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April 2011 Claims Legal Bulletin A regular review of legal developments in the world of property and casualty insurance claims MESOTHELIOMA - CAUSATION TEST Sienkiewicz v Greif Ltd and Knowsley M B C v Willmore - 2011 (SC) The defendants in both of these cases appealed to the Supreme Court to overturn Judgements that they were liable for mesothelioma which had been contracted by the respective claimants, allegedly from exposure to small amounts of asbestos dust. In the first case the claimant’s mother had worked in an office at a factory where steel drums were manufactured and where she had received “very light” exposure to asbestos. In the second case the claimant’s wife had been exposed to asbestos at her secondary school and again, this exposure was said to be small. The Court of Appeal had applied the principle in Fairchild v Glenhaven Funeral Services Ltd (2003) and found the defendants liable for having created a material increase in the risk of the deceaseds contracting mesothelioma even though, in the case of Sienkiewicz the trial judge had estimated that the risk had increased by just 18% over and above the general environmental risk that everyone has of developing the disease. The defendants argued that the general rule of causation should apply in that the risk should be, at least, doubled before the defendant can be liable and also that the “Fairchild exception” should not apply to single defendant cases. The Supreme Court, composed of seven Lord Justices rather than the usual five, held that Section 3 of the Compensation Act 2006 had added a special rule onto the decisions in Fairchild and Barker v Corus (2006) which had draconian consequences for an employer who had been responsible for only a small proportion of the overall exposure of a claimant to asbestos. The question of how much the risk had been materially increased before a defendant can be liable was a matter that was capable of further development but it was certainly possible for very light exposure to be regarded as “de minimus”. However, in both these cases the Supreme Court upheld the findings that there had been material increases in the risk of the claimants contracting mesothelioma and also that the Fairchild exception did apply to single defendant cases. It followed that the appeals would be dismissed and the judgements for the claimants upheld. Comment This case confirms the extent to which the principle of joint and several liability applies in cases of mesothelioma. The only positive note for defendants is that several of the Lord Justices considered the original findings that the claimants had been exposed to asbestos to be generous, and in the case of Willmore “truly heroic”. They suggested that the Fairchild exception adequately redresses claimants’ difficulties in proving causation and judges should resist the temptation to give the claimant’s case an additional boost by taking a lax approach to the basic elements of proving exposure. EXPERT WITNESS IMMUNITY Paul Wynne Jones v Sue Kane - 2011 (SC) The Supreme Court has removed the immunity from liability for negligence on expert witnesses by a majority of three to two. The case concerned an expert psychologist who had diagnosed post-traumatic stress disorder in her original report. The defendant’s expert concluded that the claimant was exaggerating his symptoms and a joint statement by the experts had been very damaging to the claimant’s case. It transpired that the claimant’s expert had signed the joint statement prepared by the defendant’s expert without any comment or amendment. As a result the claimant’s claim settled for a much smaller sum so he brought proceedings for professional negligence against the expert who pleaded witness immunity in accordance with the decision in Stanton v Callaghan (2000). The primary reason for witness immunity was so that the expert would not be afraid of giving evidence that might be contrary to his clients’ interests and which might result in claims against him and a reluctance to provide his services as an expert witness at all. Immunity did not extend to disciplinary proceedings or to wasted costs orders. Immunity for advocates has already been removed without discouraging them from participating in legal proceedings yet no consideration was given at that time to the immunity of expert witnesses. Insurance cover can be bought to protect the financial consequences but irrespective of that the expert’s duty is to the court and to give his honest opinion. A witness of integrity when faced with having to change his view would do so. The immunity that had previously been enjoyed by expert witnesses should be abolished. Lord Hope and Lady Hale, dissenting, considered that the incautious removal of immunity from one class of witness might destabilise the immunity given to witnesses generally. Without the full implications being reviewed to indicate what the effects might be suggested that the wiser course would have been to leave any reform of the law to Parliament. PROFESSIONAL NEGLIGENCE - EXPERT WITNESS Warner v (1)Penningtons (2)Coleman (3)Collender (4)De Navarro (5) Jaqueline Webb & Co - 2011 (CA) The claimant alleged that his personal injury claim had been settled at a sum substantially below its full value and alleged that this was due to the negligence of his solicitor in failing to set up a care regime that involved a case manager and a support worker as recommended by the expert care consultant instructed in the matter. Had this regime been set up before the trial his care needs