iIssn 1475-4711

June 20042005

Contents

Editorial 2

interests and activities. Its primary difference from autism component of his damages. Some reference was made Education – stale claims is that there is no general retardation in language or to the Phelps decision and the award for loss of earnings cognitive development). in that case. The CA suggested a figure nearer £15,000 would be appropriate in this case. In puberty the claimant developed a preoccupation with 3 The claimant was unable to recover the damages young girls and fire setting. He was convicted of arson for the consequences of his convictions for arson. and lost opportunity and was made the subject of a restriction order under the Clunis v Camden & Islington (1998) QB978 applied. Mental Health Act 1983. 4 The court was especially critical of the case management Public inquiries – fairness and privilege of this case which had led to the joint statement of the Despite the landmark House of Lords decision provisions of Section 11, Section 14 and Section 33 of the The trial was unusual in that the defendant education psychiatrists being produced on day one of the trial and in Phelps v London Borough of Hillingdon (HL Limitation Act 1980. authority did not call any independent expert educational the defendant’s educational psychologist not being psychology evidence and instead relied on the evidence of given the opportunity to counter late served expert 27 July 2000), so called ‘failure to educate’ Their Lordships agreed that the earlier Court of Appeal the two educational psychologists involved in the material from the claimant. In particular the court said claims have remained difficult to prove and (CA) decision in Robinson v St Helens Metropolitan BC claimant’s original assessment. that in future education negligence claims any order for Jim Sherwood 3 win. Two recent court decisions highlight the (2003) PIQR P128 had been rightly decided. A negligent expert evidence should require the expert to identify the difficulties for prospective claimants. failure to ameliorate the consequences of dyslexia by The trial judge found that the educational psychologist learned articles, text book entries and research studies appropriate teaching may be said to constitute an injury. (Mr Moreland) had been negligent in failing to identify the relied on (as is commonly done in clinical negligence They believed that it was too fine a distinction to say that claimant’s complex social and communication needs – such claims). The senior procedure master was to consider In David Adams v Bracknell Forest Borough Council the neglect had caused no injury because nothing could needs not being appropriately catered for at the school to standard directions in these cases. The court also (HL 17 June 2004), the House of Lords was concerned be done to repair the congenital damage in the brain, or which he was sent. On causation the judge held that the emphasised that expert witnesses must not be permitted with the thorny issue of limitation. The claimant was to argue that the other parts of the brain which would failure to send the claimant to an appropriate school to depart substantially from their written report unless educated by the defendant between 1977 and 1988. He have to be trained to compensate had never been injured. resulted in a loss of opportunity for the defendant to learn the trial judge was satisfied that there would be no issued proceedings when he was aged 30 in June 2002. how to improve his social and communication skills, to injustice to the parties. Furthermore, the trial judge The claimant suffered from dyslexia. The distinctive The majority of their Lordships also concluded that whilst manage his behavioural difficulties and to gain an end should not (without good reason) adopt a differential Pleural plaques – anxious times ahead features of this condition are a combination of average to his dyslexia might have inhibited the claimant from qualification. He ordered damages to be assessed on that approach towards evidence from different categories of good general mental ability with severe and long term seeking advice, he ought reasonably to have sought basis. The local educational authority appealed. witness (ie expert and lay witnesses) as was done by the difficulties in reading, writing and spelling. It is not expert advice years ago. In the absence of evidence that trial judge in this case. curable but in some cases suitable teaching can his injury prevented him from seeking expert opinion In the CA, the appeal on liability was dismissed. The ameliorate its effects. about its cause, it could not be assumed that any such appeal on causation was allowed and the case was Undoubtedly, the defendants were hindered at trial by difficulty existed. Their Lordships therefore concluded that remitted for the judge to assess damages on the basis of the decision not to call their own, fresh expert evidence. Mr Adams’ dyslexia was not formally diagnosed until the relevant date of knowledge for the purposes of their findings on causation. The key findings were: The case does still demonstrate the considerable John Harland 6 November 1999. Prior to that he had known that he had considering limitation accrued well before the three years 1 The evidence of the defendant’s psychologist was evidential hurdles which claimants need to overcome suffered from some psychological affect linked to his poor prior to the issue of the summons. The defendant’s appeal admissible. The fact that such an expert might lack the where they are suffering from a complex behavioural reading and writing skills. was allowed and the action dismissed. This case is of objectivity of an independent expert went to the issue emotional and learning problem (a common feature in particular interest to insurers and local education of cogency not admissibility. Whilst critical of the these claims). The defendants must always focus on The claimant argued that for the purpose of limitation his authorities because of the strong policy stance taken judge’s approach, the court believed that what would have been the outcome but for the alleged date of knowledge was November 1999. He relied on the against stale claims – a particular feature of these he had balanced the testimony of the claimant’s expert professional negligence or alternative teaching options, decision in Phelps that a failure to ameliorate a congenital education claims. It also reaffirms the personal injury against the defendant’s educational psychologist which it is maintained should have been provided in condition can constitute a personal injury and that a three classification for this type of claim. (despite not expressly doing so in his judgment) and the first place. Often the teaching regime suggested by year limitation period applied subject, of course, to the that it would be wrong to order a re-trial on this basis. the claimant would have made no material difference In DN (by his father and litigation friend RN) v London 2 On causation, the trial judge had overstated the effect to the outcome in any event. Stress: rising pressure, rising claims Borough of Greenwich (CA 8 December 2004), the of the expert psychiatric evidence and had been wrong CA was concerned with a first instance decision of Judge to find that the defendant’s negligence had caused the It is also encouraging to see the courts starting to treat Overend concerning an adverse finding on liability claimant to lose the opportunity to learn how to these claims with the specific procedural interest that they and causation against the defendant local education improve his social skills etc. The judge should have deserve and which has until now been reserved to other authority. The claimant was assessed and found to have approached the question by considering, on the specialised claims. special educational needs at the age of 5. At 10 the balance of probabilities, what would have been the Vivienne Williams 9 defendant’s educational psychologist prepared a report likely outcome if the claimant had gone to an and in consequence the claimant was educated at a appropriate school. The claimant had at all material school for children with educational behavioural times been severely damaged (independent of his difficulties. It was not until the age of 12 that he was Asperger’s Syndrome) and all the experts could say on diagnosed as suffering from Asperger’s Syndrome (this the balance of probabilities was that the outcome syndrome is characterised by the kind of abnormalities of would have been better or different if his education had reciprocal social interaction that typify autism coupled been different. The court held that the claimant could Jeff Wale with a restricted, stereotyped, repetitive reservoir of only justify a small award for the loss of earnings Partner, BLM Southampton Education – stale claims and lost opportunity

12 DISCLOSURE • JUNE 2005 DISCLOSURE • JUNE 2005 13 Jeff Wale 12 Page 12: Are specialist claims gaining the interest they deserve? Council cleared of corporate manslaughter Chris Green 14

The CA responds to To catch a thief dishonest claimant Julian Smart 16 Yvonne Painting v University of Oxford

Mrs Painting was employed by the University of Oxford as an administrator. On 1 June 1999 she fell from a stepladder whilst fetching a file from a shelf and sustained a back injury. It was her responsibility to ensure that work equipment was in good order. At the time of the accident she was heavily pregnant. The University conceded primary liability for the accident and the claimant accepted a reduction of 20% in respect of contributory negligence. The CA responds to dishonest claimant The claimant commenced proceedings relying The defendant applied for an order that the claimant upon evidence from an orthopaedic surgeon who pay the defendant’s costs, on the basis that the defendant recommended that the claimant should be examined had ‘won’ the case, albeit that the claimant had beaten by a spinal surgeon. On the day that the claimant was the payment into court. The trial judge refused and the seen by the spinal surgeon, she was filmed by a covert defendant appealed to the Court of Appeal (CA). surveillance team instructed by the defendant. David Brown 18 On appeal, the defendant argued that: The spinal surgeon considered that the claimant was n The claimant had exaggerated her claim. Part 44.3(5) defines the conduct of the parties as He also criticised the claimant for failing to try and settle genuine in her presentation and that her symptoms were n Whilst the claimant had beaten the payment into court including: the case: attributable to the accident. However, when he saw the she had only done so by £15,000 – a small amount in 1 Conduct before, as well as during the proceedings, surveillance video, his opinion changed. He said that the the context of the overall claim. and in particular the extent to which the parties It is relevant that Mrs Painting herself made no attempt surveillance footage demonstrated that the claimant had n The claimant had fallen far short of her claim – she had followed any relevant pre-action protocol. to negotiate, made no offer of her own and made no exaggerated her claim and had misled him at examination. only recovered 6%. 2 Whether it was reasonable for a party to raise, pursue response to the offers of the University… Negotiation is n The defendant had succeeded on the issue of or contest a particular allegation or issue. supposed to be a two-way street, and a claimant who The defendant having paid into court the sum of exaggeration. 3 The manner in which a party has pursued or defended makes no attempt to negotiate can expect, and should £200,000 gross of benefits, applied to the court to reduce n The claimant had persisted in exaggerating the claim his case or a particular allegation or issue. expect, the courts to take that into account when making Interpreting product liability insurance the monies in court to £10,000. The court granted the and had she not done so the case would have settled at 4 Whether a claimant who has succeeded in his claim, the appropriate order as to costs. application. an early stage. in whole or in part, exaggerated his claim. n It was impossible to settle the claim because of the This decision follows Islam v Ali [2003] EWCA Civ 612 and The claimant valued her claim in the region of £500,000 – claimant’s exaggeration and failure to make counter- The CA held that in exercising its discretion it must have Malloy v Shell UK Ltd [2001] EWCA Civ 1272. In both of these £400,000 after contributory negligence. However, at no offers. regard to ‘all the circumstances of the case’ and a Part 36 cases, the court carried out an analysis of what the real time did she accept or apply to take out of court either n The order for costs at trial resulted in the defendant payment is merely one of the circumstances to take into issue was between the parties and awarded costs to the Julie-Anne Luck 20 the £200,000 or the £10,000. Neither did she make an having to pay for medical examinations and reports account. There are other factors which should also be taken winner of that issue. offer to settle. where the claimant had been found to have misled the into account, primarily the conduct of the parties. The CA expert. agreed that the disposal hearing had been about one issue: The decision in Painting is to be welcomed and At the disposal hearing, the judge (having heard oral whether or not the claimant had exaggerated her claim. provides strong evidence to suggest that the courts evidence from both the orthopaedic surgeon and the Part 44.3 determines that the award of costs is at the The defendant was therefore the real winner of the trial and will increasingly penalise dishonest claimants. spinal surgeon and having reviewed the surveillance discretion of the court. Part 44.3(4) requires the court to would be awarded the costs of the action from the date of evidence) concluded that to all intents and purposes, the have regard to all the circumstances including: the payment into court. claimant had reached a full recovery by the end of the 1 The conduct of the parties. year 2002. Thereafter, her behaviour amounted to an 2 Whether a party has succeeded on part of his case, Lord Justice Longmore stated that: exaggeration of symptoms. The judge further found that even if he has not been wholly successful. Data protection and freedom of information the claimant had misled the spinal surgeon. He assessed 3 Any payment into court or admissible offer to settle The fact that the exaggeration is intended and fraudulent David Brown her damages at £25,331.78, net of the deduction of 20% made by a party which is drawn to the court’s attention is, to my mind, a very important element which needs to Partner, for contributory negligence. (whether or not made in accordance with Part 36). be addressed in any assessment of costs. BLM London Tim Smith 22 18 DISCLOSURE • JUNE 2005 DISCLOSURE • JUNE 2005 19

