Cameron v Hussain25 May 2017
Bianca Cameron (Claimant/Appellant) v Naveed Hussain (First Defendant) and Liverpool Victoria Insurance Co Ltd (Second Defendant/Respondent)
The claim arises from a road traffic accident on 26 May 2013. There was a collision between the claimant, Miss Bianca Cameron and another motorist, driving a Nissan Micra. The driver of the Nissan failed to stop but the registration number was noted by a witness. The Claimant suffered personal injuries and vehicle related losses including credit hire estimated at between £10,000 to £15,000.
The First Defendant was identified as the owner of the vehicle but failed to cooperate with the police to identify the driver. The Second Defendants were the motor insurers for the vehicle but it transpired the policy had been obtained fraudulently in a different name to the First Defendant.
It became clear the First Defendant was not the driver of the vehicle so the Claimant applied to substitute the First Defendant to an unknown person identified as:
‘The person unknown driving vehicle registration number Y598 SPS who collided with vehicle registration number KG03 ZIZ on 26 May 2013’.
The lower courts dismissed the application and the first appeal and the matter progressed to the Court of Appeal.
The Issues The main issues were whether the Claimant could sue and obtain judgment against an unknown person and whether an insurer would be liable under s151 RTA 1988 to satisfy any such judgment.
The Court of Appeal after consideration of the previous case law and CPR granted the Claimant’s appeal and permission to substitute the First Defendant to an unknown person.
- Claimants involved in accidents with unknown drivers, where the insurers are identified, are unlikely to pursue a claim under the MIB Untraced Driver’s Agreement and instead pursue court proceedings. Claims under the Untraced Driver’s Agreement have limited recoverability for damages and costs
- Insurers in such circumstances will have limited recourse to recover any monies paid out unless they are to pursue their own policyholder for breach of policy conditions
- Insurers will need to consider more carefully the need to obtain s152 declaration proceedings thus avoiding their s151 liability
- Where s152 declaration is not an option insurers will need to ensure they are added as party to any proceedings at the outset to enable submissions to be made
- Insurers will need to consider whether more detailed investigations/questions are required before putting policies in place
It remains to be seen whether LV will appeal to the Supreme Court.
For further information on this case please contact: Anthony Baker, Partner on T: 0344 245 4202 or E: firstname.lastname@example.org
High Court refuses to rule that Williams v University of Birmingham  decided Per Incuriam22 May 2017
Veronica Ann Bussey as Widow and Executrix of the estate of David Edwin Anthony Bussey (deceased) v 00654701 (formerly Anglia Heating Limited)(1) Pump Maintenance Limited (2)
The High Court has found in favour of the Defendant in this low level exposure mesothelioma case in a Judgment handed down on 12th May 2017.
In so doing the Court rejected arguments that the Court of Appeal decision in Williams v. University of Birmingham  was decided Per Incuriam and that it was a decision that related to ‘non-employee’ claims only.
Mr Bussey died of Mesothelioma in 2015. He had worked for the First Defendant, then known as Anglia Heating Ltd, from 1965 until 1968 and for the Second Defendant from about 1969/70 until about 1980.
The First Defendant was the largest firm of domestic plumbers in the Norwich area. Mr Bussey was employed to undertake domestic heating and plumbing work. His exposure with that company arose from cutting asbestos cement flue pipes with a hacksaw and from the handling and cutting of asbestos rope used for caulking joints. For the Second Defendant, Mr Bussey undertook petrol pump repairs. His exposure to asbestos dust with that company arose through the handling and manipulating of asbestos rope only.
Shortly before Trial the Second Defendant compromised the claim brought against it (for a sum below its full liability value) leaving the Claimant to pursue her action against the First Defendant at Trial for the remainder of her damages.
It was common ground between the Parties that for the claim to succeed the Claimant had to demonstrate that the First Defendant was negligent at common law.
It was accepted by the First Defendant that Mr Bussey would have suffered some exposure to asbestos dust but it was argued that such exposure was light and would not have been considered foreseeably hazardous having regard to the knowledge available and the standards applicable at the material time.
