Travelers Claims Bulletin 0908

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Travelers Claims Bulletin 0908 Powered By Docstoc
					Claims Legal Bulletin

A regular review of legal developments in the world of property and casualty insurance claims September 2008

LIABILITY FOR PSYCHIATRIC INJURY - UNWILLING PARTICIPANT Monk v PC Harrington Contractors Ltd & HTC Plant Ltd & Multiplex Construction UK Ltd - 2008 - QBD
The claimant was working under the control of the first defendant during the construction of Wembley stadium. A temporary platform became dislodged and fell 60ft to the ground injuring two of the claimant’s colleagues, one fatally. The claimant did not witness the accident, but attended in the immediate aftermath. He had been trained in first aid and attempted to provide assistance to his colleagues. The claimant was not physically injured, but went on to suffer post-traumatic stress disorder as a result of the incident. The first defendant had admitted liability for the accident. The claimant alleged that he was a primary victim and that he fulfilled the criteria either as a rescuer or as an unwilling participant in the cause of the accident. The court found that the claimant had provided assistance to the injured people, and that his involvement had been more than peripheral and entitled him to be regarded as a rescuer. However, he was not in danger, and could not reasonably have believed himself to be, and so could not claim damages as a rescuer. The claimant’s belief that he was the cause of the accident was not a reasonable one and, therefore, he should not recover damages as an unwilling participant. The claimant sought to argue that he need only have had a genuine belief that he had caused the accident, the court held by analogy that the test in relation to this is objective and, in the circumstances, he could not reasonably have felt that he was responsible for the accident. Comment This case provides some further clarity on who may be able to establish a claim for damages arising from psychiatric injury and when. It extends an objective test to someone who believes that they unwittingly, by their actions, contributed to the cause of the accident much like someone in the area of an accident when it occurs must reasonably believe themselves to be at risk of physical injury.

FRAUD - PHANTOM CLAIMANTS - COLLUSION SANCTIONS Ul-Haq & Khatoon & Parveen v Shah - 2008 - QBD
The High Court was required to consider how to deal with otherwise genuine claimants but who also participated in supporting another’s fraudulent claim. Liability had been admitted for the accident but the defendant sought a declaration that the second claimant (K) had not been in the car at the time of the accident, damages for deceit and the striking out of the otherwise genuine claims. The judge found that K’s claim was fraudulent and that the claimants had conspired in presenting that claim. Nonetheless the court was of the view that a judgement in respect of the genuine claims would be safe and dismissed the counter claims but ordered that the claimant pay 2/3 of the defendant’s costs on an indemnity basis to be off-set against the damages award. On appeal the High Court considered that the genuine claimant had participated rather than instigated the fraud and the misconduct was only in relation to the fraudulent claim not their own. Their action had increased costs and wasted court time but the lies did not prevent a fair trial of the other issues. The costs order made had deprived the claimants of any practical benefit from the proceedings and justly reflected the seriousness of their breaches of the overriding objective. Comment The court commented that these circumstances amounted to serious wrongdoing but not of the worst kind. The appeal did comment that the judge had exercised his discretion in a different and erroneous way, however, the outcome reflected the conduct. This decision does not appear overly helpful in the fight against fraud given the comments on the perceived seriousness of fabricating injuries and claims. This case should be considered mostly on its facts and the practical outcome. If there is a positive message it is that there is no practical benefit to be derived by pursuing false claims, however, the message could have been stronger.

PROCEDURE - UNLESS ORDER Tomer v Atlantic Cleaning Services Ltd & Anor - 2008- HC
The claimant failed to comply with an Unless Order relating to service of his schedule of special damages and, instead, wrote to the defendant confirming that there would be no such claim. Subsequently, the claimant served a schedule of loss and the claim proceeded to trial (neither the claimant or the defendant appreciated the effect of this order until alerted by the trial judge). At first instance the judge referred to the earlier Unless Order and held that the claimant could not now claim for special damages and he struck the claim out. He gave the claimant 28 days to apply for relief from sanctions. The claimant did not apply for relief but instead appealed the judge’s decision. The court held that the claim for special damages had been struck out by operation of the Unless Order but anyway even if that was wrong the claimant would still have had to have sought permission from the court to add this head of loss back into the claim. Any application for relief from sanction would have failed too because of the delay and lack of explanation as to why matters had progressed so slowly. The claimant sought to argue that the defendant had by conduct waived any breach by the claimant, this argument failed as the claim for special damages had never been properly before the court and the concept did not apply.

