Qbe technical claims brief april 2010

Technical claims briefMonthly update – April 2010

Technical claims brief, monthly update – April 2010

Contents

Technical claims briefMonthly update April 2010News 1First Corporate ManslaughterAct trial adjourned 1U.K. government will not overturn Lords’decision on pleural plaques 1DWP launches consultation on assistingemployees to trace Employer’s LiabilityInsurance policies 2DWP to replace GP Sick Notes with“Statement of Fitness for Work” 3Irish High Court call for introduction of legalframework for periodical payments 3

Causation 4Death in custody, claimant unable torecover damages in respect of eventpartially caused by her: Diana Smith vYouth Justice Board for England andWales and Another – Court of Appeal (2010) 4Excessive speed not causative of collisionat junction, circumstantial evidenceconsidered: Murphy v Smith NewsTrading and Another – High Court (2010) 4

Credit Hire 5Spot hire rates, standard of evidence:Darren Bent v Highways and UtilitiesConstruction Ltd and Allianz Insurance –Court of Appeal (2010) 5

Fraud 6Court deliberately misled, no fresh actionfor fraud required: Mark Noble v MartinOwens – Court of Appeal (2010) 6

Liability 7Occupiers liability, foreseeability oftrespass: Paul Mann v Northern ElectricDistribution Ltd – Court of Appeal (2010) 7

Procedure 8Destruction of evidence, abuse of process:Celia Weaver (Widow....), Anita Gurney(Personal Representative....) v ContractServices Division Ltd – High Court (2009) 8

Disclaimer 9

NewsFirst Corporate ManslaughterAct trial adjournedThe trial of Cotswold Geotechnical HoldingsLtd and its Managing Director Mr PeterEaton for offences under the CorporateManslaughter and Corporate Homicide Act2007 and the Health and Safety at Work Act1974 has been adjourned until at leastOctober 2010.

The judge ordered an adjournment afterhearing submissions in private about “urgentmedical treatment” needed by Mr Eaton.

Comment: this is the first trial forCorporate Manslaughter and if aconviction is successfully obtainedthe Crown Prosecution Service may beencouraged to bring further prosecutionsunder the Act. Charges were first broughtback in April 2009 but further delay in theresolution of this case will now be inevitable.

U.K. government will notoverturn Lords’ decisionon pleural plaquesThe Ministry of Justice has announced thatfollowing its consultation on the issue it willnot “at this time” overturn the Lords’ decisionthat pleural plaques are not actionable.

The government will make one-off paymentsof £5,000 each to those claimants who hadbrought but not yet settled claims at thetime of the Lords’ ruling in October 2007.

The full announcement and furthermeasures to assist those exposedto asbestos can be viewed at:www.justice.gov.uk/about/pleural-plaques.htm

Comment: this is an encouragingdevelopment for insurers and othercompensators and is certainly better thanthe situation in Scotland where an Act toreverse the Lords ruling recently surviveda judicial review initiated by insurers (seeFebruary 2010 Brief). Whether this is the endof this issue however remains to be seen.


2

DWP launches consultation onassisting employees to traceEmployer’s Liability InsurancepoliciesThe DWP has launched a consultationdocument “Accessing Compensation-Supporting people who need to traceEmployer’s Liability Insurance” setting outthe government’s proposals to improvesupport for people who need to traceEmployer’s Liability Insurance policies inorder to obtain compensation for accidentsor industrial diseases arising from theiremployment.

The consultation has been promptedlargely by the difficulties faced byemployees suffering from diseases suchas Mesothelioma where symptoms maynot manifest themselves for decades afterexposure to asbestos. These employeescan face considerable difficulty in trackingdown the insurers of former employerswho may no longer be trading.

The consultation contains two mainproposals:

• The creation of an Employer’s LiabilityTracing Office (ELTO) to manage anelectronic database of EL policies andto manage the existing tracing service

• The creation of an Employer’s LiabilityInsurance Bureau (ELIB) as a fund oflast resort to compensate individualswho are unable to trace EL insurancepolicies for their former employers.

The consultation sets out a number ofspecific questions concerning the scope,funding and likely impact of the new bodiesand seeks the views of insurers, employeesand other interested parties.

Responses are invited by 5 May 2010.