Page 18: Specialist misled by exaggerated claim Disciplinary Law Vicki Swanton 24

BLM briefing 26

In addition, as Mr Johnson was not the subject of the that the material did not constitute ‘data’ for the purposes Data protection and documents they were not ‘personal’ in the sense of the DPA. The claim failed on this basis. In addition the necessary to constitute ‘personal data’. Mr Johnson was judge found that the documents held by Lloyd’s and the refused permission to appeal on this point. information contained within them was not ‘personal’ to Mr Smith in the relevant sense as although Mr Smith was The court has also considered the application of the mentioned, this was only because he had acted for and freedom of information DPA to medical records where those records are relevant on behalf of the company and was closely associated with to litigation. it. The documents were not biographical about Mr Smith to a significant extent and therefore the judge indicated The Data Protection Act (DPA) continues to cause difficulties for insurers and their clients. In Matthew Mensah v Dr Robert Jones (19 November 2004) that he would also dismiss the claim on that ground. Many readers will be familiar with the Court of Appeal’s decision in 2003 in Durant v Financial Mr Mensah alleged that the defendant (who had been Services Authority. represented by the Medical Defence Union) had improperly passed a printout of his medical records to the Conclusion solicitor at the MDU having conduct of his case. The As a reminder, Mr Durant was a customer of Barclays means had been provided so that Mr Jones could take Durant provided welcome clarification of the application Bank Plc against whom he had unsuccessfully brought advice as to whether or not the records needed to be of the DPA which will assist many organisations in dealing proceedings. He lodged a complaint with the FSA which disclosed in proceedings that Mr Mensah was bringing with oppressive or vexatious requests under the DPA. was rejected and subsequently sought disclosure under against Dr Jones alleging physical and verbal assault. The cases that have followed have demonstrated that the Section 7 of the DPA of records in connection with the courts are applying Durant in a sensible and pragmatic dispute which he believed might assist him to re-open Mr Mensah alleged that his medical records were way which will undoubtedly be comforting for those on his claim. The Court of Appeal considered two confidential and that by disclosing them Dr Jones had the receiving end of DPA requests. fundamental issues. breached the DPA, the Access to Health Records Act 1990 1 What made data ‘personal’ within the meaning of and the law of confidentiality. ‘personal data’. Freedom of information 2 What was meant by ‘relevant filing system’ in the The judge noted the provisions of section 35(2) of the definition of ‘data’ in the Act. DPA which provides that personal data is exempt from Finally, as many of you will be aware, the Freedom the non-disclosure provisions where the disclosure is of Information Act 2000 (FOIA) came into force on Considering the first issue, the court indicated that the necessary for the purpose of, or in any connection with, 1 January 2005. There is no authority yet in the form mention of somebody in a document did not necessarily any legal proceedings. The judge said that the disclosure of decisions from the Information Commissioner or from Editorial board mean it would amount to their personal data. The court by Dr Roberts in this case was plainly for the purpose of the courts and it is worth noting that it took three years identified these considerations: (and in connection with) legal proceedings. for substantive data protection caselaw to emerge after 1 That the information was biographical. the DPA came into effect. 2 That the information should have the person as its focus The judge felt that the Access to Health Records Act 1990 rather than some other person or event. had no application and could not impose on Dr Jones an The FOIA gives wide ranging powers to individuals and obligation to obtain a court order before sending the organisations to seek information and whilst there are a Catherine Hawkins (guest editor) The court took the view that references to Mr Durant in print-out of the medical records to his solicitor. large number of exemptions (which potentially confuse the documentation were passing (ie non biographical and Durant has subsequently been followed in a number the situation) these will apply only in limited instances. Mr Durant was not the focus) and that they largely of cases. Finally, in relation to confidentiality, the judge noted that The FOIA also makes important changes to the DPA in concerned the conduct of Barclays. the obligation of disclosure could override the obligation relation to public authorities. In particular, the FOIA has In Johnson v Medical Defence Union litigation was of confidentiality. He stated that the law and common amended the definition of data in the DPA so that the Importantly, the second issue concerned the section of commenced following the decision of the MDU not to sense required that a doctor disclose any confidential definition will apply to unstructured paper files held by Jonathan Clay the DPA which determines what paper files (as opposed renew Mr Johnson’s membership. material which may be relevant to his solicitor for advice public authorities (so removing the benefit of the decision to computer records) fall within the DPA regime. The as to the proper course to be taken. in Durant for public authorities). We are already seeing decision is fundamental in determining what paper files Mr Johnson made a request for documents which was large numbers of contentious requests being made under will fall within the terms of the Act. The court considered refused. He argued that documentation which had not Finally, a further case has recently come before Mr Justice the Act (the first ones, naturally, being made on 1 January that the DPA could only sensibly be applied to filing been disclosed to him was his personal data and should Laddie. In Terrence Smith v Lloyd’s TSB Bank Plc Mr Smith 2005!) and will continue to keep you updated in this systems that enabled identification of information with be provided to him under the DPA. The judge had held had been the managing director and controlling developing field. Val Jones the minimum of time and cost. Files or systems without a that the documents did not contain ‘personal data’ shareholder of a company that had gone into liquidation, clear indexing system would not fall within the definition. of Mr Johnson and did not fall within the DPA because causing him to lose his home. There had been a number (following Durant) they: of pieces of litigation between Mr Smith and Lloyd’s and Following Durant the Information Commissioner revised n were in manual form. against this background he made a subject access request his guidance and indicated that the following file types n did not have sophisticated indexing (so were not for material that he said had been withheld from him and would not fall within the terms of the Act: recorded as a ‘relevant filing system’ or ‘data’). which he thought would assist his litigation. On the basis n n Tim Smith Jenny Moates Manual files without detailed subdivisions or indices. did not contain ‘personal’ information which would that the material held by Lloyd’s was held on paper in n Documents purely in chronological order. constitute ‘personal data’. unstructured bundles, the judge (following Durant) found Partner, BLM London

22 DISCLOSURE • JUNE 2005 DISCLOSURE • JUNE 2005 23 Jim Sherwood

Page 22: Crucial update on data protection and freedom Joy Branigan of information Kathy Széputi

Disclaimer: This document does not present a complete or Disclosure is published by Berrymans Lace Mawer comprehensive statement of the law, nor does it constitute (registered office: Salisbury House, London Wall, legal advice. It is intended only to highlight issues that may London EC2M 5QN) and printed in England by be of interest to clients of Berrymans Lace Mawer. Specialist Paterson Printing Ltd. ISSN 1475–4711 legal advice should always be sought in any particular case. Copyright © Berrymans Lace Mawer 2005

DISCLOSURE • JUNE 2005 1 Editorial

The general election, and more importantly, its result, may have a big impact on the legal and insurance world. As government is ready and willing to ‘interfere’ with our world, one can look on a new government with trepidation – often reform is well intended, but somehow, change often doesn’t proceed as smoothly as it might.

The Labour victory will probably mean that the Clementi proposals for the reform of the legal profession will be implemented in some form or other. (The main opposition parties would have ‘junked’ Clementi). This will provide interesting possibilities for insurers, brokers and others involved in the claims world because, subject to safeguards, any organisation will be able to provide a legal service to third parties, provided they adhere to certain rules designed to prevent conflict of interest (and the potential abuse of the service provider’s position) and ensure that such persons are fit in the ethical sense to own or run a legal service provider.

The obvious possibility will be that insurers will be able to own a law firm or allow an in house team to offer services to others than their policyholders – they can already do their own legal work.

Will they want to? Potentially providing a service to anyone other than their own policyholders will expose them to a conflict of interest in markets where a small number of participants dominate ie if an insurer wants to pursue a claim via a firm it owns it may find it insures the third party. On the other hand insurers may feel that they will be able to give other service providers a ‘run for their money’ especially if they wish to take on the claimants’ market and offer their own services. In the meantime, brokers and loss adjusters may try to add a legal service to their overall service.

These are interesting times, and we will have to see how different insurance participants decide to act. We are not afraid of the competition. In fact, we are looking forward to some interesting possibilities.

Catherine Hawkins Partner, BLM London

2 DISCLOSURE • JUNE 2005 Public inquiries – fairness and privilege

Latter-day public flogging, New Labour spin or navel gazing waste of money? Love them or loathe them, public inquiries are in fashion. But when you get caught up in one, who can you turn to? When the involvement of lawyers is frowned upon, who will protect your interests in this quasi-judicial free-for-all? After spending a year working on the Morris Inquiry (into professional standards and employment matters in the Metropolitan Police) the issues have been brought into sharp focus.