brought to his attention a law firm in Sheffield that undertook police misconduct cases. Further, the reasonable litigant would make himself aware of the comparative charges by consulting the Sheffield firm and the London firm and would have appreciated that there was a substantial difference in rates.

ASSESSMENT OF DAMAGES - FUTURE LOSS OF EARNINGS Collett v Smith & Middlesborough Football & Athletics Company - 2008 - QBD
This claim concerns a claim for the loss of earnings of a young professional footballer who retired due to an injury sustained through a tackle during a football match. The claimant was a talented young footballer who, by the time he was 16 years old, had been offered a two year scholarship contract and a one year professional contract to follow that by Manchester United Football Club. He suffered a fracture of the right tibia and fibula as a result of a negligent tackle by the first defendant during a football match. Both defendants admitted liability for the accident. The judge held that there was an overwhelming likelihood that the claimant would have been under contract with Manchester United until at least the age of 21. He was, therefore, awarded past loss of earnings, taking into account the risk of future injury and other possible contingencies. On the evidence it was clear that the claimant’s ex-colleagues with comparable and even lesser ability had now established careers with Championship clubs and higher. Therefore the judge decided that, barring some injury or other unforeseen event, the claimant would have played professional football at Championship level or above for the whole of his career. For the basis of the multiplier, it was decided that the claimant’s career in professional football would have lasted for a further 11 years with a good possibility that he would have played for a Premiership club. The claimant was, therefore, awarded £3,854,328 for future loss of earnings, which included deductions for the risk of future injury, other contingencies and deducting his earnings potential from a career in journalism. However, it was decided that the possibility of the claimant having a career in football management or coaching was too remote to form a basis for the award of damages. No award was therefore made for loss of chance. Comment This case is noteworthy if only for the high level of damages awarded for future loss of earnings, reportedly the highest ever given to a professional sportsman and perhaps the quality of the witness evidence marshalled in support of the claim.

COSTS - INSTRUCTION OF SOLICITOR OUTSIDE LOCAL AREA A v Chief Constable of South Yorkshire - 2008 - QBD
The claimant brought an action for damages arising from an unlawful search, detention and malicious prosecution as a result of which he developed paranoid schizophrenia. The claim was settled at £300,000. The Claim Form had been issued in London but the case was later transferred to Sheffield. Having initially instructed solicitors in Sheffield the claimant thereafter instructed a London firm which charged a much higher hourly rate. This appeal concerned cost proceedings and upheld a decision to assess his recoverable costs on the standard basis by reference to the reasonable costs of instructing a suitable solicitor in Sheffield rather than the higher costs of the London-based solicitor that he had instructed. When considering recoverable costs the judge had found that, in essence, this was a personal injury claim in which the issue of liability had been complex, and that a solicitor with experience of police matters ought to have been able to deal with the matter properly, with the assistance of experienced counsel if necessary. It had been incumbent on the claimant to make efforts to look for a different or specialist firm in the locality rather than perhaps the only firm heard of. A reasonable person would have been able to inquire about solicitors in Sheffield with experience of bringing claims against the police. Such inquiries would have

List of abbreviations used: CC HC QBD Ch D CA HL SCCO ECJ TCC County Court High Court Queens Bench Division of the High Court Chancery Division of the High Court Court of Appeal House of Lords Supreme Court Costs Office European Court of Justice Technology and Construction Court

The information contained in this bulletin does not represent a complete analysis of the topics presented and is provided for information purposes only. It is not intended as legal advice and no responsibility can be accepted by Travelers Insurance Company for any reliance placed upon it. Legal advice should always be obtained before applying any information to the particular circumstances.

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