The First Defendant relied upon the Court of Appeal’s decision in Williams v. University of Birmingham  in which Aikens LJ held that the best guide as to what in 1974 was an acceptable or unacceptable level of exposure to asbestos generally is that set out in the Factory Inspectorate’s “Technical Data Note 13” (TDN13) of March 1970. This document set out levels of exposure to asbestos below which the Factory Inspectorate would not bring a Prosecution pursuant to the Asbestos Regulations 1969.
The First Defendant argued that the likely exposure to asbestos suffered by Mr Bussey was below those levels and although the guidance was not issued until after Mr Bussey’s employment had ended, it would be illogical to consider that any lower level of exposure would be deemed foreseeably hazardous in the period before 1970.
The Claimant argued that the decision in Williams was decided Per Incuriam on the basis that the Court of Appeal in that case had not considered Court of Appeal authorities that had preceded it, in particular the decisions in Jeromson v Shell Tankers  and Maguire v Harland and Wolff Plc . In the alternative, it was submitted that the Court of Appeal in Williams was restricted to non-employee cases only and hence was of no relevance to Mr Bussey’s claim.
In the case of Jeromson, Hale LJ held that the Defendants were in breach of the duty owed by them to their employee, the Claimant, in failing to provide a safe system of work. The Claimant in that litigation was employed by the Defendant prior to 1965, and was required to work in confined spaces containing a great deal of asbestos. It was held that the Defendant as his employer should have taken precautions, or at the very least made enquiries about how precautions could be taken. Hale LJ said that “There is no reassurance to be found in the literature that the level of exposure found by the judge in this case was safe and much to suggest that it might well not be so”.
The Court of Appeal decision in Maguire concerned the wife of a boilermaker in a shipyard, whom it was asserted had died as a result of contact with asbestos from her husband’s work clothes between 1961 and 1965. Judge LJ held that it was not possible to hold that Harland and Wolff had failed to address a risk of secondary contamination, which had not been identified or addressed by anyone else within or outside the industry. The claim was dismissed. However, Longmore LJ held that after Jeromson the Court of Appeal was bound to proceed (as between employer and employee) on the basis that an employer will be in breach of duty if he failed to reduce his employee’s exposure “to the greatest extent possible”, reading possible as “practicable”.
Accordingly, as it was accepted by the engineering experts that further steps could have been taken to have reduced Mr Bussey’s exposure to asbestos, such as the use of respirators, and there was no evidence of such steps having been taken, the Claimant submitted that the First Defendant must have been negligent at common law.
His Honour Judge Yelton (sitting as a Judge of the High Court) found that he was bound by the decision of the Court of Appeal in Williams. The effect of that decision was to apply the levels as set out in TDN13 as the relevant standard by which foreseeability of injury was to be judged. On the evidence, the Judge decided that Mr Bussey’s exposure to asbestos would have been below those levels. Although Mr Bussey’s exposure preceded TDN13, the Judge observed that it would be perverse to find that the guidance increased rather than deceased the levels of exposure which a responsible employer would regard as safe.
The Judge relied on the dictum of Lord Neuberger in the Supreme Court decision in Willers v Joyce  which was to the effect that where a Puisne Judge faced inconsistent Court of Appeal decisions, he/she should follow the later decision(s). Further, where the same Judge faced prior decisions by Courts of co-ordinate jurisdiction then he/she should follow those prior decisions. The Judge referenced several cases (Billingham v John Barnsley & Sons  cited amongst others) which had followed the test for common law breach of duty set out in the Court of Appeal decision in Williams.
The Judge rejected the submission that Williams does not apply to claims brought by employees on the basis that Williams had been followed in subsequent cases, namely, Woodward v Secretary of State for Energy and Climate Change  and in Smith v Portswood House Ltd  both of which involved claims brought by employees of the respective defendants.
Mr Bussey’s claim was dismissed and the Judge refused the Claimant’s Application for permission to Appeal to the Court of Appeal.
The First Defendant was represented by Damon Burt and Abigail Burgoine of Plexus Law Evesham
Scotland – Discount Rate Announcement29 March 2017
Discount Rate Announcement: Discount Rate Reduction – Plus 2.5% to Minus 0.75%
The Scottish Government passed an order yesterday – The Damages (Personal Injury) (Scotland) Order 2017 which makes the Discount Rate in Scotland minus 0.75 with effect from 28th March and brings Scotland into line with England & Wales.