Parliament has recognised the perils and public concern data protection to confidentiality, not to mention the surrounding ‘government by inquiry’ and has introduced implications of the Freedom of Information Act 2000, new rules of engagement for those inquiries set up by require continuous consideration. ministers. While the stated aim is to improve public confidence in the process, inquiries will continue to exert Balancing the public interest in full co-operation with immense pressure and demands on the organisation and protecting an organisation and its individuals, whilst individuals under investigation. also juggling possible insurance obligations, makes legal advice on formulating a response to an inquiry a Preparing evidence which will assist an inquiry panel necessity. In Three Rivers DC v Bank of England (No.6) in reaching a fully informed conclusion, while at the (11 November 2004) the House of Lords considered the same time safeguarding confidential information and extent to which communications with lawyers in such protecting the reputation of individuals, is a delicate circumstances should be immune from subsequent operation. The marshalling of evidence and witnesses disclosure. Before considering the implications of that may raise the possibility of inadvertent admissions of decision, this article will briefly review the current regime failings and disclosure of sensitive documents. Issues for inquiries, both statutory and ad hoc. of legal professional privilege and public interest immunity must be addressed swiftly, not least in an age where transcripts and documents appear daily on inquiry Statutory inquiries websites. Statutory and common law liabilities, from Inquiry procedure and the potential liabilities of those involved have been comprehensively reviewed over the past year. The government's agenda has been driven by the need to address public outcry following high profile inquiries and resulted in a review of the inquiries culture within government and the introduction of the Inquiries Act, passed on 7 April 2005. The Act, which followed a period of consultation by the Department of Constitutional Affairs, is intended to provide a statutory framework for inquiries instigated by ministers into events which have caused, or have the potential to cause, public concern.

It is not intended that every future inquiry will be conducted under the Act – the vast number of inquiries which operate on a non-statutory basis (for example in the local authority or health fields) will be unaffected – see below. The purpose of the Act is to draw together and © EMPICS replace existing legislation on inquiries, including the

DISCLOSURE • JUNE 2005 3 Tribunals of Inquiry (Evidence) Act 1921 and the large present the legal pitfalls highlighted by last year’s Law number of more recent subject-specific legislation which Commission Report In the Public Interest: Publication of in practice has been used more frequently than the 1921 Local Authority Inquiry Reports (2004) LawCom No. 289. Act. For example, this includes legislation that gave rise The report considered the balance to be achieved between to the Victoria Climbie Inquiry, the Stephen Lawrence investigating and publicising issues of concern in the Inquiry and the Bristol Royal Infirmary Inquiry. public interest while at the same time addressing the rights of individuals and an authority's insurance obligations. While the legislation aims to protect procedural flexibility, a degree of certainty will be welcome. The demands and Such ad hoc inquiries tend to address issues arising stress imposed on individuals can be exacerbated by from the delivery of local services whether health, social unpredictable and sometimes capricious inquiry teams services or education. Inevitably while the investigation and may not be assisted by the apparent informality of may seek to avoid laying blame or identifying failings, the inquiry process operating in a politically charged and a proper scrutiny of the facts may expose liabilities. emotive environment. Perceptions rather than empirical Alternatively an authority may justifiably seek to address evidence may hold sway. The need for access to legal public concern by acknowledging errors, thus potentially advice becomes critical. exposing its insurers to claims. The publication of the inquiry report itself may result in claims in defamation, For example, inquiry procedure has previously been as in Lillie and Another v Newcastle City Council [2002] underpinned by the so called Salmon principles, taken EWHC 1600 (QB). The Law Commission Report from the Report of the Royal Commission on Tribunals recommends that statutory qualified privilege should of Inquiry 1966 (Cmnd.3121) chaired by Lord Justice attach to local authority inquiry reports, subject to the Salmon, which provide guidance as to how those report (and inquiry) satisfying requirements of procedural involved should receive fair treatment. It is agreed the fairness. Whether such a test could realistically be applied time has come to review those principles and to re- is highly debatable and insurers’ concerns must remain. evaluate how to ensure fairness within the inquisitorial process whilst minimising the adversarial, legalistic Insurers may find themselves open to the perception element of inquiries. Principles of good inquiry practice that they act unreasonably in reminding a local authority will be set out in a statutory instrument and are intended of its potential legal vulnerabilities – the suggestion to provide clear criteria for assessing (and, if necessary, being that an authority is gagged and prevented from challenging) practice adopted by an inquiry. fulfilling its duty to the public. While this issue has been the subject of discussion between representatives of The new regime addresses the need for consultation in insurers, including the ABI, and local government bodies appointing the inquiry panel and setting the terms of (and draft guidelines are in place), the failure of the reference, often critical issues in setting the ground rules Inquiries Act to address the issue appears an opportunity and tone for an inquiry. There will be a presumption in missed. The Law Commission report currently sits on a favour of public access to proceedings while inquiry desk in the office of the Deputy Prime Minister. chairmen will be able to require witnesses to attend and to produce documents under their control – it will be a criminal offence not to comply. The inquiry panel will Three Rivers be immune from any civil action for anything done or said in the course of carrying out their duty to the In an atmosphere of continuing uncertainty, the need inquiry, while the Act requires a report to be published for an organisation to seek legal advice in confidence is and laid before parliament. paramount. This was addressed by the House of Lords in Three Rivers, a piece of satellite litigation emanating from the attempt by the liquidators of BCCI to prove that the Ad hoc inquiries Bank of England was guilty of misfeasance in public office in the exercise of its regulatory powers prior to the While those involved in non-statutory or ad hoc inquiries collapse of BCCI in 1991. Shortly after the collapse, the will no doubt refer to the new legislation for guidance, government ordered an investigation into the bank’s not least in respect of the revised principles governing supervision of BCCI – the Bingham Inquiry. fairness in procedure, they will not be bound by it. As before, local authorities may also rely on guidance on The bank set up its own internal unit, the Bingham Inquiry procedure published by the Society of Local Authority Unit (BIU) to deal with communications between the bank Chief Executives and Senior Managers. Operating within and the inquiry. In turn, the BIU engaged external an informal procedural framework will continue to solicitors and counsel to advise on all dealings with the

4 DISCLOSURE • JUNE 2005 inquiry generally, and in particular upon the preparation body whose reputation was at stake or which might be and presentation to the inquiry of evidence and criticised. While their Lordships were not asked to clarify submissions on the bank’s behalf (presentational advice). the basis of the client relationship, the judgment was greeted with a collective sigh of relief by the legal In due course the claimants in the BCCI litigation sought profession. It also meant that when drafting the Inquiries disclosure of all the documents generated by this process, Act, there was no need to consider the issue of shielding which the bank resisted, arguing that the material was legal advice. protected not by ‘litigation privilege’ (because the inquiry was not adversarial in nature) but by ‘legal advice In the current climate of ‘the public has a right to know’ privilege’ – the wider privilege which attaches to dealings it is interesting to note that the law lords clearly thought between solicitors and their clients regardless of whether that confidentiality should not be too readily sacrificed on litigation is contemplated. the altar of ‘getting at the truth’. Lord Carswell quoted a 19th century judge who wrote: The Court of Appeal was unimpressed by the very concept of ‘legal advice privilege’ and so sought to Truth, like all other good things, may be loved unwisely restrict it to advice about a client's actual legal rights and – may be pursued too keenly – may cost too much. liabilities. On that basis ‘presentational advice’ did not qualify and so the material was not privileged. This ruling caused much consternation among lawyers and clients Jim Sherwood was instructed to act for the Commissioner alike as it was possible that communications between of Police of the Metropolis in the Morris Inquiry into lawyers and their clients in relation to the inquiries would professional standards and employment matters in the become disclosable. Metropolitan Police Service.

On appeal, the House of Lords held that the Court of Mike Brown at BLM Liverpool is instructed by the Medical Appeal's approach was far too restrictive and reversed Protection Society to act on behalf of a doctor involved in the decision. Their Lordships robustly argued that, in any the ongoing inquiry into the death of Zahid Mubarek in society based upon belief in the rule of law, clients need Feltham Young Offenders’ Institution and also acted for a to be able to turn to their lawyers for help and advice on doctor at the Ashworth Inquiry. a totally confidential basis, without fear of subsequent scrutiny by the executive or the police or anybody else, and that this principle extended to anything done by a solicitor in the performance of his professional duty as adviser, provided that it was done ‘in a legal context’.

This plainly included ‘presentational advice’ in the context Jim Sherwood of any inquiry (statutory or ad hoc) involving a public Partner, BLM London

DISCLOSURE • JUNE 2005 5 Pleural plaques – anxious times ahead

John Grieves & Others v F T Everard & Sons and British Uralite Plc [2005] EWHC 88 [QB].

There will have been a mixed reaction to the long-awaited judgment of Mr Justice Holland in the so-called test litigation which he handed down on 15 February 2005.

The background The issues

Pleural plaques consist of fibrous tissue on the pleura. Holland J heard ten cases. Liability had been admitted in They very rarely give rise to symptoms and do not in one and in the other nine negligent exposure to asbestos themselves lead to development of other asbestos-induced dust was admitted. In the nine cases the defendants conditions namely asbestosis, pleural thickening, argued that no claimant had suffered an injury sufficient mesothelioma and lung cancer. to found a claim in negligence and in all ten cases the argument was that the present level of damages was Plaques are a benign marker of past exposure to asbestos far too high. and are in the main symptomless, divisible and (in financial terms) costly to insurers with many claimants preferring to Both sides accepted that pleural plaques per se could not settle their claims on a full and final basis at around £15,000. amount to sufficient ‘damage’ along with breach of duty to found the claim in negligence. Historically insurers and self-insureds alike have been powerless to prevent a steady rise in the number of claims The claimants argued that pleural plaques should not involving full and final settlements against a background be considered in isolation but together with the risks of of a ‘compensation culture’ fuelled by claims farmers and the future development of a more serious asbestos-related scan vans. Insurers have had no real say in a claimant’s condition (due to exposure to asbestos fibres) and a decision to elect for a full and final award rather than a significant level of past and continuing anxiety caused provisional damages settlement. Some commentators have by knowledge of these risks. gone so far as to blame insurers for influencing the upward trend for full and final settlement by buying off The defendant’s case was that damage is only established the future risks at a premium in order to gain closure. as and when there are symptoms and that the future risks are not based on the presence of pleural plaques but Within the last few years there has been a realisation on the earlier asbestos exposure and anxiety brought about by part of the insurers that in reality few pleural plaques fear of future risks. Therefore the case cannot (as a matter claimants do go on to develop a more serious condition as of law) be compensable and cannot contribute to damage of course, by their nature, plaques do not develop into a so as to found an action. The argument was put that more sinister condition. nought + nought + nought is still nought.

