Personal Injury Update - January 2010
11 Jan 2010Contents
- FARRAR’S BUILDING NEWS AND QUESTIONNAIRE Nigel Spencer Ley
- THE COMPENSATION ACT 2006 IN PRACTICE Tom Vonberg
- CASE LAW UPDATE Sharan Sanghera
FARRAR’S BUILDING NEWS AND QUESTIONNAIRE
Happy New Year to you all!
The format of our PI Newsletter has remained unchanged for some years now. We are looking for ways to improve it and would be grateful for your help. If you have a few moments please could respond to the following questionnaire. Please send your replies to me at: nsley@farrarsbuilding.co.uk. Thanks
(1) Do you normally read the Newsletter on screen or do you print it?
(2) Are there any particular aspects of PI Law or Civil Procedure that that we do not currently cover and that you would like us to cover?
(3) We aim to include all relevant recent PI and Civil Procedure decisions in the Case Law Update. In your experience do we achieve this, or do you find that we often miss important decisions?
(4) Have you any other suggestions regarding the Newsletter (in particular its content and format)?
This month’s Newsletter contains an article by Tom Vonberg on how the courts have interpreted Section 1 of the Compensation Act – i.e. when will a finding of liability lead to discourage the pursuit of desirable activities?
The Case Law Update was prepared by Sharan Sanghera.
topTHE COMPENSATION ACT 2006 IN PRACTICE
The common law concerning breach of duty in negligence claims recognises that there is a balance to be struck as between the mitigation of foreseeable risk and the desire to promote some activities which give rise to a risk.
In this sense, section 1 of the Compensation Act 2006 side-noted "Deterrent effect of potential liability" seemed designed to appeal to a populist dislike of a compensation culture without doing much more than restate the balancing exercise which was already being performed by the judiciary.
However, in the recent case of Graham Hopps v (1) Mott Macdonald Ltd (2) Ministry of Defence [2009] All ER (D) 259, Clarke J gave the first decision in which the applicability of section 1 was tested. Does the decision when read with the act do anything to inform us of the way in which the Courts are likely to approach arguments as to the appropriate standard of care?
It is worth setting section 1 of the Act out in full:
A court considering a claim in negligence or breach of statutory duty may, in determining whether the defendant should have taken particular steps to meet a standard of care (whether by taking precautions against a risk or otherwise), have regard to whether a requirement to take those steps might-
(a) prevent a desirable activity from being undertaken at all, to a particular extent or in a particular way, or
(b) discourage persons from undertaking functions in connection with a desirable activity.
The explanatory notes to the Act perhaps reinforce the view that the motivation behind it was to assuage public concern at increasing litigation referring as they do to a wish to provide "reassurance to the people and organizations who are concerned about litigation", and to "ensuring that normal activities are not prevented because of the fear of litigation". Certainly, the notes stress that the statute was not intended to alter the standard of care but rather to focus the "the court’s assessment of what constitutes reasonable care in the case before it" [notes 10 and 11].
In an occupiers’ liability case predating the Act, Lord Hoffman in John Peter Tomlinson v (1) Congleton Borough Council (2) Cheshire County Council [2003] UKHL 47 had already engaged with the notion of permitting "desirable activity", as it is termed in the act, when he held that "the question of what amounts to "such care as in all the circumstances of the case is reasonable" depends upon assessing, as in the case of common law negligence, not only the likelihood that someone may be injured and the seriousness of the injury which may occur, but also the social value of the activity which gives rise to the risk and the costs of preventative measures. These factors have to be balanced against each other" [34].
Yet, just as Lord Hoffman referred to the "degree of risk in swimming and diving, as there is in climbing, cycling, fell walking and many other such activities" [39] so the case examples invariably reflect claims arising from "activity" construed narrowly in, for example, the context of sports or in visiting sites of historical interest or in the provision of public amenities. These are claims framed in simple negligence or in Occupiers’ Liability.
This is why the decision in Hopps is of interest to the development of the principle rehearsed in Tomlinson. Not just because it was a direct application of section 1 but because it was a claim arising out of an accident sustained in the theatre of war between employee and employer as opposed to visitor or trespasser and occupier. It is relevant to state that in Hopps i) the Claimant was a civilian electrical engineer employed by the 1st Defendant to work on the reconstruction of Iraq ii) the safety for his transport to various sites of work was the responsibility of the 2nd Defendant iii) He was injured in 2003 by a roadside bombing in Basrah whilst travelling in an unarmoured landrover and iv) one of the allegations was that the 1st Defendant failed to carry out a risk assessment which would have revealed that only armoured vehicles should have been used to transport the Claimant. An armoured landrover was not available at the material time and so it was alleged that the claimant should have been confined to base.