The UK Government has said it will review the framework under which the discount rate is set and will shortly launch a consultation which will consider:
- Whether the rate in future should be set by an independent body.
- Whether more frequent reviews would improve predictability and certainty for all parties.
- Very importantly whether the methodology which assumes that Claimants only invest in Index Linked Gilts is appropriate for the future i.e. are all Claimants risk averse investors or invest in other investment vehicles where returns are far greater?
We anticipate that the Scottish Government will follow the Consultation and its outcome closely. It remains to be seen whether there will be a similar consultation in Scotland.
As in England and Wales, the practical effect is that rather than awards of damages being discounted for accelerated receipt they will now be uplifted for accelerated receipt.
This obviously has a huge impact for the insurance and risk management industry given that returns on premium income remain low. We will see a substantial increase in the value of future loss claims.
Periodical Payment Orders (PPOs) are not yet part of the landscape in Scotland and can only take place by agreement. However, it is anticipated that they will be part of a Costs Bill which will start its progress in the Scottish Parliament before the summer and in the new landscape PPOs may be attractive to insurers in Scotland.
As in England and Wales insurers and compensators will need to review their strategy in each case affected by the change. We suggest:
- A review of all reserves where future losses are being claimed to ensure that they are increased where appropriate
- Where a Tender (Part 36 offer) has previously been made then such offers should be reassessed and increased as appropriate
- Review strategies for upcoming Pre-trial meetings or Proofs (Trials)
Cameron McNaught, Partner
T: 0131 3229 252 E: email@example.com
Credit Hire – Basic Hire Rates17 March 2017
Basic Hire Rates – the full Monty
McBride v UK Insurance Ltd and Clayton v EUI Ltd  EWCA Civ 144
Credit hire companies received a significant blow this week when the Court of Appeal handed down its judgement in the two appeals of McBride v UK Insurance Ltd and Clayton v EUI Ltd  EWCA Civ 144.
The decision of the Court:
- The decision in Karl Stevens v Equity Syndicate Management  EWCA Civ 93 was correct and consistent with the Court’s previous decision in Pattni/Bent (no.2)  EWCA Civ 1384 and Burdis v Livsey  EWCA Civ 510; absent of a claimant being impecunious, the evidence of the lowest basic hire rates will apply.
- Where there is evidence before the Court of basic hire rates for an appropriate vehicle then the Court should not allow a credit hire company to recover its full charges.
- Any nil excess point must be considered separately and should not interfere with the exercise of stripping out the irrecoverable elements and the principle laid down by Dimond v Lovell  1 AC 384.
- Courts should readily admit evidence of off the shelf excess elimination insurance obtained from the internet as the norm. Such evidence should be accepted as evidence to demonstrate the reasonable costs of obtaining a nil excess, provided it is for a comparable car and for the same period actually hired.
- If there is insufficient evidence of suitable excess elimination insurance then the Court is perfectly entitled to make adjustments to the basic hire rates to reflect that position or, if satisfied the credit hire company’s charge for this was reasonable then it may award that reasonable charge and add this to the lowest basic hire rate
- Where there is a deficiency in the basic hire rates due to period, such as only 28 day rates are in evidence and the Court finds a 7 day rate should apply, then in taking a realistic approach the Court may take judicial notice that rates are higher for 7 days and make adjustments to the basic hire rates evidence to reflect that position; Courts should not be confined to a rigorous and exacting approach.
Key Points of Law
Lord Justice Flaux (with whom Sir Timothy Lloyd and Sir Stanley Burton agreed), made it absolutely clear that where there was evidence of a lower basic hire rate for the appropriate vehicle, and the Claimant was not impecunious, then the Court’s primary exercise was to identify and strip out the irrecoverable elements of the credit hire and any point abut nil excesses must not interfere with that exercise, but should be looked at separately.
Accident Exchange Ltd, whom stood behind the Claimants for the purpose of the appeals, argued that its nil excess formed part for overall rate and where the Defendant’s basic hire rate did not provide a nil or modest excess, then the Court should find the Defendant has not sufficiently demonstrated there was an appropriate lower basic hire rate.