Further information can be obtained at:Dwp.gov.uk/consultations/2010/accessing-compensation-elci.shtml

Comment: A private members bill aimedat creating an ELIB failed to secureparliamentary time for a second reading andwas dropped last year (see December 2009Brief) but continuing campaigning by TradeUnions and some MPs has kept uppressure for a fund of last resort forEmployer’s Liability claims. Whether such afund will successfully be established and ifso how it will operate remain to be seen.

QBE is preparing a detailed response to thisimportant consultation.

DWP to replace GP Sick Noteswith “Statement of Fitness forWork”• Effective from 6th April 2010 (subject

to parliamentary approval) , the DWPis replacing the “Sick Note” currentlyissued by GPs in the UK (excludingNorthern Ireland) with a “Statementof Fitness for Work “ or “Fit Note”

• The new “Fit Note” gives GPs theoption of classifying a patient as eithernot fit for work or may be fit for worktaking account of ....advice

• Under the second category the GPmay advise a phased return to work,amended duties, altered hours orworkplace adaptations

• If an employer is unable to provide thesupport recommended then a “may befit for work” statement can be treatedas “not fit for work” statement

• There is no obligation on an employer toimplement recommendations outlined ina “fit note”

• The maximum duration of a “fit note”will be three months as opposed tothe previous six months under theold regime

• Guidance for doctors, employersand employees can be viewed atwww.dwp.gov.uk/fit/note/

Comment: the new initiative is intendedto open a dialogue between employer andemployee about returning to work which willhopefully lead to an earlier return to work insome cases. The contents of these “fitnotes” will no doubt be of interest to claimshandlers where the patient involved ispursuing a claim for injury.

A comprehensive review of this reform willappear in an Issues Brief prepared by theQBE Rehabilitation Team on 6th April andcan be viewed atwww.qbeeurope.com/casualty/risk-management/qbe-issues.htm

Irish High Court call forintroduction of legalframework for periodicalpaymentsThe influential Irish High Court JudgeMr Justice John Quirke has fuelled newspeculation about the introduction ofPeriodical Payments in Ireland. Afterawarding a catastrophically injured claimantMs Claire Noone a lump sum of 4.25mEuros he again criticized the current Irishlaw which does not permit annual paymentsand which leaves seriously injured claimants,with uncertain life expectancy, “in a lotterysituation”.

He made these comments after hearing MsNoone’s family express concerns that thedamages would be insufficient to meetClaire’s care needs if she lived beyond theage of 63.

Mr Justice Quirke also expressed the hopethat the law would be changed within thenext 12 months.

Comment: the Irish Parliament has hadworking parties examining the issue ofPeriodical Payments at various times as farback as 1996. Whether Mr Justice Quirke’scomments are based on any concrete plansfor new legislation is unknown. Theintroduction of Periodical Payments inIreland would protect the position ofclaimant’s with uncertain longevity but ifintroduced on the same basis as in Englandand Wales would also increase the cost ofcatastrophic claim settlements.


4

CausationDeath in custody, claimantunable to recover damages inrespect of event partiallycaused by her: Diana Smithv Youth Justice Board forEngland and Wales andAnother – Court of Appeal(2010)A former training assistant sought damagesfor severe post traumatic stress disorderfollowing the death of a 15 year old inmatewhom she had restrained whilst working ina secure training centre.

The claimant had restrained the youth usingthe Seated Double Embrace (SDE) techniquetogether with two male colleagues. Thetechnique approved by her employerscauses the restrained person to experiencedifficulty in breathing. The deceased diedafter choking on his own vomit. The claimantsought damages on the basis that thedefendants had failed to keep the procedureunder review and had they done so theywould have banned SDE as a means ofrestraint and thus the death would havebeen prevented.

At first instance the judge dismissed theclaim on grounds of causation finding thatthe Ministry of Justice had breached theirduty care to the claimant in not reviewingthe SDE restraint technique but that areview would not in all probability haveled to it being abandoned.

The claimant appealed. The Court ofAppeal held that the judge at first instancewas wrong in finding that a professionalreview of SDE would not have led to it beingabandoned prior to the date of the incidentand the whole tragic sequence of eventsbeing avoided.

