Personal Injury Update - December 2009
4 Dec 2009Contents
- FARRAR’S BUILDING NEWS Huw P. Davies
- CHRISTMAS PARTIES AND VICARIOUS LIABILITY Sarah Tozzi
- PARTIAL LOSS OF FUTURE EARNINGS AND OGDEN 6 Richard Nussey
- CASE LAW UPDATE Bonike Erinle
FARRAR’S BUILDING NEWS
In this month’s newsletter Sarah Tozzi provides a festive review of the important topic of vicarious liability for accidents that occur during the office Christmas party whilst Richard Nussey provides a brief analysis of the proper method to claim future earnings utilising Ogden 6.
The Case Law Update was prepared by one of our new pupils Bonike Erinle.
topCHRISTMAS PARTIES AND VICARIOUS LIABILITY
The festive season is fast upon us and the obligatory office party will soon be under way. Whilst they undoubtedly present a good opportunity for employees to let their hair down, employers should be advised to take proper care to protect themselves against claims for any accidents that occur during the party season. This paper gives an overview of areas in which liability might attract and focuses on vicarious liability.
Whether employers are retaining their staff on site for a party or entertaining at an external venue, they are advised to undertake a risk assessment to identify any potential hazards likely to cause personal injury. One of the key problems is "over indulgence" of alcohol. Employers need to ensure that they encourage sensible consumption. Provision of free alcohol or encouragement of drinking games/excessive consumption by senior staff could attract liability if an employee becomes sick through excessive consumption and is left unsupervised or if that employee damages third party property, for example setting off a fire extinguisher.
In Barrett v Ministry of Defence [1995] 1 W.L.R. 1217, the Court of Appeal considered liability of the Ministry of Defence where a naval airman died after becoming so drunk at a naval base that he passed into a coma and asphyxiated on his own vomit. The widow and executrix of the deceased relied upon the laxity of enforcement of regulations requiring control of heavy drinking and argued lack of discipline and lack of adequate medical care for the deceased. The appeal succeeded in part. The Court of Appeal found that a breach of the Queen’s Regulations could not be established, neither was it justified nor reasonable to blame one adult for another’s lack of self-control. No one was better placed to judge the amount which he could safely consume than the individual himself. Therefore the deceased was responsible for his own collapse, however once he had collapsed and was no longer capable of looking after himself, it was accepted that the defendant’s care was then inadequate. The defendant was liable to the extent that it failed to take proper care of the deceased once he had collapsed. Contributory negligence was assessed at two-thirds.
It is trite law that an employer is vicariously liable for negligent acts or omissions by his employee in the course of employment whether or not such act or omission was specifically authorised by the employer. To avoid vicarious liability, an employer must demonstrate either that the employee was not negligent in that the employee was reasonably careful or that the employee was acting in his own right rather than on the employer's business.
The leading case on vicarious liability is Lister v Helsey Hall Limited [2001], in which the House of Lords held that the employers of the warden of a school boarding house who sexually abused boys in his care could be vicariously liable for the torts of their employee if there was a sufficiently close connection between the torts and the employment. The determining factor was whether the torts were so closely connected with the employment that it would be fair and just to hold the Defendant vicariously liable.
On the facts of Lister Lord Clyde suggested that the imposition of liability was justified because the employer had been entrusted with the safekeeping of the children and had delegated the performance of that duty to an employee. Lord Millet argued that vicarious liability is best viewed as a loss distribution device which imposes liability on an employer to protect an innocent party where the employer’s business enterprise created the risk of injury. His Lordship accepted that no liability should arise where employment merely created the opportunity for wrongdoing. However, he went further that an employer ought to be liable for those risks which experience shows are inherent in the nature of the business. The fact that events occur off work premises and outside working hours will not be determinative.
So what are the potential risks against which the employer should guard at a festive bash? Aside from excessive alcohol consumption I have identified 3 others, which could arise.
