13 December 2013 Edition 29
BC DISEASE NEWS A WEEKLY DISEASE UPDATE
CONTENTS
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Welcome Welcome
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FOIL seeks greater clarity Welcome to this week’s edition of BC Disease News. In the last week the on Jackson reforms Mesothelioma Bill has started its committee stage in the House of Commons and the Government has defended the referral fee ban. Mesothelioma Bill starts This week we present a feature examining whether NIHL really is a committee stage ‘disease’. Government defends fee Any comments or feedback can be sent to Boris Cetnik or Charlotte ban Owen.
Mitchell in action? As always, warmest regards to all.
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Case note: pre- commencement disclosure
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Feature: is NIHL a ‘disease’?
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We should add that we expect the The Committee adjourned and was FOIL seeks greater approach to both budgeting and scheduled to sit again on 12 fundamental dishonesty to be strict. If December. BC Disease News will clarity on Jackson the Mitchell ruling is anything to go by continue to update on the progress of reforms then budgets will be rigorously the Bill. enforced because amendments will
be expected to be made when Government defends necessary. Moreover, the courts have The Forum of Insurance Lawyers (FOIL) recently taken a firm line to dishonesty has said that practitioners still require a fee ban in personal injury claims (remember Mrs lot more clarity on the Jackson Fari who was recently imprisoned for a reforms.1 The Government has defended the grossly fraudulent personal injury current referral fee ban despite The president of FOIL, David Johnson, claim?) Only a strict approach can be criticism that it is ineffective.3 has said that edginess around relief expected and should be prepared for. from sanctions has already compelled Justice Minister Lord McNally has a lot more compliance. He said the Mesothelioma Bill stated he believes the ban on referral Court of Appeal’s ruling in Mitchell fees in personal injury will work. The ban (examined extensively in edition 27) starts committee was implemented on 1 April 2013 ‘represents the stick that people had having been enacted in section 56 of feared was there and will continue to stage the Legal Aid, Sentencing and drive change’. Punishment of Offenders Act 2012. The Mesothelioma Bill has started its McNally told the House of Lords last However, he says ‘a lot more clarity’ is committee stage in the House of week that he was ‘confident’ the SRA needed in other areas of the Jackson Commons. would deal with any breaches of the reforms. In particular, more clarity is ban. needed on how the courts will react to The Bill is being examined line by line applications to amend budgets and by a Public Bill Committee. So far Even if the SRA does enforce the ban it how rigidly budgets will be enforced at clauses 2 and 3 have been agreed must be doubted if this is enough. It is the end of cases. without amendment. well known that myriad methods have been developed to legitimately In addition, he notes that practitioners As expected there was considerable circumvent the ban: its terms are are still unsure as to what constitutes debate about the rate of payments technically complied with but its spirit if ‘fundamental dishonesty’ such that the made under the scheme. The flagrantly flouted. The SRA has said claimant loses there costs protection Government currently intends that itself that it cannot enforce the spirit of under the qualified one way costs payments will be equivalent to 75% of the ban.4 Parliament needs to shifting regime (QOCS). Furthermore, the damages that would be awarded reconsider the terms of the referral fee there is a lack of clarity about the in the courts. Seven amendments to ban to ensure that its intention is interaction between QOCS and Part the Bill were proposed, each of them actually enforced. 36. We have previously highlighted the intending to increase the payments. interpretation issue as to what exactly The proposed rates were 80%, 90%, Mitchell in action? ‘fundamental dishonesty’ entails. 100% and even 110% of the level of damages awarded in the courts. The It has been only a short time since the Aside from the Jackson reforms, proposed amendments were Court of Appeal released its judgment Johnson said that going forward ‘FOIL outvoted.2 in Mitchell v News Group Newspapers will be forthright in presenting the (examined extensively in edition 27 of defendant insurer lawyer perspective In addition, a new clause 4 was Disease News), but we already have a but I’m keen to make the most of proposed advocating the need for an judgment which appears to apply its opportunities to work with organisations annual report on the scheme, dealing principles.5 such as APIL… to collaborate where specifically with whether the scheme had led to a rise in insurance possible to achieve sensible and In Forstater v Python (Monty) Mr Justice premiums. The amendment was effective reform’. Norris granted relief from sanctions withdrawn after debate. where a successful party failed to serve
a notice of its funding arrangements 6 on form N251.
