Personal Injury Update - June 2008
10 Jun 2008Editors: Nigel Spencer Ley & Huw Protheroe Davies
CONTENTS
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Quintin Fraser |
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FARRAR’S BUILDING NEWS – Huw P. Davies
In this month’s newsletter John Leighton Williams Q.C considers the assessment of damages in Fatal Accidents Act claims and whether the decision Cookson v Knowles is on its last legs. Helen Hobhouse reviews the law on harassment and bullying in the workplace, whilst Alan Jeffreys Q.C examines the possibility of obtaining declarations of non-liability from the courts in light of the recent decision of Toropdar v EIDHA.
The case update was prepared by Quintin Fraser
IS COOKSON V KNOWLES ON ITS LAST LEGS? – John Leighton Williams QC
Time is running out for Cookson v Knowles[1] which for almost 30 years has set the guidelines for the assessment of damages in Fatal Accidents Act claims. In Cookson the House of Lords decided that :
- the multiplier should be assessed as at date of death;
- the multiplicand as at date of trial ;
- the loss from death to trial treated as special damage ;
- the balance of the multiplier should be applied to the multiplicand to calculate future loss of dependency
- interest should be awarded on the past loss at half the special investment rate, for being kept out of that money ;
- there should be no interest awarded on future loss of dependency because, it was said, such loss had yet to be sustained.
The decision did not go without criticism at the time, the obvious point of attack being that where trial did not take place for a considerable time then the years attaching to past loss could leave very few years of the multiplier left for future loss of dependency. For example, where the deceased died at say 30 years of age but trial did not take place until 6 years later, which was not unusual in those days, the then multiplier of 15 would have 6 years taken out of it for past loss leaving only 9 for the future[2]. Yet a typical 30 year old would otherwise have been alive at the date of trial. And had he been injured and not killed the multiplier would have been assessed at the date of trial. Thus a negligent defendant could be financially better off causing death rather than serious injury.
Since Cookson the assessment of damages in personal injuries actions has become an increasingly sophisticated process which started with the first edition of the Ogden Tables in 1985. But early attempts to apply the tables met judicial distrust of actuarial evidence[3] and it was not until 1998 with the House of Lords decision in Wells v Wells[4], where Lord Lloyd said that in future, actuarial tables should be the starting point rather than a check for the calculation of future loss in personal injuries cases, that the argument began to speed up. But Wells and its associated cases were cases of live claimants. Wells made no comment on the calculation of loss in fatal claims and in 1998. And although the Ogden Tables were meant to be applied in both personal injuries and fatal claims, there were no actuarial tables tailored specifically to fatal claims.
Impetus to reform in fatal claims came in 1999 when The Law Commission published its report "Claims for Wrongful Death". The report criticised the approach in Cookson describing it as irrational and pointing out that since it concentrated on expectation of life as at date of death it contained within it a dual inaccuracy : past loss was calculated as a certainty and thus the possibility of death in that period was ignored ; and future loss was calculated on the basis that death had already occurred which could lead to substantial under compensation. Whilst over compensation for the past was not likely to be excessive under compensation for the future could be considerable. The Report recommended change and, specifically, that the Ogden Committee should consider and explain more fully how the tables could be used or amended to produce accurate assessments in fatal cases.
The Ogden Committee considered the Law Commission’s criticisms valid and in 2000 produced new tables which allowed inter alia for the chance that the deceased might not have survived to date of trial of death and calculated future dependency loss with the multiplier assessed as at date of trial.
However, the rule of precedent, a strong force in the development of English Law can also be a limiting factor. Judges have continued to consider themselves bound by the Cookson guidance despite the changed approach suggested and catered for by the Ogden Tables. In White v ESAB Group (UK) Ltd 2002 PIQR Q6 Nelson J at first instance accepted the Law Commission’s arguments but nevertheless felt constrained by Cookson to hold that the multiplier had to be assessed at date of death.
The Court of Appeal has now stepped in to the fray with the decision in A Train and Sons Ltd v Fletcher [2008] EWCA Civ 413.
In Train, the deceased died of mesothelioma in October 2004. The parties had agreed the loss of dependency at £197,087.30 comprising agreed figures of £35,184.10 for past loss of dependency from death at age 56 to trial, £39,213.62 for future loss of dependency from trial to age of retirement and £122,689.58 for the post retirement dependency. The basis upon which these figures were agreed does not appear from the report. Counsel for the Claimant sought interest not merely on loss from date of death to trial but on the whole award and at the full short term investment account rate, on the basis that since the whole award, in accordance with Cookson, was assessed notionally at the date of death, the Claimant had been kept out of the money from that date. Judge Holman at Manchester County Court, following what appear to have been limited submissions in which he was referred to Cookson but not the detail in the speeches, acceded to the Claimant’s submission. In the result, instead of awarding interest of £2,594.83 on the conventional basis he awarded £29,070.37. The Defendants appealed.