First, there is a risk that the employer is found liable for dares, where a connection can be established between the activity dared and the nature of the employment. In Ministry of Defence v Radclyffe [2009] EWCA Civ 635 (CA), the Ministry of Defence was found vicariously liable for the actions of an army captain who permitted/encouraged a second lieutenant to jump from a bridge into a lake, whilst they were off duty. Although the officers and men were off duty at the lake, rank and military discipline remained relevant. The Court of Appeal found that the captain had assumed responsibility to prevent the soldiers from taking undue risks of which he was or ought to have been aware, by his very presence. He was acting in the course of his employment and that the MOD was vicariously liable for his breach of duty. He should not have encouraged R to jump but should have ordered him and his men not to do so. The claimant’s contributory negligence was assessed at 40%.
Second, albeit unlikely, there is a risk that the employer is found liable for theft by employees. A risk worth noting if employees are taken to a party off-site and decide to take home a "souvenir" from the experience. Again the test is very much based on Lister. In Brink’s Global Services Inc v Igrox Ltd and Hyundai Merchant Marine (Europe) Ltd [2009] EWHC 1817 (Comm) the claimants (B) claimed that the first defendant (D) was liable in contract and in tort for a loss caused by the theft of silver bars from a container awaiting pre-shipment fumigation at Tilbury. B had been instructed to ship the silver bars to India. The bars had been collected from a London bank and placed in a container supplied by the second defendant (H). B had instructed H to arrange for the container to be fumigated at the container terminal. D provided fumigation services and had an agreed fumigation procedure with the container terminal but failed to do it, and instead its employee (R) stole some of the bars. D owed a duty of care to B but it was not breached, it could not accompany R at all times. R’s improper performance of his duty as an employee as part of his dishonest design made the theft possible. The tort was inextricably bound up with what was authorised and expected of R in the performance of his duties and was so closely connected with the employment that it was fair and just to hold D liable for R's tort.
Third, a risk can still arise once the party is over as the employer’s duty arguably extends beyond the party itself to ensuring that staff can get home safely. A general warning should be given to employees against drink-driving and the risk of accepting lifts from drunk drivers. In Booth v White [2003] EWCA Civ 1708
and Gleeson v Court (2008) RTR 10 it was held that passengers can be contributorily negligent if they accept lifts knowing the driver is drunk. In Gleeson the claimant had chosen to travel in a car knowing the driver was drunk and elected to travel in the boot as there were too many passengers for the number of seats. Damages were reduced by 30 per cent to reflect the contributory negligence.
Envisage a scenario where an employer permits its professional driver to attend a drinks party (for example an employee of a hotel) and then take staff home whilst drunk or where an employer has encouraged employees to get drunk knowing that the majority have driven to an event but has given no guidance or assistance in providing a safe means of transport home.
The only defence to claims of this sort would be to demonstrate that the employer did everything it reasonably could to prevent the employee's misdemeanour. It is unlikely to be enough simply to have issued a rule against drink-driving. This must be communicated to all staff regularly and rigidly, and consistently enforced.
Finally for those employees who decide to hit the clubs after the party, nightclub owners need to beware of liability for their bouncers in any brawls. In Hawley v (1) Luminar Leisure Ltd (2) ASE Security Services Ltd (3) Mann [2006] EWCA Civ 18, a nightclub was found vicariously liable for the acts of a doorman supplied to it under an agreement for the provision of security services since the club had control not only over what the doorman did but how he was to do it. The doorman purposely hit the claimant with the intention of hurting him and was charged with grievous bodily harm. The nightclub was found vicariously liable for his actions.
There is, of course, no need for employers to be "killjoys", the Christmas party can go on! The best guidance is for employers to be sensible and to follow these rules:
- risk assess the venue at which the party will be held;
- devise a simple party policy to be given out before the event takes place, addressing sensible alcohol consumption and reasonable behaviour/conduct,;
- ensure that it is understood that drink driving will not be tolerated;
- encourage employees to take a safe means of transport home, whether by lifts from non-drinkers, taxis or staying near the venue and traveling home the next day;
- deal promptly with any grievances raised as a result of the party.