The Court of Appeal then went on toconsider the question of fairness. Theclaimant had applied a restraint technique

in breach of the rules governing its use andhad maintained it for seven minutes despitethe clear signs of the youth’s distress.The claimant herself together with hertwo colleagues was responsible for thedeath of the restrained youth and it wouldbe unjust for her to recover damages forits subsequent effect on her.

Comment: the “fairness” test in thisjudgement is of immediate relevanceto claims involving employees trained inrestraint techniques but could be arguedin a wider context where claimants havesuffered psychological injury due to eventspartly caused by their own negligence.

“Although......no credit goes to the HomeOffice for having kept in being the systemof restraint which enabled the tragedy tooccur, its actual occurrence was theresponsibility of the appellant herself,albeit with others. It would be rightlyregarded as unjust if she were to recoverdamages for its effect on her.”

Lord Justice Sedley

Excessive speed not causativeof collision at junction,circumstantial evidenceconsidered: Murphy v SmithNews Trading and Another –High Court (2010)The claimant was driving home after a partyin the early hours of the morning when hercar was struck in the side by the defendant’slorry at a traffic light controlled junction. Twopassengers in the car were killed and theclaimant and two other passengers sufferedserious injuries.

The claimant sought damages againstthe lorry driver alleging that he had driventhrough a red light and that he had beentravelling faster than the legal speed limit.The lorry driver maintained that it was the

claimant who had driven through a red light.The passengers sought damages againstboth drivers and all the claims wereconsolidated into one hearing.

At trial the judge held that on the balanceof probabilities it was the car driver who haddriven through the red light. She was youngand a relatively inexperienced driver whohad probably been confused by road workson the approach to the junction. The lorrydriver was a far more experienced driverand had resolutely maintained that the lightswere green in his favour from the outset.

The lorry had a tachograph fitted to it whichrecorded its speed as it approached thejunction as 37-38mph. The speed limitwas 30mph but on the facts of the casethis speed was not held to be causativeof the accident. Even if the lorry driver hadbeen travelling at 30mph he would still havebeen unable to avoid the claimant when shecrossed the junction in front of him. Therewas no liability on his part.

Comment: the judgment is a reminder thatfor excessive speed to give rise to liability inrespect of an accident it must be shown tobe causative. It is also a reminder that thecourts may rely on circumstantial evidenceto resolve liability where there is noindependent witness evidence to hand.

“...the available circumstantial evidencesupports the proposition that on thebalance of probabilities Ms Josie Murphycrossed the traffic lights against a redlight.

There is evidence that she was a youngand relatively inexperienced driver whohad passed her test 12 months before....Ifind that the position of the road works atthe junction and accompanying signagecaused her confusion.”

Mr Recorder Pittaway QC

Credit HireSpot hire rates, standardof evidence: Darren Bentv Highways and UtilitiesConstruction Ltd and AllianzInsurance – Court of Appeal(2010)Following a road traffic accident,professional footballer Darren Bent hireda car on a credit hire basis from AccidentExchange. He incurred over £63,000 incharges recovery of which was then soughtfrom the insurers of the driver of the vehiclewhich had collided with him (Allianz).

Following a long running dispute over theclaim for hire charges the Court of Appealheard an appeal on the issue of productionof evidence of spot hire rates in credithire cases.

The Court of Appeal held:

• Where a claimant had funds to hire acar and was not thus dependent oncredit hire then damages shouldnormally be assessed at spot hire ratesi.e. the market rate for a similar car

• Evidence of spot hire rates should notbe disregarded because it covered alater date than the date of hire, thecourt could make appropriateadjustments

• It was unnecessary to produceevidence of the spot rate for an exactlycomparable car; a judge who looked atrates for better and worse cars than theclaimants and calculated an averagewould not be in error.

The case will now be remitted for a re-trialon whether the claimant actually needed tohire an alternative car and the rates charged.

Comment: this is a helpful decision fordefendants making it easier for them toproduce evidence on spot rates andproviding useful guidance for the lowercourts which should ensure far greaterconsistency in their rulings.

We are grateful to Berryman Lace Mawerwho acted for the insurers for their noteon this case.