Having managed to resolve the problem of reserving for provisional damages claims and facing more claims, Findings insurers have increasingly preferred claimants to settle on a provisional basis. Mr Justice Holland made several key findings in relation to the central liability issue: The full and final award carries with it the dual risks of ■ The mere permanent penetration of the body by asbestos under-compensation to the claimant who is unfortunate was not sufficient to give rise to a cause of action. enough to develop a more serious condition and ■ That pleural plaques could not be forensically classified over-compensation by the insurer to the majority who as a disease, nor in isolation be regarded as an injury never go on to fulfil the predicated risks. such as to found a cause of action.

6 DISCLOSURE • JUNE 2005 ■ The combination of the physical presence of the he sought to lay down a guideline bracket of £3,500 – plaques coupled with the anxiety generated by the £4,000. The judge felt he could justify an increase to potential future risks of more serious harm was £3,500 without hesitation (from a figure of £2,500 based sufficient to complete the cause of action. Being more on Patterson) respecting submissions and raising than de minimis, he was bound by Cartledge v E Jopling awareness of the possible long-term onset of asbestos- (1963) AC758 to find liability. related conditions during the period which has elapsed since 1986. With hesitation he felt able to go to £4,000 The judge also commented that it would probably be but not higher. against public policy now to refuse damages for pleural plaques when such damages have been routinely paid, To the extent that there is such a bracket, the judge fixed unchallenged, for about 20 years (since Church, Sykes all the provisional awards at the upper end ‘in the and Patterson). particular circumstances of this litigation’.

The bracket for general damages for a final award was Quantum £6,000 – £7,000 on the basis of future risk levels in the cases before him. There was some solace for the defendants in quantum. Further, in relation to future financial loss pursuant to the Having reviewed the authorities and the JSB Guidelines, future onset of an asbestos-related condition, the judge Mr Justice Holland accepted the thrust of the defendants’ found this to be an area where moderation is at a premium. submissions as to quantum – namely that awards had Any calculation has to reflect speculation as to what might crept up unjustifiably over the years. result in financial terms and is in turn based on speculation as to what condition may occur and when – given that the In contrast to the perceived current bracket for provisional probabilities are that no such condition will occur. A 5% risk awards of £5,000 – £7,000 the judge awarded claimants of mesothelioma occurring comes with it a 95% risk of it seeking a provisional award £4,000. It is unclear whether not occurring.

DISCLOSURE • JUNE 2005 7 Interestingly, the judge was not prepared to undertake what he described as the essentially undesirable task of measuring anxiety. For example, in the case of the claimant David Mears in which a high level of anxiety was contended for (as opposed to a depressive illness) he was not prepared to depart from his provisional figure of £4,000.

Comment

It is understood that Mr Hindson has appealed on quantum and that some of the defendants are appealing on liability. Those defendants are also seeking leave to appeal on quantum and if granted the claimant’s will cross-appeal.

At face value the judgment holds an attraction for all; the preservation of a valid cause of action for claimants and lower damages for the insurers.

The reduction in the differential between the brackets for provisional and full and final awards will most probably result in fewer full and final settlements so minimising the effect of the over/under compensation debate. Arguably Mr Justice Holland’s judgment has resulted in the status quo being maintained albeit at a much reduced cost to the insurance industry. Mr Justice Holland felt that any increase over the provisional award would prove to be excessive in most It was probably always going to be difficult for the cases and commented that the less the increase the more defendants to avoid liability in view of the policy the pressure on claimants to heed responsible legal advice considerations for the following reasons: and to opt for a provisional award. ■ 20 years of defendants accepting the right for claimants to claim compensation in such cases. In rejecting the claims for prospective financial loss, ■ The view of the man in the street that pleural plaques Holland J felt that the carefully crafted schedules of loss is a significant injury. were based upon no more than speculation of what the financial result may be and, which in turn, was predicated At least the judge has reined in the damages which, upon speculation of what physical condition may occur. particularly in relation to traditional awards, were Speculation was insufficient to justify a claim which ought escalating out of all proportion to the seriousness of the properly to be based upon a substantial or real risk. The so-called injury and has tried to almost force claimants judge did not give an indication of what percentage risk to opt for provisional awards. would be considered real or substantial. Clearly the risks need to be significantly higher than the present claimants’ risks and in those cases the risks relating to Mr Hindson were the greatest: ■ 2% risk of diffuse pleural thickening sufficient to cause disablement through breathlessness. ■ A similar risk of asbestosis. ■ 5% risk of mesothelioma. ■ An enhanced risk (from 10% to 25%) of the future development of lung cancer.

Mr Hindson was seeking just over £25,000 in addition John Harland to general damages of £17,500. He was awarded £7,000 Partner, in total. BLM Stockton-on-Tees

8 DISCLOSURE • JUNE 2005 Stress: rising pressure, rising claims

The most recent TUC statistics (November 2004) suggest that 58% of employees feel stressed at work, 63% in companies with over 1000 employees. The HSE indicate that some 500,000 people in the UK are suffering work-related stress at a level which they consider is making them ill. Up to five million people say that they feel very or extremely stressed by their work. Stress claims remain an area of growth in spite of the obstacles placed in claimants’ way by the courts.

There have been a number of significant developments injury at work. It is a foreseeable injury flowing from over the last 12 months in relation to stress litigation. the employer’s breach of duty that gives rise to liability. The fact that an employee is stressed at work and the We have seen further comment from the House of Lords employer is in breach of duty in some respect does not in the Eastwood & Williams v Magnox Electric plc (2004), necessarily mean that a case is established in negligence. McCabe v Cornwall County Council (2004) and Barber v The court did not see any inconsistency of approach Somerset County Council (2004) decisions and from the between the principles laid down by Hale LJ in Hatton Court of Appeal (CA) in the Hartman v South Essex Mental and the judgment of Stanwick J, in Stokes v Guest, Keen Health and Community Care NHS Trust (2005) cases. and Nettlefold (Bolts and Nuts) Ltd (1968) which had been endorsed by the House of Lords in Barber v Somerset We have also had the introduction of management County Council (2004). In their view, Hale LJ was applying standards by the HSE aimed at controlling the incidence established principles to a new problem not creating of stress in the workplace. new principles although they did accept the need to take care in applying Hatton to the many varied factual The latest word from the higher courts, however, is circumstances that may occur. unlikely to be the last. Notwithstanding the guidance from the CA in Hatton v Sutherland (2002), it is still The judgment also expresses concern over the evident from Hartman that judges are getting it wrong disproportionate costs being incurred on these cases and and that the CA agree. encourages parties to identify the real issues and ensure that expenditure on costs is truly proportionate to what is at stake. This is a particular feature of stress claims; parties Hartman v South Essex Mental Health and can become bogged down in minutiae and sidetracked by Community Care NHS Trust what ultimately proves to be irrelevant detail or a dispute over minor matters. However, given the difficulties to date The CA gave its judgment on 19 January 2005 on six of this type of claim and the fact that the courts have not appeals involving claims for damages for psychiatric been consistent in the application of Hatton, it is likely to injury arising out of stress at work. There were other be some time before the confidence exists to abandon cases in the pipeline. lines of enquiry or assume facts to be trivial or irrelevant.

The six appeals illustrate the ranges of cases coming One of the cases in Hartman, Moore v Welwyn Components before the courts: overwork, specific incidents, bullying, Ltd concerned apportionment. This remains an issue for apportionment of damages. This is consistent with recent the defendants to raise. In that case the judge at first statistics from the TUC, which suggest that the main instance had taken account in assessing the general reasons for stress at work are increased workload, change, damage award that there were other contributing causes staff cuts, long hours and bullying. but did not reduce the special damages, which were almost £150,000. The CA agreed with his decision. There In Hartman the CA reiterated the general principles that was no medical evidence to support an argument that the stress at work claims are no different to other claims for claimant would have lost earnings in the relevant period

DISCLOSURE • JUNE 2005 9 due to other causes. Whilst this claimant had had opportunity to claim being the ET. The decision of the problems in the past he had always managed to return House of Lords has resolved some of the uncertainty for to work. This emphasises the need to ensure that these claimants but not all the controversy about this area. issues are dealt with in the written expert evidence and at trial. These two appeals concerned an alleged breach of the implied term of mutual trust and confidence and the It is also interesting to note that of the claimants in this decision of the House of Lords in Johnson v Unisys (2001) group of cases who were successful, Wheeldon, was a stated it did not apply to the manner of a dismissal. The part time worker. main reason why the Lords had declined to extend the law was that issues relating to dismissal were covered by the employment legislation and were to be dealt Eastwood and Williams v Magnox Electric with in the ET. plc (2004); McCabe v Cornwall County Council (2004) Both cases concerned the boundary between what would be caught by Johnson and what would not. Up until the Eastwood case there had been controversy The House of Lords held that, where the losses flow about the impact of the Johnson v Unysis case which from conduct which precedes the dismissal, the cause prevented any claim for damages in the civil courts where of action is independent of any claim to the ET for unfair the claimant had also been unfairly dismissed and that the dismissal. The courts will need to draw a distinction ill health was due to this. This was on the basis that the between losses that flow from the dismissal and losses proper venue for such claims was the Employment that flow from antecedent conduct. Lord Nicholls Tribunal (ET). This was not withstanding the fact that recognised that the practical consequences of this damages for personal injuries cannot be awarded by the boundary may not be straightforward. ET in such circumstances. The Eastwood decision in the CA arguably widened the scope of Johnson with the effect The House of Lords effectively confined the effects of that more claimants would potentially find their only Johnson to the actual act of dismissal itself. It is surprising,

10 DISCLOSURE • JUNE 2005 however, that given that in Eastwood the main issue for part of evidence considered in future stress cases. These, the parties was essentially what is meant by the phrase together with the changes to the Management of Health ‘manner of dismissal’ in Johnson, there is no discussion and Safety at Work Regulations (which mean that a failure of this and we are left to infer that this must mean the to carry out a risk assessment) can lead to civil liability, act of dismissal itself. open up avenues for claimants to pursue.

