.
In an attempt to send out a clear message
to fraudsters, the judge said that those who
made false claims should expect to go to
prison. Having regard to the seriousness of
her conduct, the court sentenced Mrs Fari
to three months in prison.
Finally came the decision in Plana v First
Capital East Ltd.The claim followed
a workplace accident in 2007, with MrPlana alleging traumatic brain injury and
submitting a schedule of loss totalling 3m.
He claimed to require virtually constant
care and supervision, with almost
daily blackouts.
Again, surveillance evidence was obtained
and showed Mr Plana working at a car
wash, without diiculty. First Capital
successfully applied to strikeout the claim
as Mr Planas conduct was a clear abuse of
the court process, was likely to obstruct the
just disposal of the claim and therefore he
had forfeited his right to pursue the case.
The case has now been submitted to the
High Court for contempt proceedings.
Fraud
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Scotland
With those northoftheborder not
wanting to feel left out, a number of
Scottish government consultations led to
the Taylor Review Report, Courts Reform
Bill and the Damages Bill.
Sheriff Principal Taylor reviewed funding
and expenses of civil litigation in Scotland,
with the aim of deciding how best to
improve access to justice, but also with
regard to the recoverability and predictably
of expenses. He recommended theextension of DBAs, the introduction of
QOCS, the recovery of expenses on an
hourly rate basis and increased court
management of expenses. The report is
with Scottish Ministers for consideration.
The Courts Reform Bill details Lord Gills
review of the Scottish justice system,
with the aim of reducing delays and
expenses for court users. The main
recommendations are: raising the limit
in the sheriff court to 150,000, creating
a new Sheriff Appeal Court, creating a
specialist personal injury court, improving
and modernising the Court of Session and
promoting Alternative Dispute Resolution.
Again, the Bill will be debated by parliament
and with approval it could be enacted by
December 2014.
The inal announcement concerned
the Damages Bill. This followed a recent
consultation on personal injury claims and
the civil law of damages. It is understood
that the Bill is one of the legislative priorities
of 2014 and intends to increase the limitation
period from 3 to 5 years and to provide the
courts with the power to impose periodical
payment orders. Such an increase is likely to
prolong claim lifecycles, act as a disincentive
to prepare a claim in a timely fashion and
increase solicitors costs. Whilst the power
to order periodical payments is sensible for
high value claims, it is hoped that Ministers
will see sense and drop the proposal to
increase the limitation period.
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A ripple effect from the signiicant changes
of 2013 is inevitable the intended and
some unintended consequences will be
felt by all stakeholders involved in liability
claims. With the stakes so high, we can
expect new and innovative strategies and
tactics to be employed by claimant irms
who are ighting for their lives. Avoiding
portal costs will be a priority.
The government has recently made some
bold promises on tackling whiplash claimsand has already slashed solicitors costs.
The effect may be twofold: irstly, claimant
lawyers will have to explore other revenue
avenues and secondly, fraudsters will target
less wellprotected areas. The lucrative
area of noiseinduced hearing loss has
seen a signiicant spike in claims. This looks
set to continue, and whilst repudiation
rates are high, the sheer volume of claims
presents signiicant challenges. A new
battleground is forming.
Something which is back with the
government is the review of the discount
rate, which is used to calculate future loss
claims. The rate which has been static at
2.5% since 2001 has been the subject ofgovernment consultation, with a recently
published Ministry of Justice report hinting
at a decrease. Any decrease could add
hundreds of millions to the aggregated
compensation bill of the UK even a
reduction of 1% could add millions of
pounds to the value of the largest claims.
Set against increasing costs for continuingcare and prosthetics, catastrophic injury
claims inlation continues to spiral upwards.
The government has thus far given no
indication of when a discount rate decision
will be made.
As we have seen in Woodland, and other
cases, the courts are being repeatedly
asked to revisit and consider where a duty
of care may apply. It is reasonably safe to
assume we can expect to see this trend
continue into areas such as education and
abuse claims.
That said, it is not all doomandgloom
the Jackson and MoJ reforms present
a number of clear opportunities which
should be grasped with both hands. Those
insurers who can come to terms with, and
embrace the reforms, should be able to see
a bright future on the horizon.
Whats on thehorizon
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QBE European Operations is a trading name of QBE Insurance (Europe) Limited and QBE Underwriting Limited, both of which are authorised
by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
DisclaimerThis publication has been produced by
QBE European Operations, a trading name
of QBE Insurance (Europe) Ltd (QIEL).
QIEL is a company member of the QBE
Insurance Group (QBE 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 legaladvice. This publication does not purport
to provide a deinitive statement of the law
and is not intended to replace, nor may it
be relied upon as a substitute for, speciic
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 anyduty to you, whether in contract, tort, under
statute or otherwise with respect to or in
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obligation to update this report or any
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To the fullest extent permitted by law,QIEL and the QBE Group disclaim any
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Author
Tim Hayward
Tim joined the insurance industry in 1997,
working in motor, and then liability claims,for a major UK insurer. He specialised
in insurance claims litigation, studying
part-time for 4 years, before qualifying as
a Solicitor in 2011.
Working within QBE EO Technical Claims,
Tim deals with high value and complex
UK casualty claims, as well as providing
technical advice internally and to key
stakeholders. Tim is the author of the
monthly QBE publication, Technical
Claims Brief.