The dependency figures had been agreed and were not be the subject of appeal. The court was concerned solely with the award of interest. But since the basis of the judge’s award rested on the reasoning underlying Cookson, consideration of the former inevitably involved consideration of the latter. The Claimant sought to get around Cookson by arguing that the decision only lay down a guideline which it was open to the court to revise in view of the widespread criticism that Cookson had received ; and that the new Ogden Tables now offered the appropriate guidance.
The Court of Appeal felt unable to take this course and depart from the Cookson guidelines, which it considered were clearly set out in particular in the speeches of Lords Diplock and Fraser, who had also considered the question of entitlement to interest. But the court stated that following the Law Commission Report, the revised Ogden Table produced in response to the report, and the decision in Wells stating that actuarial tables were now to be the starting point the time was, in the opinion of Sir Mark Potter, The President of the Family Division who gave the lead judgement ripe for reconsideration. Hooper LJ said he hoped the House of Lords would reconsider the position, considered it illogical that where the multiplier was based on the assumption that the amount of money required would be paid at death that interest should not run on the whole sum from that date and had difficulty in understanding why the chronological years of past loss are deducted from the actuarial years comprising the multiplier. Moses LJ agreed with both judgements.
Train was going to be appealed to the House of Lords but it is understood that the action has since been compromised. The battle therefore remains to be fought on another day. But with such firm views expressed by the Court of Appeal, coupled with the criticism that Cookson has received, anyone seeking to overturn Cookson would go to the House of Lords with a following wind. Should the House decide that multipliers in fatal cases should be assessed at date of trial rather than date of death, the basis for seeking interest on the full award will fall by the wayside for lack of underpinning. But should the House continue to opt for date of death then the argument for interest on the full award takes on strength. Either way it appears claimants are on to a winner and insurers will have another increase in awards to cope with.
JOHN LEIGHTON WILLIAMS QC
HARASSMENT AND BULLYING IN THE WORKPLACE – Helen Hobhouse
When the House of Lords handed down judgment in Majrowski v Guys and St Thomas’ NHS Trust [2006] 3 WLR 125 the commonly held view was that victims of harassment and bullying at work now had a significant new weapon in their armoury.
The claimant in Majrowski was a clinical auditor at St Thomas’ Hospital who alleged that he was subjected to bullying by his female departmental manager. Mr Majrowski complained that his manager was excessively critical of his time keeping at work and that she imposed unrealistic performance targets for him and threatened him with disciplinary action if he failed to meet them. She was rude and abusive to him in front of other people but refused to talk to him face to face.
Mr Majrowski brought proceedings against his employers claiming damages pursuant to section 3 of the Protection from Harassment Act 1997. He did not allege that he had suffered personal injury as a result of his manager’s conduct and did not make any claim in negligence or breach of contract. His claim was for distress and anxiety and consequential loss and was based exclusively on his employers’ vicarious liability for his manager’s alleged breach of the statutory prohibition of harassment.
The proceedings were struck out at first instance but were reinstated on appeal. The matter then went to the House of Lords who upheld the majority view of the Court of Appeal and held that employers could be vicariously liable for this form of statutory wrong.
The question of what conduct is capable of amounting to harassment under the 1997 Act was not the primary focus of the judgments in Majrowski but earlier case law (Thomas v News Group Newspapers (2001) EWCA Civ 1233) had suggested that the conduct complained of should satisfy at least 4 basic criteria,
i.e. it should:
occur on at least 2 occasions;
be targeted at the claimant;
be calculated in an objective sense to cause distress;
be objectively judged to be oppressive and unreasonable.
This broad based definition certainly seemed to leave the way open for victims of bullying and harassment at work to claim damages under the 1997 Act.
In the recent case of Conn v Sunderland City Council [2007] EWCA Civ 1492, however, the Court of Appeal ruled that a claimant seeking to bring a claim under the 1997 Act must satisfy a much stricter test and that the conduct in issue must in effect be of such gravity as to justify the sanctions of the criminal law. What inhibits a potential claim even further, and is well illustrated in Conn, is the additional remaining necessity that there must be a course of such conduct.
In Conn the claimant worked as a paver for Sunderland City Council and complained of his treatment at the hands of his foreman. Two out of five incidents of impugned conduct were accepted as fact and fell to be assessed as to whether they constituted harassment. The first incident involved the foreman asking Mr Conn to provide information on fellow colleagues leaving site early. When this was refused the foreman became angry, threatened to punch out the windows of the cabin in which they were both standing and to refer the matter to the personnel department. The second incident involved the foreman threatening to give Mr Conn "a good hiding", shaking with rage, saying to Mr Conn that he knew where he lived and swearing aggressively at him.