Inevitably, in many cases the dividing line between the causative effect of the events leading up to a dismissal Conclusion and the effects of the actual dismissal itself will not be easy to discern. Stress claims will remain an area of developing law. A distinction needs to be drawn between the effects of Whilst Eastwood and McCabe have provided some stress in its widest sense, which the HSE aims to combat, certainty on jurisdiction issues in what was becoming and a psychiatric injury in respect of which a claim can be an ever increasingly difficult area, the practical effects brought. It should not be assumed that simply because for insurers, employers and those advising them remain the activity of the HSE has raised awareness of stress in the difficult and jurisdiction still needs to be considered. workplace that the foreseeability hurdle for employees Proceedings in the ET remain relevant to stress cases and should be easier, or assumed to have been established, if insurers should be involved in the claims at that stage the employer has failed in implementing the management rather than await the outcome and notification of any standards. The 16 guidelines set out in Hatton will remain civil claim. Issues of estoppel in relation to evidence may the correct approach. It is inevitable that there will be arise, depending upon the circumstances. some conflict between the expectation of the HSE of how an employer should act and how he may act and not The unsatisfactory state of the law in this area was attract liability according to Hatton. Whilst agreeing with a source of concern for the Lords. They urged the the encouragement of the CA in Hartman to try and bring government to act. It is difficult to see how intervention some proportionality to these cases in terms of the costs by the government to, for example, increase the limit being incurred, employers and their insurers should for cases in the ET would ease matters. Damages for remember that stress claims will remain an area where it personal injury are excluded from claims in the ET. Steyn is easier for an employee, deliberately or otherwise, to LJ, who remained of the view that Johnson was incorrectly incorrectly attribute ill health to work. These claims still decided, went so far as to set out in some detail the areas require careful investigation. where Johnson could be attacked almost inviting the matter to be brought back before the courts. The future

Management standards for work-related stress A writer in The Times (November 2004) had an interesting comment – that one person’s stimulation is In November 2004 the HSE published its management another person’s pressure and how one person may be standards and guidelines on work-related stress and the off work sick blaming it on pressure whilst another HSE’s message in relation to stress is that it is a serious person thrives on the challenge. The writer suggested problem but that tackling it can have significant benefits that perhaps employers should be able to counterclaim for companies. The management standards reflect the risk for the employee lacking joie de vivre or simply failing factors that the HSE have identified as being significant in to take enough interest. relation to stress: demands; control; relationships; change; role; support. A detailed review of these standards is beyond the scope of this article and the standards will take time for employers to digest and implement. There appears to be a great emphasis on the subjective views of employees. Employers will need to take care in their information gathering to see that it is recorded objectively and that a balanced picture is obtained rather than the views of a minority who may be exerting influence. The onus on employers to seek out information arguably goes beyond what is envisaged in the guidelines laid out in Hatton by Hale LJ. The employer’s performance in the Vivienne Williams implementation of these standards will inevitably form Partner, BLM Manchester

DISCLOSURE • JUNE 2005 11 Education – stale claims and lost opportunity

Despite the landmark House of Lords decision provisions of Section 11, Section 14 and Section 33 of the in Phelps v London Borough of Hillingdon (HL Limitation Act 1980. 27 July 2000), so called ‘failure to educate’ Their Lordships agreed that the earlier Court of Appeal claims have remained difficult to prove and (CA) decision in Robinson v St Helens Metropolitan BC win. Two recent court decisions highlight the (2003) PIQR P128 had been rightly decided. A negligent difficulties for prospective claimants. failure to ameliorate the consequences of dyslexia by appropriate teaching may be said to constitute an injury. They believed that it was too fine a distinction to say that In David Adams v Bracknell Forest Borough Council the neglect had caused no injury because nothing could (HL 17 June 2004), the House of Lords was concerned be done to repair the congenital damage in the brain, or with the thorny issue of limitation. The claimant was to argue that the other parts of the brain which would educated by the defendant between 1977 and 1988. He have to be trained to compensate had never been injured. issued proceedings when he was aged 30 in June 2002. The claimant suffered from dyslexia. The distinctive The majority of their Lordships also concluded that whilst features of this condition are a combination of average to his dyslexia might have inhibited the claimant from good general mental ability with severe and long term seeking advice, he ought reasonably to have sought difficulties in reading, writing and spelling. It is not expert advice years ago. In the absence of evidence that curable but in some cases suitable teaching can his injury prevented him from seeking expert opinion ameliorate its effects. about its cause, it could not be assumed that any such difficulty existed. Their Lordships therefore concluded that Mr Adams’ dyslexia was not formally diagnosed until the relevant date of knowledge for the purposes of November 1999. Prior to that he had known that he had considering limitation accrued well before the three years suffered from some psychological affect linked to his poor prior to the issue of the summons. The defendant’s appeal reading and writing skills. was allowed and the action dismissed. This case is of particular interest to insurers and local education The claimant argued that for the purpose of limitation his authorities because of the strong policy stance taken date of knowledge was November 1999. He relied on the against stale claims – a particular feature of these decision in Phelps that a failure to ameliorate a congenital education claims. It also reaffirms the personal injury condition can constitute a personal injury and that a three classification for this type of claim. year limitation period applied subject, of course, to the In DN (by his father and litigation friend RN) v London Borough of Greenwich (CA 8 December 2004), the CA was concerned with a first instance decision of Judge Overend concerning an adverse finding on liability and causation against the defendant local education authority. The claimant was assessed and found to have special educational needs at the age of 5. At 10 the defendant’s educational psychologist prepared a report and in consequence the claimant was educated at a school for children with educational behavioural difficulties. It was not until the age of 12 that he was diagnosed as suffering from Asperger’s Syndrome (this syndrome is characterised by the kind of abnormalities of reciprocal social interaction that typify autism coupled with a restricted, stereotyped, repetitive reservoir of

12 DISCLOSURE • JUNE 2005 interests and activities. Its primary difference from autism component of his damages. Some reference was made is that there is no general retardation in language or to the Phelps decision and the award for loss of earnings cognitive development). in that case. The CA suggested a figure nearer £15,000 would be appropriate in this case. In puberty the claimant developed a preoccupation with 3 The claimant was unable to recover the damages young girls and fire setting. He was convicted of arson for the consequences of his convictions for arson. and was made the subject of a restriction order under the Clunis v Camden & Islington (1998) QB978 applied. Mental Health Act 1983. 4 The court was especially critical of the case management of this case which had led to the joint statement of the The trial was unusual in that the defendant education psychiatrists being produced on day one of the trial and authority did not call any independent expert educational the defendant’s educational psychologist not being psychology evidence and instead relied on the evidence of given the opportunity to counter late served expert the two educational psychologists involved in the material from the claimant. In particular the court said claimant’s original assessment. that in future education negligence claims any order for expert evidence should require the expert to identify the The trial judge found that the educational psychologist learned articles, text book entries and research studies (Mr Moreland) had been negligent in failing to identify the relied on (as is commonly done in clinical negligence claimant’s complex social and communication needs – such claims). The senior procedure master was to consider needs not being appropriately catered for at the school to standard directions in these cases. The court also which he was sent. On causation the judge held that the emphasised that expert witnesses must not be permitted failure to send the claimant to an appropriate school to depart substantially from their written report unless resulted in a loss of opportunity for the defendant to learn the trial judge was satisfied that there would be no how to improve his social and communication skills, to injustice to the parties. Furthermore, the trial judge manage his behavioural difficulties and to gain an end should not (without good reason) adopt a differential qualification. He ordered damages to be assessed on that approach towards evidence from different categories of basis. The local educational authority appealed. witness (ie expert and lay witnesses) as was done by the trial judge in this case. In the CA, the appeal on liability was dismissed. The appeal on causation was allowed and the case was Undoubtedly, the defendants were hindered at trial by remitted for the judge to assess damages on the basis of the decision not to call their own, fresh expert evidence. their findings on causation. The key findings were: The case does still demonstrate the considerable 1 The evidence of the defendant’s psychologist was evidential hurdles which claimants need to overcome admissible. The fact that such an expert might lack the where they are suffering from a complex behavioural objectivity of an independent expert went to the issue emotional and learning problem (a common feature in of cogency not admissibility. Whilst critical of the these claims). The defendants must always focus on judge’s approach, the court believed that what would have been the outcome but for the alleged he had balanced the testimony of the claimant’s expert professional negligence or alternative teaching options, against the defendant’s educational psychologist which it is maintained should have been provided in (despite not expressly doing so in his judgment) and the first place. Often the teaching regime suggested by that it would be wrong to order a re-trial on this basis. the claimant would have made no material difference 2 On causation, the trial judge had overstated the effect to the outcome in any event. of the expert psychiatric evidence and had been wrong to find that the defendant’s negligence had caused the It is also encouraging to see the courts starting to treat claimant to lose the opportunity to learn how to these claims with the specific procedural interest that they improve his social skills etc. The judge should have deserve and which has until now been reserved to other approached the question by considering, on the specialised claims. balance of probabilities, what would have been the likely outcome if the claimant had gone to an appropriate school. The claimant had at all material times been severely damaged (independent of his Asperger’s Syndrome) and all the experts could say on the balance of probabilities was that the outcome would have been better or different if his education had been different. The court held that the claimant could Jeff Wale only justify a small award for the loss of earnings Partner, BLM Southampton

DISCLOSURE • JUNE 2005 13 Council cleared of corporate manslaughter

Legionella case doubts whether local authorities can ever be liable

Barrow Borough Council has been acquitted of seven counts of manslaughter following the deaths of users of its leisure facilities. In dismissing the charges, Poole J, sitting at Preston Crown Court agreed that there was no case for the council to answer. Although seven people contracted legionella, the ruling brings into question whether Barrow Council or any other public body constituted in that way could ever be convicted of this offence as the law stands.