PARTIAL LOSS OF FUTURE EARNINGS AND OGDEN 6
Many Judges and some Claimant solicitors still calculate a partial loss of future earnings by taking pre-accident earnings less post-accident earnings x the appropriate multiplier ("the old method"). This is logical but in almost all cases will not be the method set out in the Notes to Ogden 6. This Note is intended to give a short résumé of that thinking. More (and essential) detail may be found in the Notes themselves and in Guy Watkins’ excellent article in the November 2008 newsletter.
The research upon which Ogden 6 was based showed that previous editions significantly understated the impact of contingencies other than mortality (another accident; the effect of moving job; redundancy; etc). So Tables are provided to give percentages to discount the relevant multipliers. They are divided into male and female; into age groups; by whether the Claimant was employed or not before the accident; and by his academic standard.
There is another central division. That is into those who are "disabled" and those who are not. The same research showed those who were disabled or who became so as a result of an accident are significantly less likely to obtain and keep a job than those who are not. For the disabled, the discounts are much greater. As the Notes suggest using the definition of "disability" in the Disability Discrimination Act 1995, which is very wide in its terms, it is arguable that anyone with a significant future loss will be disabled.
The result is that someone who has become disabled as a result of an accident has a claim which should be calculated as pre-accident earnings x multiplier less appropriate discount less post-accident earnings x same multiplier less much greater discount. This formula will produce a much greater amount than the old method.
topCASE LAW UPDATE
Bonike Erinle
Martine Widlake v BAA Ltd (2009)
CA (Civ Div), 23/11/2009 (Ward LJ, Smith LJ, Wilson LJ)
[2009] EWCA Civ 1256
Significance: costs penalties for successful claimants who exaggerate their claims.
Facts: W was employed by B as a security guard. W lost her footing, fell down a staircase and suffered personal injury as a result. She claimed that the fall was the sole cause of her lower back pain and sought £11,000 for PSLA. W’s third schedule reduced her initial claim of £148,878 for special damages to £23,906. B paid £4,500 into court pursuant to CPR Part 36. During the proceedings, it transpired that W had had a pre-accident back condition and that she had simply forgotten to tell this to the three medical experts instructed in the case.
Held at first instance (Seymour J): judgment for W (£3,500 for PSLA and £2,022 for special damages) but with an order that W should pay B’s costs. Relying on Molloy v Shell UK Ltd [2001] EWCA Civ 1272, Seymour J found that W had sought to enhance her compensation by deliberately concealing the previous history of her back in a cynical and dishonest fashion.
W appealed on the costs issue.
Held by the Court of Appeal: appeal allowed. (i) Seymour J misdirected himself in considering the case to be more serious than Molloy. (iii) W exaggerated her case such that it made it difficult to settle but W had still beaten B’s Part 36 offer. B had failed to make a proper offer but W’s dishonesty could not go without penalty. The right order, therefore, was to make no order as to costs.
Dianne Willmore v Knowsley Metropolitan Borough Council (2009)
CA (Civ Div), 19/11/2009 (Ward LJ , Sedley LJ, Smith LJ)
[2009] EWCA Civ 1211
Significance: causation in asbestos cases; a risk of exposure is a risk of harm.
Facts: W contracted mesothelioma following her exposure to asbestos. For approximately seven years, she had been a pupil at K’s school in a building that was known to contain asbestos.
Held at first instance (Nicol J): judgment for W. W had been exposed to a risk from asbestos fibre in three particular circumstances, which materially contributed to her risk of contracting mesothelioma.
K appealed on the basis that: (i) the judge had mistakenly considered that he was determining whether there had been exposure to fibre rather than exposure to risk; (ii) even if it was correct to address the former, there had been a failure to establish more than minimal exposure, and; (iii) the judge’s findings of fact were, in enough respects to undermine his conclusion, not supported by the evidence (i.e. W could not have been exposed to asbestos in one of the three circumstances on which Nicol J had found K liable).