6

FraudCourt deliberately misled,no fresh action for fraudrequired: Mark Noble vMartin Owens – Court ofAppeal (2010)The claimant was knocked form hismotorbike by the defendant’s car sufferingserious orthopaedic injuries. Liability wasadmitted and damages were assessed inthe High Court at £3,397,766 inclusive ofinterest. The court had been told that theclaimant’s condition was little better thanthat of a paraplegic: he was largely confinedto a wheel chair and had substantialpermanent care needs.

Nine months after the High Court hearingthe Insurance Fraud Bureau received a tipoff from a member of the public telling themthat the claimant had greatly exaggeratedhis symptoms. The IFB informed thedefendant’s insurers who obtained a good

deal of surveillance evidence. Film of theclaimant showed him walking without aids,operating heavy machinery and lifting andbending with ease. The defendant’s medicalexperts when shown the footage couldhardly believe it was the same man theyhad examined.

The defendant’s insurers obtained aninjunction freezing a substantial portion ofthe claimant’s damages and applied for theaward to be set aside and a re-trial held. Theclaimant argued that the authorities on thisissue did not permit a re-trial and that thedefendants should commence a fresh actionfor fraud.

The Court of Appeal held that the evidenceof fraud was not incontrovertible and did notjustify setting aside the award of damages;this could only be done once fraud wasproved. They did however hold that it wasunnecessary “in this day and age” (i.e.since the advent of modern surveillance

equipment) for the defendants to have tocommence a fresh action for fraud. Thiswas a costly and circuitous road and inorder to do justice to the parties the mostappropriate course was to remit the caseback to the High Court for the original trialjudge to deal with the fraud issue.

Comment: the merits of post settlementsurveillance are frequently discussed byinsurers and other compensators. If thedefendant’s insurers in this case areeventually successful in recovering asubstantial part of their outlay then thistactic is likely to be more widely used.

Whatever the eventual outcome in thiscase, the Court of Appeal has set a usefulprecedent for defendants who wish to avoidthe expense and difficulty of commencingfresh proceedings where they have goodevidence of fraud.

LiabilityOccupiers liability,foreseeability of trespass:Paul Mann v Northern ElectricDistribution Ltd – Court ofAppeal (2010)The claimant at the age of 15 had climbedinto an electricity substation and came intocontact with a bus bar carrying 66,000volts. He suffered devastating burns andsubsequently lost one leg below the knee.

The claimant sought damages from thedefendant in respect of alleged breach ofthe Electricity Supply Regulations 1988requiring substations with live exposedequipment to be surrounded by a fence(or wall) at least 2.4 metres high. Thesubstation was surrounded by a wall of overfour metres in height topped with a rotatinganti-climb device (RACD). The claimant hadovercome these formidable obstacles byclimbing onto the top of adjacent railingsthen scaling a buttress and jumping from thetop of this over the RACD. This had requiredremarkable athleticism and the use of threepieces of wood inserted into the structureto give him purchase. The judge at firstinstance dismissed the claim holding that itwas not foreseeable that a trespasser wouldclimb the wall as the claimant had and thatthe defendants had done all that wasreasonably practical to prevent the entranceof trespassers.

The claimant appealed on the basis thatthe defendants had not discharged theirduty as occupiers simply by building a wallof the required height and that they hadfailed to fit RACD to all sides of the brickbuttress which the claimant had climbed.A subsidiary argument was that the wallerected was not actually of the requiredheight when measured from the top of therailings which the claimant had first scaled.

The Court of Appeal held that the regulationmight require the occupiers to takeadditional security measures, in additionto building a fence or wall of the requiredheight, depending on all of the surroundingfeatures. The Recorder at first instance hadbeen correct in enquiring into the reasonablepracticality of the steps that the claimantargued should have been taken.

The means adopted to climb the wallwas however found by the Recorderto be unforeseeable and that findingwas unassailable. Since the meanswas unforeseeable it was not reasonablypractical for the defendant to take stepsto prevent it. The subsidiary argument wasalso rejected with the court holding that theregulations referred to the wall’s height asmeasured from the ground.

Comment: the judgment illustrates that theCourt of Appeal will carefully examine themeasures taken by occupiers to preventtrespassers gaining entry to dangerousareas; security measures will be lookedat not in isolation but in all the surroundingsin which they are deployed. It also howeverillustrates that Court accepts that theactions of a determined and inventivetrespasser cannot always be foreseen.