For a company or local authority to be guilty of The decision brings into question whether a local authority corporate manslaughter, the court first needs to identify constituted in this way could ever face the stigma of being someone as a ‘controlling mind’ and that such a person convicted of corporate manslaughter under the law as it was himself guilty of gross negligence manslaughter. currently stands. While this may seem like a good thing, in This ‘identification principle’ can often be difficult to reality the consequences to the council itself are of little achieve and has lead to the dismissal of several high difference whether their conviction is for manslaughter or profile prosecutions even where the level of negligence for existing health and safety offences under the Health within a company has been substantial. The court and Safety at Work Act 1974. alleged that a Ms Beckingham, employed as the design services manager, was so high up in the council’s In practical terms most fatal accident cases will be referred structure that she was effectively, for these purposes, the to the Crown Court where a corporate body may be fined council itself. It said she was guilty and that her acts an unlimited amount anyway. A council cannot be were so closely identifiable with those of the council that imprisoned nor can its senior members or employees just she effectively ran what it did and the way in which it did for holding an office when things go wrong. Many local so. The court disagreed. authorities are fined less than companies would be because the effect of any penalty is felt ultimately only by members Mark Turner QC, defending the council, looked at the of the public who pay their council tax and who use council way in which a local authority is created, its functions facilities and services, rather than by individual officers or and the purposes for which it exists. Firstly, the elected politicians whose conduct may have been negligent in any members of council and its various committees by law given case. Barrow Council will be sentenced for health and have the statutory authority to make decisions on its safety offences after the case against its employee, the behalf. The council alone through its local councillors design services manager, is concluded. and committees had the power to tell employees what to do and how to do it, or to overrule heads of department This is different to large corporate entities where the fine such as Ms Beckingham. should be large enough to send out a message not only to the board but also the directors that health and safety Due to the wide ranging nature of a local authority’s breaches will not be tolerated. powers and responsibilities, the council argued that no one person, even its chief executive or council leader, At the time of writing, the Hatfield rail crash prosecution could ever be said to ‘run’ the council. It was able to against a number of senior officers of Railtrack and Balfour discharge its functions by delegating tasks to employees Beatty is ongoing. If these manslaughter prosecutions but this did not transfer the final say to such people. are successful, the definition of the ‘controlling mind’ Even with a high level of discretion being given to such might be held to vary depending on the individual employees, the staff did not personally become the circumstances and the facts of a particular case. This council’s ‘controlling mind’. will mean that the prosecution might soon be able to

14 DISCLOSURE • JUNE 2005 widen its search to identify a ‘controlling mind’ beyond elected members under the new reforms. The final wording directors and down the corporate chain to senior of the legislation may be modified from that proposed and managers in a company if they are personally suspected stakeholders comments on the draft are sought. of manslaughter.

Local authorities need to be aware that they could be held liable under proposed changes to corporate killing laws which are currently undergoing consultation. If enacted as drafted, the need to identify one ‘controlling mind’ who Chris Green is guilty would be removed. Chief executives might be Partner, personally liable although it will be more difficult to convict BLM Manchester

DISCLOSURE • JUNE 2005 15 To catch a thief

Fraud is a word that we see all too frequently these days and an activity which we hear is on the rise. But although we use the word so readily, do we really understand what constitutes the offence of fraud? What of the government’s proposals to reform the law of fraud – are these proposals going to help us to understand this area of law? More importantly, are they going to help prosecutors to secure more convictions and reduce the number of failed trials?

Current position Common law offence (conspiracy to defraud)

Perhaps the root of the problem is the dual existence of: In contrast to the statutory offences, the offence ■ Statutory offences of deception under the Theft Acts. of conspiracy to defraud is defined very widely. ■ Offence of conspiracy to defraud under common law. A ‘conspiracy’ occurs when two or more people agree a plan of action. If they conspire to defraud then they are guilty of the common law offence. Statutory offences A dishonest agreement to make a gain at another’s In addition to the general offence of theft, there are eight expense could amount to a conspiracy to defraud. statutory offences of deception which fraudsters can be An honest agreement on the other hand is simply sharp charged with. business practice. At what point does a legitimate money- making plan become a dishonest plot to defraud? The statutory offences are very specific. For example: obtaining a money transfer by deception; or obtaining This is a question for the jury to determine. Firstly they an exemption from a liability to make a payment. must decide whether the conspirators knew that their plan was dishonest according to the ordinary standard of The specific nature of the statutory offences creates reasonable and honest people. Secondly the jury must be difficulties for prosecutors because they can be a breeding satisfied that the conspirators knew that the plan was ground for technical arguments by clever defence lawyers; dishonest according to those standards. usually following the lines that the facts of the case do not fall within the strictly defined boundaries of the offence. This places a huge burden on jury members who have to decide what conduct is to be regarded as fraudulent and To guard against this, prosecutors often choose to take a it makes it difficult for the CPS to predict the jury’s verdict ‘belt and braces’ approach by charging the fraudster with with any confidence. a number of offences. This is the reason we hear of those lengthy and complex fraud cases which are so vulnerable to collapse. Home Office proposal: a single offence of fraud

A further problem caused by the precise nature of the In May 2004 the Home Office published a consultation statutory offences is their inflexibility. This means that paper in which it recognised the shortcomings in the the law can struggle to keep pace with the ingenuity current state of the criminal law of fraud. Rather than of the fraudster and the pace of technology – making continue to ‘plug the gaps’ and develop the law in a the prosecutor’s job even harder. This was a problem piecemeal way, the Home Office announced that it would identified as early as 1759, when Lord Hardwicke overhaul the entire law by introducing a single offence of recognised that the fertility of man’s invention will always fraud to replace the statutory offences of deception and find ways to escape a tightly drawn law. the conspiracy offence.

16 DISCLOSURE • JUNE 2005 It is proposed that the new single offence will be Comment committed in three ways by: 1 Making a false representation. The failure to disclose information to a third party where 2 Failing to disclose information. there is no legal duty to do so contradicts the maxim: 3 Secretly abusing a position of trust. caveat emptor (or ‘buyer beware’) and is likely to be a source of further debate in the courts. For example, as it In each of the cases in point above, the relevant stands, an unscrupulous antiques dealer could be caught behaviour must be: by this offence if he fails to advise the uninformed vendor ■ Dishonest. that a particular item is far from worthless. ■ Intended to secure either a gain for the fraudster or a loss, or risk of a loss, to another (although, the intended 3 Fraud by abuse of position gain or loss does not actually have to occur). This offence will be committed where a fraudster is put into a privileged position in which he is expected to 1 Fraud by false representation safeguard the victim’s interest and when the fraudster: A person will be guilty of this offence if he makes an ■ Dishonestly abuses that position without the assertion by words or conduct: knowledge of the victim. ■ Knowing that it is wrong. ■ Believed that the victim was unaware of the fraud. ■ Being aware that it might be. It will not be necessary for the victim of the representation to actually believe the misrepresentation as is currently Comment required under the statutory dishonesty offences, nor will it be necessary for the victim to have relied upon The employee who secretly fails to pitch for a contract the false representation. to enable an associate to secure the work would be caught by this offence. Other examples of relationships which could give rise to a fraudulent abuse of position Comment are: professional and client; director and company; and between partners in a partnership. Where a fraudster uses a stolen credit card to make a purchase, he is implying to the shop assistant that he has authority to use it, when this is not the case. The shop Conclusion assistant may not necessarily be interested in whether the defendant has authority to use the card, only that the There has been widespread publicity of the collapse of payment clears, so it would be incorrect to say the assistant serious fraud trials. It is hoped that the introduction of the had been deceived as they may not even have considered the general offence of fraud will make the prosecution process issue. This is an example where fraud by false representation increasingly effective by defining fraud more clearly. would be more appropriate than an offence of deception. If the law can be simplified and made user-friendly, this 2 Fraud by wrongfully failing to disclose information should give prosecuting authorities greater confidence in The question of whether an omission causes a deception their ability to apply the law, which in turn should is one which the Home Office considered carefully. produce a higher conviction rate. It concluded that dishonest non-disclosure should fall within the parameters of fraud. The law reform should also help to raise awareness that The proposed legislation will establish two cases of fraud is a criminal offence. However, it is widely accepted dishonest non-disclosure where there is: that in order to combat fraud effectively, this law reform a) A legal duty to disclose (eg where there is a statutory needs to go hand in hand with an increase in resources or fiduciary duty). allocated to the prosecution of fraud and particularly b) No legal duty to disclose information, but there is a insurance fraud. ‘moral’ duty to do so. This type of duty would arise where: ■ The victim trusts the defendant to disclose information to him. ■ The defendant knows the other person is trusting him to disclose information or is aware that he might be. ■ Any reasonable person would expect the defendant to Julian Smart disclose the information. Partner, BLM Birmingham

DISCLOSURE • JUNE 2005 17 The CA responds to dishonest claimant

Yvonne Painting v University of Oxford

Mrs Painting was employed by the University of Oxford as an administrator. On 1 June 1999 she fell from a stepladder whilst fetching a file from a shelf and sustained a back injury. It was her responsibility to ensure that work equipment was in good order. At the time of the accident she was heavily pregnant. The University conceded primary liability for the accident and the claimant accepted a reduction of 20% in respect of contributory negligence.

The claimant commenced proceedings relying The defendant applied for an order that the claimant upon evidence from an orthopaedic surgeon who pay the defendant’s costs, on the basis that the defendant recommended that the claimant should be examined had ‘won’ the case, albeit that the claimant had beaten by a spinal surgeon. On the day that the claimant was the payment into court. The trial judge refused and the seen by the spinal surgeon, she was filmed by a covert defendant appealed to the Court of Appeal (CA). surveillance team instructed by the defendant. On appeal, the defendant argued that: The spinal surgeon considered that the claimant was ■ The claimant had exaggerated her claim. genuine in her presentation and that her symptoms were ■ Whilst the claimant had beaten the payment into court attributable to the accident. However, when he saw the she had only done so by £15,000 – a small amount in surveillance video, his opinion changed. He said that the the context of the overall claim. surveillance footage demonstrated that the claimant had ■ The claimant had fallen far short of her claim – she had exaggerated her claim and had misled him at examination. only recovered 6%. ■ The defendant had succeeded on the issue of The defendant having paid into court the sum of exaggeration. £200,000 gross of benefits, applied to the court to reduce ■ The claimant had persisted in exaggerating the claim the monies in court to £10,000. The court granted the and had she not done so the case would have settled at application. an early stage. ■ It was impossible to settle the claim because of the The claimant valued her claim in the region of £500,000 – claimant’s exaggeration and failure to make counter- £400,000 after contributory negligence. However, at no offers. time did she accept or apply to take out of court either ■ The order for costs at trial resulted in the defendant the £200,000 or the £10,000. Neither did she make an having to pay for medical examinations and reports offer to settle. where the claimant had been found to have misled the expert. At the disposal hearing, the judge (having heard oral evidence from both the orthopaedic surgeon and the Part 44.3 determines that the award of costs is at the spinal surgeon and having reviewed the surveillance discretion of the court. Part 44.3(4) requires the court to evidence) concluded that to all intents and purposes, the have regard to all the circumstances including: claimant had reached a full recovery by the end of the 1 The conduct of the parties. year 2002. Thereafter, her behaviour amounted to an 2 Whether a party has succeeded on part of his case, exaggeration of symptoms. The judge further found that even if he has not been wholly successful. the claimant had misled the spinal surgeon. He assessed 3 Any payment into court or admissible offer to settle her damages at £25,331.78, net of the deduction of 20% made by a party which is drawn to the court’s attention for contributory negligence. (whether or not made in accordance with Part 36).