Their Lordships were unanimous that the first incident (threatening to punch out the windows of the cabin) fell far short of the threshold for conduct that amounts to harassment. Lord Justice Gage stated, "this is the sort of bad-tempered conduct which, although unpleasant, comes well below the line of that which justifies a criminal sanction" (at paragraph 15) and Lord Justice Ward in more vigorous terms, "what on earth is the world coming to if conduct of the kind that occurred in the [first incident] can be thought to be an act of harassment, potentially liable to giving rise to criminal proceedings punishable with imprisonment" (paragraph 19). As the first incident could not be described as harassment no course of conduct could be made out. Only Lord Justice Gage referred to the second incident which had involved direct threats of violence. He found that this did amount to oppressive and unacceptable conduct, although even then he was of the opinion that the matter was not free from doubt.
If there is judicial doubt about whether a threat by a manger to give a fellow employee a jolly good hiding constitutes oppressive and unreasonable conduct, then it is clear that the 1997 Act offers only very limited protection to the those who are subjected bullying and harassment in the course of their employment. Certainly the kind of conduct of which Mr Majrowski complained falls far short of the test laid down in Conn.
That is not to say, however, that a claimant, in an appropriate case has no remedy in the civil courts. As the case of Helen Green v DB Group Services (UK) Limited [2006] demonstrates, employers may be both directly and vicariously liable for psychiatric harm caused by bullying and harassment (as more broadly defined) provided the claimant can establish that psychiatric injury, as distinct from anxiety and distress, were the reasonably foreseeable consequence of the conduct complained of.
In Green the claimant was an assistant company secretary in an investment bank. She was subjected to individually minor but prolonged and relentless instances of spiteful and undermining behaviour from four close female colleagues and separate bullying and undermining conduct from one senior male colleague. The claimant was excluded from conversations, isolated from social events and other staff conducted loud conversations over her desk. Highly relevant to the final decision were two additional factors, firstly, that this type of conduct was a long-standing problem known to management, as a number of others had been bullied. Furthermore, the claimant was a person who, to her employer’s knowledge, had been more vulnerable than the population at large, as she had disclosed to her employer on starting employment that she had suffered from depression in the past.
It was held that the bullying had given rise to a foreseeable risk of psychiatric injury. Such behaviour when pursued relentlessly on a daily basis had a cumulative effect and was designed to make the working environment intolerable for the victim, and the stress that it created went far beyond that normally to be expected in the workplace. The defendant was found to be in breach of its duty of care to the claimant in failing to take any or any adequate steps to protect her from such behaviour, and further, in any event vicariously liable in negligence for the acts of bullying which resulted in psychiatric injury.
Thus, although Conn has effectively shut the door on claims under the 1997 Act, a claimant who is known by her employers to be vulnerable and who is subjected to a prolonged campaign of workplace bullying would still have a valid personal injury claim.
HELEN HOBHOUSE
TOROPDAR V EIDHA – DECLARATIONS OF NON-LIABILITY – ALAN JEFFREYS QC
What can an insurer do in the following circumstances? The potential claimant is a child or a person lacking capacity. The potential defendant believes he has a good case on liability. The claimant’s advisors indicate that they also believe that the claimant has a good case, and say that they are intending to issue proceedings. They do not do so, despite the defendant’s encouragement and nomination of solicitors to accept service. Time drags on. The limitation period is either years away or limitless. The insurer must keep his books open, and keep contact with witnesses.
This is not an uncommon scenario, and one which has caused concern to many insurers. A solution may be provided by the decision of McCombe J in Toropdar v Eidha (Lawtel 6th June 2008). In that case I was instructed by the ‘defendant’ to take declaration proceedings seeking a declaration that the defendant was not liable.
In order to obtain such a declaration, the court would have to make a determination on the merits of the case.
Before Master Foster, the ‘claimant’ contended (inter alia) that there was doubt as to whether negative declaratory relief was available in the context of a personal injuries action in principle, and that the court should therefore order the point to be tried as a preliminary issue. The Master refused, and ordered the issue to be tried together with the merits of the claim. An appeal to the judge met with the same result.
The advantage from an insurer’s viewpoint is that the ‘claimant’ will consider that he has no option but to counterclaim for damages, so that action will be determined far earlier than might have been the case.
It should be noted that the use of declaratory relief is discretionary, and that its use in the context of personal injury actions has not been authoritatively determined. As yet, I am not aware of any appeal of McCombe J’s decision.