would have been reconsidered and the claim commenced at a higher level. The defendant solicitor denied that the claim had been settled under its true value, but joined the care consultant in the proceedings on the basis that if it had been then the fault lay with her for failing to provide proper advice in her report. The expert witness care consultant applied for summary judgement dismissing the claim against her on the grounds that her report had indeed recommended that a care regime be set up and, as such, the claim against her had no reasonable prospects of success. The claim was struck out in the High Court and the Defendant appealed on the grounds that the wording of the report had to be taken in context after hearing the evidence. It did not matter what the solicitor or the barristers involved had understood the report to mean. The question was what a reasonable solicitor would have understood by the wording of the report and the matter was, therefore, suitable for summary determination. Whilst the wording could have been clearer, it had conveyed with reasonable clarity that a care regime should be set up as soon as possible. The judge had been entitled to grant summary judgement in her favour. Comment As well as denying all of the allegations against her the expert witness also claimed immunity from suit in her Third Party Defence. This aspect was stayed pending the decision of the Supreme Court in Jones v Kane (see above). WITHDRAWING A PRE-ACTION ADMISSION OF LIABILITY Woodland v (1)Stopford (2)Maxwell (3)Swimming Teachers’ Association - 2011 (CA) The claimant suffered hypoxic brain damage during a school swimming lesson at a local authority swimming pool when she was 10 years old. The letter of claim was acknowledged by claim handlers on behalf of the Third Defendant who later denied liability. The Health and Safety Executive had prepared a report into the incident and at the urging of the claimant’s father produced a second report which was sent, some five years later, to the claim handlers who then conceded liability. Eighteen months later, the Association retracted its admission of liability and the claimant commenced proceedings. The judge allowed the withdrawal of the admission under CPR rule 14.1A on the basis that the balance came down in favour of the defendant, albeit by a slender margin. The claimant appealed on the grounds that there had been no new evidence to prompt the withdrawal of the admission and there had been no proper explanation for the change of mind. Rule 14.1A(3) provided a wide discretion on the court to allow a withdrawal of an admission providing that all of the factors listed in the Practice Direction had been properly taken into account as well as all the circumstances of the case. In some cases the lack of new evidence and a proper explanation might be important factors but in others the extent of prejudice to one party or the other might provide the answer. The Association had given an explanation for their re-appraisal of the facts in that there had been insufficient investigation and they blamed the claim handlers for failing to take detailed statements from the individuals involved in addition to other failures. The Judge did have those factors in mind and had also carefully considered the prejudice to the parties, the stage in the proceedings which was not too late, the prospects of success which were still there and the overall interests of the administration of justice. He weighed the factors for and against and was entitled to decide that the balance came down in favour of the Association. LOCAL AUTHORITY - EMPLOYERS’ LIABILITY Vaile v Havering London Borough Council - 2011 (CA) The claimant was a teacher at a special school for children with learning difficulties where a pupil’s statement of special educational needs stated that he suffered from developmental delay. He had already attacked and bitten the claimant when a few weeks later he stabbed her with a pencil and shook her head violently causing severe physical and psychological injuries preventing her from ever working again. She sued the Local Authority for failing to provide a safe system of work on the grounds that they should have treated the pupil as if he was autistic, removed him from her class after the first attack, carried out a risk assessment as to the danger he presented to her and referred him to the specialist Treatment and Education of Autistic and related Communication Handicapped Children (TEACCH) to consider whether he was safe to be in the classroom. At first instance the court found that the Local Authority had been deficient in its duty to identify the pupil as having an autistic spectrum disorder (ASD) and failing to have a highly structured approach to his teaching given that the claimant was not trained in TEACCH procedures but, nevertheless, there was no evidence to suggest that the teaching system for him was unacceptable or inadequate or that no safe system of work had been provided for the claimant. Even if there had been negligence on the part of the Local Authority it was not causative of the attack and the consequent injuries. The Court of Appeal found that the Judge’s findings led one to the conclusion that there had not been a safe system of work. Had the pupil’s ASD been identified the claimant would have been instructed in the appropriate TEACCH techniques. Once negligence had been established the causation finding also fell away because the injury was of a type that would normally be expected from the failure and it was not necessary for the claimant to show the precise