18 DISCLOSURE • JUNE 2005 Part 44.3(5) defines the conduct of the parties as He also criticised the claimant for failing to try and settle including: the case: 1 Conduct before, as well as during the proceedings, and in particular the extent to which the parties It is relevant that Mrs Painting herself made no attempt followed any relevant pre-action protocol. to negotiate, made no offer of her own and made no 2 Whether it was reasonable for a party to raise, pursue response to the offers of the University… Negotiation is or contest a particular allegation or issue. supposed to be a two-way street, and a claimant who 3 The manner in which a party has pursued or defended makes no attempt to negotiate can expect, and should his case or a particular allegation or issue. expect, the courts to take that into account when making 4 Whether a claimant who has succeeded in his claim, the appropriate order as to costs. in whole or in part, exaggerated his claim. This decision follows Islam v Ali [2003] EWCA Civ 612 and The CA held that in exercising its discretion it must have Malloy v Shell UK Ltd [2001] EWCA Civ 1272. In both of these regard to ‘all the circumstances of the case’ and a Part 36 cases, the court carried out an analysis of what the real payment is merely one of the circumstances to take into issue was between the parties and awarded costs to the account. There are other factors which should also be taken winner of that issue. into account, primarily the conduct of the parties. The CA agreed that the disposal hearing had been about one issue: The decision in Painting is to be welcomed and whether or not the claimant had exaggerated her claim. provides strong evidence to suggest that the courts The defendant was therefore the real winner of the trial and will increasingly penalise dishonest claimants. would be awarded the costs of the action from the date of the payment into court.

Lord Justice Longmore stated that:

The fact that the exaggeration is intended and fraudulent David Brown is, to my mind, a very important element which needs to Partner, be addressed in any assessment of costs. BLM London

DISCLOSURE • JUNE 2005 19 Interpreting product liability insurance

Case study: one for the loss in value of the cheese. In this case there would be no reason for the policy to respond. A company manufactures salt which is sold to a cheese company. Some of the salt is used The legal meaning of physical damage to make 85 tonnes of cheese. However, the cheese has to be placed in quarantine when The legal argument in Bacardi-Martini Beverages Limited v it is discovered that the salt is contaminated Thomas Hardy Packaging Limited (2002) upon the meaning of physical damage is similarly complex. The case by metal flakes. The cheese maker is looking concerned Bacardi Breezers, which had been manufactured to sue the salt company for €300,000 with benzene contaminated carbon dioxide. The supplier (the commercial value of the cheese and of the carbon dioxide denied liability as its supply contract limited liability to ‘direct physical damage to property’. the estimated cost of its disposal). The salt Clearly the Breezers could not be sold and the court had to company tells its product liability insurers determine whether the inclusion of a contaminated and BLM are asked to advise whether the ingredient constituted direct physical damage to the drink. claim is covered by the insurance. According to the judgment there was no evidence that the introduction of the benzene into the mixture altered the characteristics of, or effected a physical change in, The policy either the concentrate or the water. Since the Breezers did not exist prior to the alleged infliction of damage it could The insurance policy defines the scope of cover as: not be said that there had been direct physical damage to Accidental physical damage to PROPERTY… caused the property; rather that there had been production of a by any GOODS. defective product by Bacardi. It was found that the loss had been suffered because the finished product was useless, not because the ingredients of the Breezer had The issue been damaged.

The policy will therefore only cover the claim if physical According to the judgment of Mance LJ: loss or damage had been caused to the cheese by the supplied salt. Although… it might be possible to speak of the mix of Bacardi’s concentrate and Thomas Hardy’s own water as At first sight this may seem a simple question to answer having been ‘damaged’ by being admixed with benzene yet the legal authorities demonstrate a complex and contaminated carbon dioxide, the more natural view is conflicting set of arguments. that the mix of concentrate and water itself ceased (as always intended) to exist and the finished product came into existence at the moment of such admixture. What Discussion resulted was not damaged concentrate and water, but a defective new product. Obviously the ingredients within the cheese had not been physically lost although, due to actual or potential contamination by the metal flakes, the cheese was Boundaries on physical damage completely valueless. The question was whether there had been physical damage to the ingredients within the In the case of Pilkington UK v CGU Insurance (2004), cheese. If not, then technically the claim was a financial Pilkington had made and supplied glass panels for the

20 DISCLOSURE • JUNE 2005 roof of the Eurostar terminal at Waterloo. Out of 3,000 panels, 13 failed – but there was no personal injury or damage to the fabric of the terminal. Eurostar carried out a technical investigation and installed safety netting beneath the panels to guard against future failures. Pilkington settled the claim and sought to recover under its global liability policy.

The Court of Appeal (CA) considered the particular insurance clause which required:

Loss of or physical damage to physical property not belonging to the insured. BLM expects that a court would conclude that the cheese It was held that taking precautions to avert future damage had been damaged. or personal injury cannot amount to ‘damage’ contemplated by the policy. This required some ‘changed One further important point is the extent of insurers’ physical state’ to have occurred in the property in relation liability. In our view the indemnity would be the cost of to which the defective product has been introduced or unadulterated cheese (ie the cheese without the salt) and juxtaposed – ie there must be ‘physical damage’ and it not the market value of the cheese, had it been fit to sell. must be to property other than the supplied product.

The CA held that: Conclusion

… generally speaking, damage requires some altered When a claim is made against an insured where defective state… This plainly covers a situation where there is a goods have been supplied, the insurance cover will only poisoning or contaminating effect upon the property of a usually respond where those defective goods have caused third party as a result of the introduction or intermixture physical damage to the buyer’s property. In light of the of the product supplied. case law, the facts must be analysed and indeed it may be necessary to obtain expert evidence to determine whether Back to the metal contaminated salt: was there physical physical damage had occurred. Even if the buyer’s product damage to the cheese? is useless because of the insured’s defective product, this does not necessarily mean that it is physically damaged. There is considered to be tension between the reasoning in Whilst the seller may have a contractual liability to the Bacardi-Martini and of that in Pilkington. A real challenge buyer, this does not necessarily mean that the seller’s occurs when attempting to reconcile the judgments given product liability insurance will respond. Generally, cover in these cases. One of the difficulties is that the Bacardi- will only arise when some ‘changed physical state’ has Martini decision appears to have escaped (at least express) occurred in the buyer’s property as a result of the consideration by the CA in the Pilkington case. introduction of the defective product.

If the passage quoted from Pilkington constitutes a correct Perhaps the logic behind this analysis lies in the fact that statement of law, then undoubtedly physical damage had product liability insurance is intended to cover purely the occurred to the cheese. The analysis in Bacardi produces a insured’s legal liability for causing physical loss or damage less certain result. In this case there was no identifiable to property. It is not intended to extend to legal liability for ‘product’ until after ‘admixture’ of the contaminated economic loss eg loss of profits, without that being a component. The result was not damaged concentrate and consequence of actual injury or physical damage caused water, but a defective new product. Applying that by the insured’s goods. approach to our case study, it could be argued that the cheese constituted an identifiable product prior to the addition of the metal contaminated salt. It could therefore be maintained that the cheese had been physically damaged as a consequence of its contamination. However, the tests given in the authorities are not easily reconciled and as a result it is not possible to guarantee Julie-Anne Luck the outcome of the question of ‘damage’. On balance, Partner, BLM Manchester

DISCLOSURE • JUNE 2005 21 Data protection and freedom of information

The Data Protection Act (DPA) continues to cause difficulties for insurers and their clients. Many readers will be familiar with the Court of Appeal’s decision in 2003 in Durant v Financial Services Authority.

As a reminder, Mr Durant was a customer of Barclays Bank Plc against whom he had unsuccessfully brought proceedings. He lodged a complaint with the FSA which was rejected and subsequently sought disclosure under Section 7 of the DPA of records in connection with the dispute which he believed might assist him to re-open his claim. The Court of Appeal considered two fundamental issues. 1 What made data ‘personal’ within the meaning of ‘personal data’. 2 What was meant by ‘relevant filing system’ in the definition of ‘data’ in the Act.

Considering the first issue, the court indicated that the mention of somebody in a document did not necessarily mean it would amount to their personal data. The court identified these considerations: 1 That the information was biographical. 2 That the information should have the person as its focus rather than some other person or event.

The court took the view that references to Mr Durant in the documentation were passing (ie non biographical and Durant has subsequently been followed in a number Mr Durant was not the focus) and that they largely of cases. concerned the conduct of Barclays. In Johnson v Medical Defence Union litigation was Importantly, the second issue concerned the section of commenced following the decision of the MDU not to the DPA which determines what paper files (as opposed renew Mr Johnson’s membership. to computer records) fall within the DPA regime. The decision is fundamental in determining what paper files Mr Johnson made a request for documents which was will fall within the terms of the Act. The court considered refused. He argued that documentation which had not that the DPA could only sensibly be applied to filing been disclosed to him was his personal data and should systems that enabled identification of information with be provided to him under the DPA. The judge had held the minimum of time and cost. Files or systems without a that the documents did not contain ‘personal data’ clear indexing system would not fall within the definition. of Mr Johnson and did not fall within the DPA because (following Durant) they: Following Durant the Information Commissioner revised ■ were in manual form. his guidance and indicated that the following file types ■ did not have sophisticated indexing (so were not would not fall within the terms of the Act: recorded as a ‘relevant filing system’ or ‘data’). ■ Manual files without detailed subdivisions or indices. ■ did not contain ‘personal’ information which would ■ Documents purely in chronological order. constitute ‘personal data’.