I do not suggest that Toropdar is an authority for a general circumvention of the Limitation Acts. It will need clear facts for a Court to consider exercising its discretion in the ‘defendant’s favour. Those who read the report will observe that the following factors were present in Toropdar, and may be the kind of features which a court would look for in any future case:
- The ‘claimant’ was represented by solicitors at an early stage following the accident.
- The claimant had the benefit of a CFA to bring an action.
- The claimant had access to all the police evidence and had commissioned his own reconstruction report
- The claimant repeated his intention to issue proceedings after a consultation with leading counsel
- Some six years had elapsed since the accident.
ALAN JEFFREYS QC
CASE LAW UPDATE – Quintin Fraser
Melanie Jane Arnup v M W White Ltd
[2008] EWCA Civ 447 (Ward LJ, Dyson LJ, Smith LJ) 07/05/08
The appellant (J) had received a payment from the respondent (M) under a death-in-service benefit scheme, after her husband had died in the course of his employment with M. J also received a payment from an employee benefit trust which had covered her husband. At first instance the judge held that both payments had not been made as a result of the husband’s death, but had been made as a result of independent decisions by M and the trustees, and thus it followed that s.4 of the FAA 1976 did not require them to be disregarded. The judge then endeavoured to apply the common law exceptions to deductibility in personal injury cases, and held that whilst the trust payment did fall within the "benevolence exception" the "death-in-service" payment did not and had to be deducted from J’s loss of dependency.
The Court of Appeal found that the judge had erred, in that if he found that neither payment resulted from J’s husband’s death, he should still have then disregarded any benefits when assessing J’s loss of dependency because of the very lack of the relationship between the benefits and the death. The court also held (obiter) that given the wide scope of the statutory provisions for disregarding benefits accruing on account of death, causation of the accrual of those benefits was no longer an issue, as the benefits shouldn’t be included in the assessment of damages either way.
Samuel David Harris (by his litigation friend Janet Harris) v Timothy Perry (1), Catherine Perry (2) and David Harris (3)
[2008] EWHC 990 (Steel J) 8/5/2008
The claimant (H) had been seriously injured whilst playing on a bouncy castle at a party. This party had been organised by Timothy Perry and Catherine Perry (P). H and a friend had seen the bouncy castle having played football nearby and H asked his father, the third defendant, (F) whether they go join in. They approached P and asked for her permission to use the bouncy castle, and it was found on the evidence that it was likely that P had given her permission. On the bouncy castle H was struck on the forehead by the heel of another older and taller boy (S) who was performing a somersault, and H suffered serious head injuries.
It was held that P’s supervision of the bouncy castle had been inadequate, and that this inadequate supervision had been causative of H’s injuries, as was the failure by P to stop S using the bouncy castle amongst younger and smaller children. The claim against F failed, as his perception had been that the bouncy castle was being properly monitored and it was held that such a perception was reasonable.
OCS Group Ltd v Davinia Wells
[2008] EWHC 919 (Nelson J) 29/04/08
The respondent (W) had injured her back at work, and the appellant employer admitted primary liability (O). A year after the accident W had still not had any medical examination by an orthopaedic surgeon, despite such an examination having been agreed to by O. O applied for pre-action disclosure of W’s medical records under CPR r.31.6 and r31.16. The judge at first instance dismissed the application on the grounds that it was too early to say whether the documents were relevant, and that the medical records should not be disclosed because they were private records covered by article 8 of the European Convention of Human Rights 1950, and thus he did not have jurisdiction to order disclosure.
The appellate court upheld the dismissal of O’s application, on the basis that although the judge did in fact have jurisdiction to order disclosure and the medical records were relevant to O and W’s cases, nevertheless disclosure was not desirable as W would not yet know of the contents of her records which might embarrass her and cause her to wish to limit or even withdraw her claim. Furthermore, it might transpire that the medical records were of no significant value in the proceedings and the private records would have been disclosed at an early stage unnecessarily.
[1] [1979] AC 556
[2] A stark demonstration of this occurred in Corbett v Barking Havering and Brentwood Health Authority [1991]2QB where trial occurred just 6 months short of the 12 year multiplier awarded to a child in respect of a lost 18 year dependency on his mother. The Court of Appeal adhered to Cookson and assessed the multiplier at date of the mother’s death but increased the multiplier to 15 because by the time of trial it was said there was less uncertainty to consider.
[3] Not entirely unfair, perhaps, given the recent adjustments we are now encouraged to make for region, nature of employment, etc. and the fact that it is now considered that estimates of female life expectancy may prove excessive for the present generation due to lifestyle.
[4] [1999] 1AC 345