“No amount of security measures willkeep out a sufficiently determinedtrespasser.”

Mr Recorder Fairwood


8

ProcedureDestruction of evidence, abuseof process: CeliaWeaver(Widow....), Anita Gurney(Personal Representative....)v Contract Services DivisionLtd – High Court (2009)The defendants sought to strike out theclaim brought by the widow and personalrepresentative of the estate of a formeremployee who had allegedly died due toasbestosis. The application was madeunder Civil Procedure Rule r3.4 followingthe discovery that lung tissue samples takenprior to the deceased’s death had beendestroyed on the claimants’ instructionsand despite advice that the defendantswere likely to object to this.

The defendants argued that the destructionof the tissue deprived them of obtaining vitalevidence on the level of asbestos exposuresustained by the deceased and that a fairtrial on causation was no longer possible.

It was held that the decision to destroythe tissue samples in the face of advicethat defendant would object to it amountedto an abuse of process making furtherproceedings unsatisfactory and preventingthe court from doing equal justice betweenthe parties. The deceased could not becross-examined and the defendants hadbeen deprived of the only means of obtainingpositive evidence on levels of exposure.

The claim was struck out and the claimantordered to pay the defendant’s costs.

Comment: the court in reaching thisjudgment followed the principle set out inthe 2000 Court of Appeal case of ArrowNominees Inc and Anr v Blackledge i.e.that the destruction of evidence amountsto an abuse of process where it creates asubstantial risk that a fair trial will no longerbe possible. The judge commented that

whilst the courts would be sympathetic tothe relatives of the deceased who wantedtissue samples destroyed for reasons ofprivacy or religious belief, they must acceptthat the destruction of evidence whichassisted the defence could prevent theirclaim from proceeding.

Completed 30 March 2010 – Copyjudgments and/or other sourcematerial for the above items maybe obtained from John Tutton(contact no: 01245 272756,e-mail: [email protected]).

DisclaimerThis publication has been produced by QBEInsurance (Europe) Ltd (“QIEL”). QIEL is acompany member of the QBE InsuranceGroup.

Readership of this publication does notcreate an insurer-client, or other businessor legal relationship.

This publication provides information aboutthe law to help you to understand andmanage risk within your organization. Legalinformation is not the same as legal advice.This publication does not purport to providea definitive statement of the law and is notintended to replace, nor may it be reliedupon as a substitute for, specific legal orother professional advice.

QIEL has acted in good faith to provide anaccurate publication. However, QIEL andthe QBE Group do not make any warrantiesor representations of any kind about thecontents of this publication, the accuracy ortimeliness of its contents, or the informationor explanations given.

QIEL and the QBE Group do not have anyduty to you, whether in contract, tort, understatute or otherwise with respect to or inconnection with this publication or theinformation contained within it.

QIEL and the QBE Group have no obligationto update this report or any informationcontained within it.

To the fullest extent permitted by law,QIEL and the QBE Group disclaim anyresponsibility or liability for any loss ordamage suffered or cost incurred by youor by any other person arising out of or inconnection with you or any other person’sreliance on this publication or on theinformation contained within it and forany omissions or inaccuracies.

QBE Insurance (Europe) Ltd and QBEUnderwriting Ltd are authorized andregulated by the Financial Services Authority.QBE Management Services (UK) Ltd andQBE Underwriting Services (UK) Ltd areboth Appointed Representatives of QBEInsurance (Europe) Ltd and QBEUnderwriting Ltd.

1810/TECHNICALCLAIMSBRIEF/APR2010

QBE European Operations

Plantation Place30 Fenchurch Street

LondonEC3M 3BD

tel +44 (0)20 7105 4000fax +44 (0)20 7105 4019

[email protected]

QBE European Operations is a trading name of QBE Insurance (Europe) Limited and QBE Underwriting Limited. QBE Insurance (Europe) Limited and QBE Underwriting Limitedare authorised and regulated by the Financial Services Authority. QBE Management Services (UK) Limited and QBE Underwriting Services (UK) Limited are both Appointed Representativesof QBE Insurance (Europe) Limited and QBE Underwriting Limited.

Qbe technical claims brief april 2010

Economy & Finance

Transcript of Qbe technical claims brief april 2010