However, Flaux LJ firmly dispelled that view stating it sought to erode the principle laid down in Dimond v Lovell  1 AC 384 and would create a further exception to the established principle that only the impecunious claimant may recover the full credit hire rate. He went on to state the Court should ensure the irrecoverable elements of the credit hire are stripped out and it should not allow the excess point to be used “as a smokescreen to enable credit hire companies to recover their charge in full”. What the Court found striking was the fact that Accident Exchange was also the hire company in Stevens and in that appeal it argued the complete opposite and asked for its credit hire rate to be compared to a basic rate from Europcar with a £500 excess and that was on the basis a separate excess elimination insurance could be obtained.
The thrust of the primary challenge against lowest basic hire rates was on the premise that the ratio in Stevens was inconsistent with the previous decisions of the Court of Appeal in Pattni/Bent (no.2) and Burdis v Livsey. However, following a detailed analysis of the authorities Flaux LJ was satisfied that the Court’s decision in Stevens was not only binding on the Court and consistent with its previous decisions, but it was equally consistent with the majority of their Lordships in Dimond v Lovell  1 AC 384. Furthermore, Flaux LJ felt it belied common sense that a reasonable person wishing to hire and faced with a range of rates from reputable car hire companies would normally do anything other than to choose the lowest rate.
Whilst the appeal against the Stevens being inconsistent with previous authorities was dismissed, the Court allowed permission to appeal and automatically dismissed it. This was done on the invitation of Benjamin Williams QC for McBride to allow Accident Exchange, if it could, to seek persuade the Supreme Court to grant permission to appeal on this ground. And so the saga may not be over, just yet!
Implications for clients
This further judgment should be welcomed news for those who defend credit hire claims. Not only does this decision finally provide certainty in this area of law, but it should resolve the divergence of judicial opinion as to what evidence is permissible and how to deal with any deficiencies in that evidence. Therefore, going forward, absent of an impecunious claimant then any properly challenged credit hire with basic hire rates evidence for the appropriate vehicle should result in the lowest basic hire rates being awarded and Courts should no longer award the full credit hire rate due to some rigorous and exacting approach.
As a consequence of this judgment it is possible some credit hire companies will look to improve their position by simply increasing and perhaps staging their charges for their excess elimination, i.e. charge (a) will reduce to the excess of say £1,000 to £250 whilst an additional charge (b) will reduce this further to nil. However, the Court of Appeal has made clear that off the shelf insurance products from the internet must now be accepted as the reasonable costs of these products and so this will hopefully go some way to defeat any such change to a credit hire company’s pricing strategy.
Danny Fulton, Head of Credit Hire Strategy
T: 0344 245 5365
Discount Rate Announcement27 February 2017
Discount Rate Reduction – Plus 2.5% to Minus 0.75%
The Lord Chancellor has today (27th February, 2017) announced to the London Stock Exchange that the discount rate last set in 2001 is now being reduced from +2.5% to -0.75%. This downwards movement of a huge 3.25% will become effective on 20 March 2017.
The Lord Chancellor’s announcement states that, having completed the Statutory Consultation, the reasons for the significant reduction are:
- Discount rates should be based on a 3 year average of real returns on Index Linked Gilts
- It is recognised that there are significant implications across the Public and Private Sector. The Government has committed to ensuring that the NHS Litigation Authority has appropriate funding to cover the increased clinical negligence costs (no details are provided but they must run into billions)
- The Government will review the framework under which the discount rate is set and forward a consultation before Easter which will consider:
- Whether the rate in future should be set by an independent body.
- Whether more frequent reviews would improve predictability and certainty for all parties.
- Very importantly whether the methodology which assumes that Claimants only invest in Index Linked Gilts is appropriate for the future i.e. are all Claimants risk averse investors or invest in other investment vehicles where returns are far greater.
- Urgent meetings with the Insurance Industry representatives are being arranged by the Lord Chancellor.
The practical effect is that rather than awards of damages being discounted for accelerated receipt they will now be uplifted for accelerated receipt.