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The judgment had been drafted This appears to be an application of The Court of Appeal so held in Smith v before the Court of Appeal ruling in the first limb of the test set out in Secretary of State for Energy and Mitchell, but Mr Justice Norris said his Mitchell. In Mitchell at [40] the court Climate Change,7 a case concerning decision ‘proceeds along correct said relief would likely be granted for alleged noise induced hearing loss. The principles’ and did not need reviewing. trivial non-compliance when an 65 year old claimant had been application for relief is made promptly. employed between 1964 and 1994 by The case concerned the royalties from This includes a ‘failure of form rather the Coal Board. He brought the play ‘Spamalot’. When the second than substance’. The failure in this case proceedings against his employer’s claimant was joined to the first was merely of form (literally); the successor, the defendant, alleging that claimant’s conditional fee substance of the rule had been inadequate steps had been taken to arrangement (CFA) it failed to complied with: the defendant was protect his hearing, causing hearing complete and serve form N251. The made aware of the CFA by other loss. The claimant sought an order for defendants had been made aware of correspondence. pre-action disclosure of certain the CFA through correspondence documents under CPR 31.16. CPR however. While seemingly a perfect application 31.16(3)(a) and (b) provided that such of the approach expounded in an order could only be made where The consequence of this failure was Mitchell, the case does raise questions. the applicant and the respondent that, under CPR 44.3B, upon winning How tolerant will the courts be of using were likely to be parties to subsequent the claim the second claimant was incorrect forms or no forms at all, so proceedings. The district judge unable to recover any part of its long as the rules are complied with in granted the application but the success fee unless the court ordered substance? This ruling suggests decision was reversed on appeal by otherwise. completion of form N251 is optional so the circuit judge who held, following long as notice of funding is given. What Kneale v Barclays Bank,8 that there was In his judgement, Norris J said the is the value of the rules requiring a jurisdictional ‘arguability threshold’ failure was a ‘simple oversight, without certain forms to be used if this is not test for such an application which had good explanation. Moreover, ‘it [was] then enforced? Will the courts grant vitally important to the administration not been met. relief but impose a costs penalty for of justice that the rules of procedure non-compliance with the rules? Later On appeal to the Court of Appeal the [were] observed’. However, there was cases should hopefully answer this. issue was what the correct threshold a distinction to be made between a test was for a claimant to satisfy before failure to comply with a rule of general the court had jurisdiction to make an application through human error and Case note: pre- order for pre-action disclosure. The a failure to comply with a specific appeal was allowed. Having order made in the action itself ([46]). commencement considered Black v Sumitomo Corpn9 and Kneale, Underhill LJ concluded The defendant had been made aware disclosure that there was not a requirement that of the CFA which fulfilled the policy In order for the court to have a claimant in a pre-action disclosure embodied in CPR 44.3B, although not jurisdiction to make an order under application had to show, as a matter in the technically correct away. The CPR 31.16 for disclosure before the of jurisdiction, a prima facie case substance of the rule had been commencement of proceedings, it which is more than a merely complied with ([46]). Conveying was not a requirement that the speculative ‘punt’. There was no information on the funding applicant have an arguable case in jurisdictional ‘arguability threshold’ in arrangement in the way the claimant those proceedings. CPR 31.16. All that has to be shown is did had no discernible impact on the that the applicant and respondent conduct of the litigation. might be parties to subsequent proceedings. Beyond that, the Norris J was also influenced by the fact that refusing to grant relief would leave question of pre-action disclosure was the second claimant liable to pay the one of discretion. On the facts the success fee which could result in judge had been right to grant the litigation with its solicitor. application.