In considering the relevance of section 1 Clarke J immediately dismissed a Claimant argument that it was applicable to the typical kind of pursuits discussed above but not to an injury suffered in theatre and held that "It seems to me that in determining whether particular steps (e.g. confinement to the airport until armoured vehicles were available for transport) should have been taken I am entitled to have regard to whether such steps would prevent the desirable activity of reconstruction of a shattered infrastructure after a war in a territory occupied by HM forces, particularly when failure to expedite that work would carry with it risks to the safety of coalition forces and civilian contractors in Iraq as a whole" [93].
It followed that there was a finding that the claimant should not have been confined to base even if there had been a risk of injury [at 131]. This aspect of the decision, it being remembered that the issues of foreseeability of risk and causation are outside the purpose of this note, highlights the potential for a broad definition of what is to be considered a "desirable activity" and beyond that which has been considered in cases such as Tomlinson. Equally, it demonstrated that despite the proximate relationship between the parties in an employers’ liability claim (to be contrasted with situations in which a claimant has willingly undertaken risk) such cases remain susceptible to section 1 arguments by defendants.
Hopps is not an example of the standard of care being eroded – after all Clarke J was performing the same balancing exercise in the context of what he referred to as the "highly unusual" [87] circumstances of the case. However, it does hopefully serve as a reminder of the application of section 1 to employers’ liability claims and the novel way in which an activity giving rise to risk may be advanced as "desirable".
topCASE LAW UPDATE
Robert Eric Spencer V Wincanton Holdings Ltd (Wincanton Logistics Ltd) (2009)
[2009] EWCA Civ 1404 CA (Civ Div) 21/12/2009 (Sedley LJ, Longmore LJ, Aikens LJ)
Significance: the standard of unreasonableness required to break the chain of causation.
Facts: While employed by W, S had damaged his knee in an accident at work which required his leg to be amputated above the knee three years after the accident. W did not dispute liability for the consequences of the accident including the amputation. Eight months after the amputation, S tripped and fell while filling his car at a petrol station, doing further damage which confined him to a wheelchair permanently. S had earlier issued a claim against W in respect of the first accident, and damages in that claim were assessed after S had the second accident. W resisted the increase in the size of the claim attributable to the second accident.
Held at first instance: W was liable for the second accident, and so for the increase in the size of the claim subject to a one-third reduction to reflect S’s contributory negligence.
W appealed arguing that the second accident had been caused by S's unreasonable conduct, meaning that, following McKew v Holland & Hannen & Cubitts (Scotland) Ltd [1969] 3 All ER 1621 HL, it should not be held liable for the injuries S had suffered in the second accident.
Held on appeal: The formulation in McKew was problematic in that "unreasonable" covered a wide range of meanings, McKew considered. The degree of unreasonable conduct required by the McKew test was very high, Emeh v Kensington and Chelsea and Westminster AHA [1985] QB 1012 CA applied. It was unhelpful to describe the later conduct required by the test as reckless or deliberate. The trial judge’s apportionment of blame spoke clearly against a finding either that S had acted recklessly or that it was unfair to treat the chain of causation as surviving the second accident. The second accident was a real consequence of the first accident, albeit one to which S's own misjudgment had contributed. Appeal dismissed.
Andrew Howe v Wayne Houlton (1) Marshall Barry Ltd (2) Norwich Union Insurance Ltd (3)
[2009] EWHC 3344 (QB) QBD 18/12/2009 (Swift J)
Significance: contributory negligence; car parked on zig-zag lines of a pelican crossing
Facts: The claimant (H) was in the vicinity of the open driver’s door of his Peugeot motor car which was parked by the side of the road facing in its direction of travel. H had parked within the controlled area of a pedestrian crossing, in breach of the Highway Code and of the Regulations governing pelican crossings. A Volvo articulated lorry being driven by the first defendant struck the driver’s door and the claimant. H became entangled in the rear axle wheels of the lorry before being thrown from under the lorry onto the road and suffered horrific injuries as a result.