Held by the Court of Appeal: appeal dismissed. (i) Where asbestos is involved, a risk of exposure is a risk of harm. (ii) It is not enough to eliminate one source of exposure if another or others remain in place, "because there is no safe dose of asbestos". (iii) There was insufficient evidence to support that one of the three sources of exposure existed, but there was still a likelihood of significant exposure from the other two sources identified.
Jonathan Harvey v Plymouth City Council (2009)
QBD, 13/11/2009 (Leighton Williams QC)
Unreported. Available on Lawtel (LTL 18/11/2009)
Significance: whether actual knowledge of ownership/occupation is necessary to impose liability under the Occupiers’ Liability Act 1957.
Facts: H had drunk several pints of lager whilst watching a rugby match. After fleeing from a taxi, H ran onto grassland, tripped or fell over a broken fence and fell some metres to a car park below. The land was owned by P but in 1985, P had licensed the land to Tesco for a fixed period of time. The license came to an end but no one was clear as to when. P had not realised that the land belonged to it at the relevant time but admitted that it was occupier nonetheless. H claimed P had breached a duty it owed him as an implied licensee under the 1957 Act. P denied firstly that H was an implied licensee and secondly that it had the relevant knowledge to make it liable under the Occupiers’ Liability Act 1984.
Held: judgment for H. (i) Ordinarily, an owner of land cannot acquiesce in the use of land without knowledge of that use and that he has the right to prevent such use. (ii) In this case, P knew that it owned the land before licensing it to Tesco. It should have known when the license determined and should therefore have considered the use to which the land was being put and whether there was anything it needed to do to ensure it was safe for use. (iii) H was not a trespasser because it was reasonably foreseeable that many other youths would have gone onto the land, as did H, out of high spirits; further H could not have believed he was a trespasser at the time. (iv) H’s drunkenness did not mean that he willingly accepted the risk of falling onto the car park, but rather meant that he was 75% contributorily negligent in causing his accident.
Marc Preston v (1) City Electrical Factors Ltd (2) Thomas Adam Stockham (2009)
QBD, 13/11/2009 (Walker J)
[2009] EWHC 2907 (QB)
Significance: inter-relationship between interim payments and periodical payment orders (‘PPOs’).
Facts: P was knocked down by a van driven by S (an employee of C) but P had been drunk at the time. Liability was agreed on a 50/50 basis, leaving causation and quantum for determination at trial. P applied for an interim payment of £100,000 in respect of damages for personal injury. Although it was agreed that the accident caused a brain injury, there were issues as to whether the accident had caused P’s alcohol dependent syndrome (‘ADS’), and whether it was the accident or the ADS that had created his need for case management and support. P required an intensive care package, for which he had had to take out a substantial overdraft to fund. The Respondents (‘R’) had already made interim payments of more than £100,000 and argued that a further interim payment of £100,000, where overall damages were likely to be in the region of £260,000, would prejudice the trial judge’s ability to order a PPO, which R submitted would be most appropriate in the circumstances. P valued his claim in excess of £1 million (even on a 50/50 basis) and contended that (i) £100,000 was not a disproportionate amount, (ii) the interim payment was necessary to pay for the immediate care required, and (iii) this was not a case in which a PPO would likely be made.
Held: application granted. (i) A split of liability is not an absolute bar to a PPO but it does pose potential problems for a PPO. (ii) Uncertainties about life expectancy are not necessarily determinative in favour of a PPO. (iii) On R’s low valuation of the claim, the correspondingly low annual income a PPO would arrive at (combined with other considerations, including P’s own preference for a lump sum) meant that a PPO would not be a realistic possibility. (iv) The unpredictability of P’s care needs (ADS-related or not) and P’s desire to guard against them now (even if R was not responsible for the ADS disorder), meant a PPO would be too rigid and thus inappropriate. (v) Even if a PPO would not be made at trial, Walker J was satisfied to a "high degree of confidence" that there was a real need for the interim payment being requested at that time.
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