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‘in my judgment, a disease, unless For defendant practitioners this The position under the CPR specifically included and incorporated judgment sends a clear message: into the rules is a biological process applications for pre-action disclosure What does the CPR tell us about the caused by a virus, bacteria, noxious should not often be resisted on the meaning of ‘disease’? There is no substance of parasite’. Therefore NIHL ground that any subsequent claim is specific definition. However, the pre-1 was not a ‘disease’ because it was not weak; there is no threshold. However, April CPR 45.23(3) provides that caused in any of those ways. where there is no prospect of a would- ‘disease’ includes Type A, B and C be claimant establishing a viable claim claims. Type A claims relate to disease The decision in Smith was based almost then the court can be asked to or physical injury alleged to have been exclusively on the reasoning of Males J caused by exposure to asbestos. Type exercise its discretion to refuse the in Patterson v Ministry of Defence,1 1 B claims relate to psychiatric injury application. which is the only direct binding alleged to have been caused by work- authority on the point. We will shortly related psychological stress and work- consider this decision in detail. Feature: is NIHL a related upper limb disorder which is alleged to have been caused by ‘disease’? Is NIHL really not a disease? physical stress or strain (but excluding hand/arm vibration injuries). Type C Is NIHL a ‘disease’? It might seem a At first blush the decision in Smith is claims related to diseases not within rhetorical question. After all, NIHL has nonsensical. NIHL has always been Types A or B. The Pre-Action Protocol always been dealt with as a disease. treated as a disease. Surely it cannot for Disease and Illness Claims provides, However, the legal position is far from be right that ‘disease’ is so narrowly in paragraph 2.2, that a ‘disease’ is clear. In this article we seek to defined? In fact, do the CPR and the essentially an injury not caused by a determine if NIHL really is a ‘disease’. disease protocol not show that single accident or event. ‘disease’ is wider than the natural Why does it matter? meaning adopted in Smith: the The definition appears to be very wide. conditions mentioned in Type A and B The ‘diseases’ mentioned in Types A Why does it matter if NIHL is a disease claims are wider than this natural and B include conditions that would or not? Firstly, it matters because it meaning (including, for example, work not be referred to in ordinary parlance affects the level of success fee paid to related repetitive strain injury) and the as ‘diseases’. But they all arise after claimants in pre-1 April 2013 cases (of disease protocol captures essentially more than a single event. On that which there is a significant number). In all injuries that are not the result of a basis, NIHL is plainly a ‘disease’: it arises ‘disease’ claims that settle the success single incident or event? Is this not the after prolonged exposure to excessive fee is set at 62.5% by the pre-1 April real test – whether the condition is noise. Moreover, NIHL has consistently CPR 45.24(2)(c)(ii) (CPR 45 Section V). caused by a single event? In other employers’ liability ‘bodily’ been treated as such. injury claims the success fee is 25% These were in fact the arguments (CPR 45 Section IV). Accordingly, it is Smith v Secretary of State for Energy deployed in Patterson,12 a case preferable for claimants if NIHL is and Climate Change concerning non-freezing cold injury treated as a ‘disease’ and preferable (NFCI). The cases do not agree that NIHL is a for defendants if NIHL is not treated as a ‘disease’. Secondly, it matters for the ‘disease’. In the recent (non-binding) Patterson v Ministry of Defence purposes of the new EL/PL Protocol. county court decision in Smith v Secretary of State for Energy and Against these arguments, the When claims enter but subsequently Climate Change, District Judge Davies defendant in Patterson argued that drop out of the Protocol a regime of 10 the express inclusion of certain injuries fixed recoverable costs still apply, held that NIHL was not a ‘disease’. in Type A and B claims in the definition unless the claim is a disease claim. It Accordingly, the lower rate success of diseases does not justify treating therefore matters what is a ‘disease’ so fee applied. ‘disease’ as a term wider than its practitioners know if fixed costs apply. At [22] the District Judge concluded ordinary meaning. Further it was that NIHL represents ‘excessive wear argued the Protocol definition of and tear on the delicate inner ear ‘disease’ is not suitable either. The structures’. In answering the question of provisions in CPR 45 section V were an whether this ‘wear and tear’ exception to the general rule in section amounted to a disease or an injury, the IV and should be construed narrowly.13 District Judge determined at [26]:
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Males J noted at [14(4)] that the meaning the term "disease" was Turning then to consider if justification
definition of disease in the CPR intended to have. It is unlikely to be could be found in the definition of appeared to have a wider meaning enough to say that an extended ‘disease’ in the disease pre-action than its ordinary meaning of the word meaning was intended unless it is protocol, Males J found that the having regard to the express inclusion reasonably clear what that meaning meaning of ‘disease’ in the protocol of some injuries not traditionally was’. was ‘extremely wide’, including almost regarded as diseases.14 anything not solely caused by an 16 Applying these principles, Males J accident or other single event’. He At [18] Males J set out ‘clear’ principles dealt, firstly, with the suggestion that rejected that it could be used to of interpretation: ‘(1) The task of the the inclusion of certain injuries in the determine the definition of ‘disease’. court is to ascertain the intention of the definition of Type A and Type B Firstly, the definition