Held: The experts agreed that the driver of the lorry would have had a clear view of the offside of the Peugeot on his approach and would have had sufficient time to have stopped or taken other avoiding action before reaching the Peugeot. On the issue of contributory negligence, it was held that the purpose of the zig-zag lines on each side of a pelican crossing is to ensure that pedestrians using the crossing can see and can be seen. The presence of a car parked within the controlled area of such a crossing is just as obvious to vehicles approaching from behind as if it were lawfully parked just outside that controlled area. On the facts, the accident in the present case could have happened in precisely the same way had the Peugeot been lawfully parked a few metres west of its actual position. Thus, the claimant’s action in parking on the zig-zag lines did not amount to a failure to take reasonable care for his own safety. Moreover, the fact that the Peugeot was illegally parked was not causative of the accident. The defendant was wholly liable for the accident and the resultant injuries, loss and damage suffered by the claimant.
Laura May (A child by her litigation friend Christine May) v Lancashire Teaching Hospitals NHS Trust
[2009] EWHC 3175 (QB) QBD 4/12/2009 (Slade J)
Significance: clinical negligence; failure to supply and use equipment during surgery
Facts: The claimant (M) suffered from scoliosis, and had undergone surgery at the trust's hospital to achieve some correction of the curvature of her spine and to prevent its progression and a significant deformity. The operation involved improving the angle of the spine by the use of pedicle screws, hooks and rods. The spine was also manipulated to achieve correction. Following the operation, M was paraplegic as a result of damage to her spine. The issues in the case were whether (i) M's paraplegia was a result of the misplaced insertion by the surgeon (S) of a pedicle screw at the sixth vertebra or above; (ii) S was negligent in any material respect; (iii) such negligence caused the paraplegia.
Held: on the balance of probabilities, a pedicle screw piercing the dura and compressing the spinal cord caused the damage to M’s spinal cord. Because S found the images difficult to read, he had failed to use bi-planar imaging, which would have shown the depth of the screw, and whether it was going too far sideways and thus impinging on the spinal canal. The actions of the reasonably careful surgeon would depend upon their skill and experience and whilst it could be safe for some surgeons not to use imaging during the placement of screws, as S only performed a few scoliosis operations a year, he was negligent in not using bi-planar imaging during the placement of the screw. In addition, the trust had failed to provide spinal cord monitoring equipment which was available at most if not all spinal operations centres, and so the trust fell below a reasonable standard of care in failing to provide it, Bolam v Friern Hospital Management Committee [1957] 1 WLR 582 QBD applied.
(1) James Rhodes Beresford (2) Douglas Harold Smith V (1) Solicitors Regulation Authority (2) Law Society (2009)
[2009] EWHC 3155 (Admin) DC 2/12/2009 (Sir Anthony May (President QB), Silber J, David Clarke J)
Significance: legitimacy of success and referral fees
Facts: The Department of Trade and Industry had been found liable in negligence for two serious industrial injuries suffered by miners and had entered into claims handling agreements (CHAs) with solicitors representing the miners and with the miners' union, in order to manage the significant number of claims. The CHAs provided that the solicitors' costs would be paid by the DTI in accordance with a pre-determined tariff. Two solicitors (B) had acted for a large number of miners in relation to their claims under the CHAs. B received instructions directly from miners, who were each required to enter into agreements that success fees would be deducted from their compensation. B also received referrals from the union via a claims management company (V), to whom B paid a fee for vetting, marketing and administration in each successful case. The union clients also signed an agreement with V that an administration fee, to cover the cost of pursuing the claim, would be deducted from their compensation. Complaints were made about the legitimacy of the success fees charged and the permissibility of the fees paid by B to V.
Held at tribunal: The solicitors disciplinary tribunal found B guilty of conduct unbefitting a solicitor on the grounds that (i) charging success fees had not been in the best interests of the clients and had been improper; (ii) B's agreement with V was in conflict with the interests of B's clients, and B had failed to advise clients about the propriety of the administration fee agreement with V; (iii) B had failed to give their clients adequate information about costs and the funding of the claims generally; (iv) the payments made by B to V were referral fees in breach of the Solicitors' Introduction and Referral Code 1990, and the agreement with V was a sham intended to disguise that fact; and (v) they had breached the Solicitors' Practice Rules 1990 r.9 by entering into an arrangement for the introduction of clients with personal injury claims with claims assessors who solicited or received contingency fees in respect of such claims. The tribunal made a full costs order against B, even though they had successfully defended three allegations against them.