mechanism in which the failure caused the injury. If proper care had been taken over the relevant period the probability was that she would not have suffered the injury. The Appeal was allowed and the case remitted for damages to be assessed. DISCLOSURE OF SURVEILLANCE EVIDENCE Douglass v O’Neill - 2011 (QBD) The claimant suffered serious injuries in an accident when he was knocked down by the defendant’s vehicle. He sustained multiple injuries and there were medical disputes about the severity of his long term brain damage and the degree to which his mobility had been reduced. The claimant repeatedly failed to comply with the directions for service of his witness statement and experts’ reports. They were eventually served 15 months after they were originally due and only three months before trial. Shortly after they were served, the defendant disclosed surveillance DVDs showing the claimant carrying out various activities which the defendant’s medical experts said were incompatible with the symptoms and disabilities presented during his medical assessments. Leave was sought to adduce the DVDs at the trial. The court held that the surveillance footage was a document, not witness evidence, and was privileged unless the defendant chose to waive privilege. It was a legitimate investigation and if part of standard disclosure would alert a fraudulent claimant to the surveillance evidence and prevent a defendant from obtaining further evidence. It had been disclosed at the first opportunity after the claimant had stated his case by the service of his medical evidence and witness statement and despite being close to trial it had not been delayed by any attempt to take an unfair advantage or an attempt to “ambush” the claimant. The defendant’s application was granted. CASE MANAGEMENT - FRAUD Locke v Stuart and AXA Corporate Solutions Services Ltd - 2011 (EWHC) The second defendant had proved to the necessary standard that the “accident” had been staged to justify the making of claims for personal injuries but far too much documentation had been placed before the court. Guidance was given that in future such cases a document should be prepared which summarised the evidence so far as the primary facts were concerned, identifying which primary facts were in dispute so that the necessary material could be adduced to deal with that. A document could also be produced which set out how entries on Facebook were created and what inferences might be safely drawn from them. This document could be used in other such cases where this class of evidence was adduced. POST SETTLEMENT ALLEGATION OF FRAUD Noble v Owens — 2011 (QBD) This case was remitted to the High Court by the Court of Appeal to determine the issue of alleged fraud. The claimant had been awarded £397,000 in damages which had been based on a severe impairment of mobility and which medical evidence had confirmed would be unlikely to improve. The claimant had also expressed an intention to buy the care and facilities on which the award had been calculated, yet he and his partner had purchased a property with adjoining land. Surveillance showed him carrying out various activities on the land without aids such as crutches. The defendant also referred to the claimant’s false accounting to the Revenue revealed in the first trial. The burden was on the defendant to prove the allegations of dishonesty. Medical evidence confirmed that it was possible for further improvement in the claimant’s medical condition and the fact that he had not spent his damages on the services they had been awarded for could be said to have compensated him for his loss of amenity. It was accepted that part of his improved mobility was achieved by an over-reliance on painkillers and it did not follow that the claimant could do every day, that which he was shown doing on the surveillance footage. Although there were reservations regarding some aspects of the claimant’s evidence he had been determined to try to walk unaided and had not dishonestly concealed his true state of disability or dishonestly emphasised his disability and the claim he had misled the court was dismissed. COSTS — LORD JUSTICE JACKSON’S PROPOSALS The Government has announced its intention to proceed with many of the recommendations made in the Jackson report for reforming the Civil Justice system particularly in relation to legal costs in personal injury claims. Many of the much heralded changes will be implemented including success fees and ATE premiums no longer being recoverable, a 10% increase in general damages, qualified one way costs shifting and a proportionality test for the recoverability of legal costs. Other changes will include a revamp of Part 36 offers, the possible increase in the value of Small Claims track cases to £15,000 (excluding personal injury) and increased rates for litigants in person to encourage them to conduct cases without lawyers. Full details are available at “http://www.justice.gov.uk/consultations/jackson-review-151110.htm” The information contained in this bulletin does not represent a List of abbreviations used: complete analysis of the topics presented and is provided for CA Court of Appeal information purposes only. It is not intended as legal advice and no CC County Court responsibility can be accepted by Travelers Insurance Company for Ch D Chancery Division of the High Court any reliance placed upon it. Legal advice should always be obtained ECHR European Court of Human Rights before applying any information to the particular circumstances. 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