in the protocol only legislator expressed in the language ‘diseases’ meant ‘disease’ should be purported to describe ‘primarily’ what under consideration. This is an construed widely. His Lordship was covered by the term and ‘only for objective exercise. (2) The relevant concluded at [39] that the inclusion of the purpose of this protocol’: it provisions must be read as a whole, these bodily injuries represented explicitly applied no further and is not 17 and in context. (3) Words should be specific extensions of the ordinary strictly part of the CPR. Secondly, the given their ordinary meaning unless a meaning of the term ‘disease’ and did terms of paragraph 2.2 of the protocol contrary intention appears. (4) It is not demonstrate with sufficient clarity were available to the draftsman of legitimate, where practicable, to that the intention of the legislator was CPR 45 who could have used or assess the likely practical to apply an extended meaning more adapted the definition if he wished, consequences of adopting each of generally. More compellingly still, Males but he did not do so. For that reason the opposing constructions, not only for J held that the term ‘disease’ could there were no grounds for concluding the parties in the individual case but not be defined at all by reference to that ‘disease’ in CPR 45 was to be for the law generally. If one the conditions included in Type A and interpreted by reference to the 18 construction is likely to produce B claims because the term ‘disease’ protocol. absurdity or inconvenience, that may appeared as an exclusion from Section Consequently it had not been be a factor telling against that IV when Section IV was first introduced demonstrated that ‘disease’ in CPR 45 construction. (5) The same word, or in October 2004. At that time however, was used in other than its natural and phrase, in the same enactment, should Section V did not yet exist (it being ordinary meaning, save to the extent be given the same meaning unless the introduced on 1 October 2005). that certain conditions had been contrary intention appears’. ‘Disease’ must nevertheless still have included in Type A and B claims. 1 9 had a meaning before then by reason Moreover, it would not be practicable Having identified these principles of of its inclusion in Section IV and it was or sensible for the court to attempt to interpretation the Judge expressed the not suggested that the introduction of supply its own definition.20 In view of following general principles at [24]: Section V changed the definition of that, Males J concluded that NFCI was ‘First, "disease" must if possible be ‘disease’ in section IV. The definition of not a ‘disease’ because it was ‘not construed in a way which does not ‘disease’ could not be determined by caused or contributed to by any virus, result in the exception taking up most provisions that were not in existence. bacteria, noxious agent or parasite’.21 of the room occupied by the basic or Accordingly if ‘disease’ did have an default rule in Section IV. Second, and extended meaning, the justification Implications and conclusion as already noted, the starting point had to be found elsewhere.15 must be the natural and ordinary Patterson was not an NIHL claim and meaning of the words used, in their does not strictly bind other courts in context. It may be of course that the such cases. However, its reasoning is context shows that a more extended seemingly impeccable and doubtlessly or unusual meaning was drove the court in Smith to the intended…but I start from the position conclusion it reached. that unless that is demonstrated to be the case, the likelihood is that the words used were intended to have their natural meaning. Third, if there is to be a departure from or extension of the natural meaning, it must be at least reasonably clear what extended
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NIHL is not, we are told, a ‘disease’. This full recovery can be made in the References means practitioners have normal way. While this reasoning is 1 Neil Rose, ‘New FOIL Chief Seeks “Greater unquestioningly incorrectly treated it as correct in principle, the suggestion that Clarity” on Jackson Reforms’ (Litigation such for years, as noted in Smith.22 Can this argument could be deployed is Futures, 6 December 2013) we be genuinely sure that NIHL is not a flawed for two reasons. Firstly, you
litigation on this point should be future claims defendants will not be 3 ‘McNally “Confident” on Fee Ban’ (Law expected. In the meantime, making recovery at all where they are Society Gazette, 9 December 2013) defendant practitioners should strongly successful because of the introduction
recoverable costs apply. In those 11 [2012] EWHC 2767 (QB) circumstances arguments based on
case treated as a disease so that fixed
recoverable costs do not apply and
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12 ibid [16(5)-(6)].
13 ibid [17(2),(3) and (5)].
14 ibid
15 ibid [41].
16 ibid [43].
17 ibid.
18 ibid [44].
19 ibid [46].
20 ibid [50].
21 ibid [48].
22 Smith (n 10) [28].
Disclaimer
This newsletter does not present a complete or
comprehensive statement of the law, nor does it constitute
legal advice. It is intended only to provide an update on issues that may be of interest to those handling occupational disease claims. Specialist legal advice should always be sought in any particular case.
© BC Legal LLP 2013.
BC Legal is a Limited Liability Partnership registered in England and Wales under number OC379945. We are authorised and regulated by the Solicitors Regulation Authority. The registered office is 1 Nelson Mews, Southend- on-Sea, SS1 1AL. The partners are Boris Cetnik and Charlotte Owen. More details on the firm can be found at www.bc- legal.co.uk
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Partners: B. Cetnik, C. Owen Registered Office: 1 Nelson Mews, Southend-On-Sea, SS1 1AL BC Legal LLP is a Limited Lability Partnership registered in England and Wales Registered No: OC379945 We are Authorised and Regulated by the Solicitors Regulations Authority (SRA No 590579)
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