B appealed the decision. On appeal B accepted that they had failed to give their non-union referred clients sufficient information about costs or the funding of the claims in general, but appealed on the basis that the tribunal's findings were wrong in fact and law, and the reasoning was inadequate.
Held on appeal: (1) As B had accepted referrals from the union with no success fee and an obligation to make payment to V, it was clear that their own general assessment of the commercial risk of such cases did not deter them from taking cases with no success fee at all. It was therefore unconscionable to require non-union referred miners to enter into agreements for success fees to be paid from their compensation. (2) The payments that the clients had agreed to make to V were an obligation that arguably they should not have been induced to undertake as V did not conduct the claim for the client, it merely referred the client to B. (3) B had failed to give its union-referred clients sufficient information about costs, as it had with its non-union referred clients. (4) The payments made by B to V were not genuine payments for services. (5) The union and V were not themselves solicitors or advocates and their fees were payable only in the event of success. The clients had been formally joined as plaintiffs to existing proceedings begun before a court and therefore the claims were contentious business within r.8. Accordingly, B were in breach of r.9 by paying contingency fees to V. (6) The tribunal had been justified in ordering B to pay the whole of the authority's costs, even though three allegations had not been proved against them. The tribunal had made a cumulative series of findings of very serious misconduct on a huge scale and in relation to thousands of vulnerable clients. The allegations that were successfully defended were a small fraction of a very serious whole. Appeal dismissed.
Thomas Henry Jose (Claimant) v (1) Macsalvors Plant Hire Ltd (Appellant) (2) Brush Transformers Ltd (Respondent) (2009)
[2009] EWCA Civ 1329 CA (Civ Div) 15/12/2009 (Ward LJ, Smith LJ, Rimer LJ)
Significance: obligation on hirer of a crane to indemnify the crane’s owner
Facts: The respondent (B) had hired a large mobile crane from the appellant (M) to carry our work at an electricity sub-station. The crane was supplied with an experienced operator (J) who fell off the crane and sustained serious injuries. J brought a claim against M for negligence and breach of statutory duty. M brought third party proceedings against B to be indemnified under the terms of Construction Plant-Hire Association’s contract for hire, which both parties had signed. Clause 8 of the contract provided that where operators were supplied with the plant, such operators were to be regarded for all purposes as the servants or agents of the hirer, who was also to be responsible for all claims arising in connection with the operation of the plant by the operator. Clause 13 provided that the hirer had to fully and completely indemnify the owner in respect of all claims by any person whatsoever for injury to person or property caused by, or in connection with, the use of the plant during the hire period.
Held at First Instance: Clause 8 was intended to cover those situations where the actions of the operator caused an accident resulting in loss and damage. M had no valid claim under clause 13 because it had not expressly exempted itself from its own acts of negligence.
M appealed submitting that (1) the wording of clause 8 was wide and the term "all claims" included a claim by the operator; (2) the principle in Alderslade v Hendon Laundry Ltd [1945] KB 189 CA and the corresponding rules in Canada Steamship Lines Ltd v King, The [1952] AC 192 PC (Can) did not apply to clause 13 because it was an allocation of risk clause transferring risk, not an indemnity clause.
Held on Appeal: J was beyond M's actual control when carrying out B's business and clause 8 effectively passed responsibility for his negligence to B. It was clear that the meaning and purpose of clause 8 was to regulate the liability as between M and B in respect of claims brought by third parties arising out of J's negligence; making B liable for a claim arising out of M's own negligence had not been contemplated, Arthur White (Contractors) Ltd v Tarmac Civil Engineering Ltd [1967] 1 WLR 1508 HL and Thompson v T Lohan (Plant Hire) and Hurdiss (JW) [1987] 1 WLR 649 CA (Civ Div) applied. Accordingly, properly construed, clause 8 did not make B responsible for J's claim against M in respect of M's own breach of duty. E Scott (Plant Hire) Ltd v British Waterways Board Unreported December 20, 1982 CA (Civ Div), was direct authority on the issue of whether clause 13 obliged the hirer to indemnify the owner in respect of damage caused by the owner's own negligence and was binding on the court. If M had wished to limit its liability in respect of negligence, it should have done so in clear terms. Accordingly, M could not claim to be indemnified under clause 13 for the injuries to J arising out of the use of the plant during the hire period when that damage arose due to its own negligence. Appeal dismissed.