This obviously has a huge impact for the insurance and risk management industry given that returns on premium income also remain so low.
Some future loss claims could double in value and an uncomplicated worked example without other reduction factors is:
- A 40 year old man losing £20k PA until retirement age 65 years would previously have a future loss of £362k (unadjusted working life multiplier of 18.09).
- The multiplier is now 26.5 and the losses are £530k i.e. a 46% increase.
PPOs (Periodical Payment Orders) could become more attractive again now to insurers.
This announcement by the Lord Chancellor will make a very significant difference indeed in respect of future losses for Large Loss claims. Although a Judicial Review may be considered there are urgent strategies that need to be deployed including:
- A review of all reserves where future losses are being claimed to ensure that they are increased where appropriate.
- Where a Claimant has previously made a CPR Part 36 offer to settle then these should be urgently reviewed and accepted in appropriate cases.
- Where a Defendant CPR part 36 offer has previously been made then such offers should be reassessed and increased as appropriate.
- Review strategies for upcoming without prejudice JSMs (Joint Settlement Meetings), mediations or Trials.
- Review and amend Counter Schedule of Loss.
- Consider the benefit of PPOs.
- At present the Ogden Tables do not have a -0.75% column but we have a spreadsheet with appropriate multipliers for this discount rate if required.
- Consider delaying any large lump sum settlement until after the Lord Chancellor has determined the further consultation regarding how Claimants actually invest damages awards?
NB: The Scottish Government are also looking at Discount Rate and when they make an announcement a further Legal Update will be provided.
Anthony Baker, Partner
DDI: 0344 245 4202
M: 07811 545 32
R “HSE” v University of Northumbria at Newcastle26 January 2017
R “HSE” v University of Northumbria at Newcastle
(Newcastle Crown Court: HHJ Bindloss)
25 January 2017
Peter James, Partner at Plexus Law represented Northumbria University in a Health and Safety prosecution after two students overdosed on caffeine during experiment.
The University was charged with and pleaded guilty to an offence pursuant to Section 3(1) of the 1974 Health and Safety at Work etc. Act.
A practical exercise was being undertaken to assess the effects of caffeine on the body during strenuous exercise. This practical had taken place once a year since 2009 without incident.
Two students volunteered to take the caffeine in a soluble form and undertake the exercise. The students had received a lecture, which identified the risk of caffeine overdose prior to the exercise
When they attended the lab, a laboratory practical guide was provided which identified the amount of caffeine to be ingested should equal 4mg per kilo of body mass. To assist the second year students, 2 technicians attended the practical session, one educated to degree level.
Instead of calculating 4mgs x 76.6 (one of the students weight) giving 306.4mgs (0.306 of a gram), the calculation was undertaken as .4g x 76.6 giving 30.68gs and weighed out on the scales in grams. A similar mathematical error was made in calculating the amount of caffeine to be ingested by the other student. While the risk had been identified and all previous calculations undertaken correctly, the practical guide did not spell out the exact calculation required, the maximum dose or any inbuilt checks. There was therefore a risk of miscalculation.
Counsel for the HSE submitted that a £3.6 million starting point based on the University being a “very large “organisation and with a “high” culpability, “level A” harm and “high” category 1 “likelihood” of harm.
Following submissions from Peter Smith of Deans Court Chambers instructed on behalf of the University, the learned Judge found the University could not be classed as a very large organisation although its income significantly exceeded £50 Million. Further, that although finding “high” culpability and level A harm, accepted that the “likelihood” of the harm occurring was “medium”.
In the result, the learned Judge arrived at a starting point of £900,000 (range £550,000 to 2,900,000) reducing it to £600,000 given the University’s charitable status, public benefit and mitigation. A further reduction was made for a guilty plea and a £400,000 fine was imposed.
The HSE’s own expert Dr Poole no doubt influenced the issue on the “likelihood” of harm expressing part of his opinion thus:
“If the students and supervising technicians have a GCSE qualification in mathematics, they should be able to do this calculation as it required no more than simple multiplication. I am surprised that neither the students nor the technicians could do this calculation without the need for additional training”.
The “likelihood” of harm was argued as low on the University’s behalf.