22 DISCLOSURE • JUNE 2005 In addition, as Mr Johnson was not the subject of the that the material did not constitute ‘data’ for the purposes documents they were not ‘personal’ in the sense of the DPA. The claim failed on this basis. In addition the necessary to constitute ‘personal data’. Mr Johnson was judge found that the documents held by Lloyd’s and the refused permission to appeal on this point. information contained within them was not ‘personal’ to Mr Smith in the relevant sense as although Mr Smith was The court has also considered the application of the mentioned, this was only because he had acted for and DPA to medical records where those records are relevant on behalf of the company and was closely associated with to litigation. it. The documents were not biographical about Mr Smith to a significant extent and therefore the judge indicated In Matthew Mensah v Dr Robert Jones (19 November 2004) that he would also dismiss the claim on that ground. Mr Mensah alleged that the defendant (who had been represented by the Medical Defence Union) had improperly passed a printout of his medical records to the Conclusion solicitor at the MDU having conduct of his case. The means had been provided so that Mr Jones could take Durant provided welcome clarification of the application advice as to whether or not the records needed to be of the DPA which will assist many organisations in dealing disclosed in proceedings that Mr Mensah was bringing with oppressive or vexatious requests under the DPA. against Dr Jones alleging physical and verbal assault. The cases that have followed have demonstrated that the courts are applying Durant in a sensible and pragmatic Mr Mensah alleged that his medical records were way which will undoubtedly be comforting for those on confidential and that by disclosing them Dr Jones had the receiving end of DPA requests. breached the DPA, the Access to Health Records Act 1990 and the law of confidentiality. Freedom of information The judge noted the provisions of section 35(2) of the DPA which provides that personal data is exempt from Finally, as many of you will be aware, the Freedom the non-disclosure provisions where the disclosure is of Information Act 2000 (FOIA) came into force on necessary for the purpose of, or in any connection with, 1 January 2005. There is no authority yet in the form any legal proceedings. The judge said that the disclosure of decisions from the Information Commissioner or from by Dr Roberts in this case was plainly for the purpose of the courts and it is worth noting that it took three years (and in connection with) legal proceedings. for substantive data protection caselaw to emerge after the DPA came into effect. The judge felt that the Access to Health Records Act 1990 had no application and could not impose on Dr Jones an The FOIA gives wide ranging powers to individuals and obligation to obtain a court order before sending the organisations to seek information and whilst there are a print-out of the medical records to his solicitor. large number of exemptions (which potentially confuse the situation) these will apply only in limited instances. Finally, in relation to confidentiality, the judge noted that The FOIA also makes important changes to the DPA in the obligation of disclosure could override the obligation relation to public authorities. In particular, the FOIA has of confidentiality. He stated that the law and common amended the definition of data in the DPA so that the sense required that a doctor disclose any confidential definition will apply to unstructured paper files held by material which may be relevant to his solicitor for advice public authorities (so removing the benefit of the decision as to the proper course to be taken. in Durant for public authorities). We are already seeing large numbers of contentious requests being made under Finally, a further case has recently come before Mr Justice the Act (the first ones, naturally, being made on 1 January Laddie. In Terrence Smith v Lloyd’s TSB Bank Plc Mr Smith 2005!) and will continue to keep you updated in this had been the managing director and controlling developing field. shareholder of a company that had gone into liquidation, causing him to lose his home. There had been a number of pieces of litigation between Mr Smith and Lloyd’s and against this background he made a subject access request for material that he said had been withheld from him and which he thought would assist his litigation. On the basis that the material held by Lloyd’s was held on paper in Tim Smith unstructured bundles, the judge (following Durant) found Partner, BLM London

DISCLOSURE • JUNE 2005 23 Disciplinary Law

Self regulation v regulation by the State

This article examines the principles of self regulation of the professions and the impact of the state (through mechanisms such as review of the tribunals system and legislation) upon disciplinary bodies. It will consider the extent to which disciplinary committees can consider themselves independent and what impact this might have on the future of the professions generally.

Self regulation interest in professional standards. Scandals in the medical arena involving Harold Shipman, Bristol Royal Infirmary The ability/power to self regulate is seen as a defining and Alder Hay Hospital have all contributed to the characteristic of a professional group. In return for undertaking of a review of the effectiveness of the current membership a review system is established to be sure that regulations in place and increased intervention by the only fit and proper members remain in that group. It is state. The legal profession are also entering a new era also seen as an alternative to heavy handed state following the Clementi Review. regulation which is associated with out of date statutes and high costs. Governmental guidance A significant number of professions in the UK have an underlying statutory framework for regulation, but the The state has its own regulation responsibilities through disciplinary role is actually carried out by the profession the Tribunal Service. This includes the Criminal Injuries itself eg The Medical Act (1983) is the basis for the General Compensation Panel, Competition Commission and Medical Council’s powers. Employment Appeals Tribunal. In 2001 Sir Andrew Leggatt reported (at the request of the Lord Chancellor) The effectiveness of self regulation is, however, coming that there was a need to codify the systems in place. This under ever greater scrutiny, not least as a result of media has resulted in the establishment of model rules and

24 DISCLOSURE • JUNE 2005 organisations including GMC, General Dental Council and the Nursing and Midwifery Council. It was initially titled The Council for the Regulation of Health Care Professionals (CRHP).

One key statutory provision (in place since April 2003) is for the council to have the power to refer decisions made by disciplinary committees to the courts for review. The basis for referral is that the decision made is considered too lenient either in terms of the findings or penalty imposed.

As a result of this provision disciplinary committees are subject to another layer of review and potential challenge. Such powers have already been demonstrated in three reported cases: Ruscillo (which involved the GMC and the powers of CRHP to refer), Truscott (which involved The Nursing and Midwifery Council and undue leniency) and Jellett (which involved the Health Professions Council and restoration of a physiotherapist to the register). standards underpinned by an overriding objective of fair and just management. This template cannot afford to be ignored by other bodies carrying out non court functions, Conclusion such as disciplinary committees. Self regulation of the professions is increasingly being squeezed and influenced by statutory regulation. This is a The impact of the Human Rights Act response to the increased scrutiny of decision makers, associated with ever increasing public demands and the The Human Rights Act 1998 came into force on 2 October spotlight of the media. 2000. The key provision in the context of professional regulation is Article 6 – known as the right of an The future of self regulation therefore appears uncertain. individual to a fair hearing. The Act applies to public What is clear is that demands for compliance will increase authorities and, bodies such as the General Medical the level of regulation and rules that professionals will be Council (GMC) fall within it. expected to abide by. This will in turn result in an escalation of the costs of membership and is likely to The result is another external pressure upon disciplinary increase the time frame for the scheduling of disciplinary committees to review their procedures and ensure that hearings and announcement of decisions. All of the above they proceed with fairness and openness. To date, the may produce a reluctance within such groups to be case law has been limited and no doubt the GMC took nominated as committee members and, if this problem heart from the decision of the Privy Council in Gupta v becomes too pronounced, full state regulation may be the GMC (2001). In that case, which involved an appeal only alternative. With judicial recognition that committees from the Professional Conduct Committee, the council which include professional members have a unique considered that there was no general duty for the expertise and responsibility for regulation such an event committee to give reasons for their decision. The would be a backward step. transcript of evidence was clear, the account provided by the doctor was found to be untruthful.

The Council for Health Care Regulatory Excellence (CHRE)

This organisation was established by the NHS and Health Care Professions Act 2002. It is funded by the Department of Health and its purpose is to stimulate good practice. It Vicki Swanton oversees the regulatory work carried out by nine Partner, BLM London

DISCLOSURE • JUNE 2005 25 BLM briefing

BLM TALKS

Julian Smart (BLM Birmingham) spoke at the conference organised by Post Magazine entitled Fraud: Fighting the battles winning the war on 22 September 2004.

BLM’s conference on Children’s Law took place in London and Huddersfield on 3 and 17 November 2004. The conference considered recent developments in the Children Act 2004 along with key trends and issues surrounding children’s law. Michael Pether (BLM London) and Jonathan Clay (BLM Manchester) chaired the events.

Ailsa Adamson (BLM Stockton-on- Martin Bruffell (BLM Southampton) Disease conference which took place Tees) and Jonathan Edwards (BLM chaired BLM’s Health & Safety: at One Great George Street, London London) addressed the conference Criminal investigations and practical on the 27 April. Speakers included organised by Post Magazine entitled advice seminar held on 22 February specialists from BLM London, along Identifying, controlling and combating 2005. A second conference with presentations by Dr Moore-Gillon costs in claims on 24 November 2004. chaired by Vivienne Williams (St Bartholomew’s Hospital), took place in Manchester on Dr Anthony Cleare (Institute of Michael Salau (BLM London) spoke 10 March. Specialist speakers Psychiatry), Catherine Foster and David at the Post Magazine conference included: Prof. Frank Wright Platt (both Crown Office Chambers). entitled Managing Environmental (University of Salford) and Simon Claims: A modern day problem on McCann (Deans Court Chambers). Papers for many of these talks are 8 December 2004. available. Please contact the marketing BLM’s Adverse Incident seminar: department on 0151 236 2002 to order In January 2005, Nick Pargeter (BLM Strategies for handling adverse copies. London), chaired the BLM Cumulative incidents in the private healthcare Back Injuries Seminar in Birmingham sector took place on 9 March 2005. which tackled claims handling issues Topics covered included dealing TRAINEES QUALIFY such as the Manual Handling with the police and media and Operations Regulations and liability how to manage litigation claims. The following were offered positions for occupational back injuries. Gary Allison (BLM London) and in the firm as qualified solicitors after Expert speakers included: Terry Prof. Frank Wright (University of training with BLM: Mason (Morgan Finch & Partners), Salford) featured. Liverpool: Christopher Prescott, Mr John Webb (Queens Medical Tamana Fronks and Neil Wells Centre) and Paul Bleasdale QC Andrew Relton (BLM Manchester) (personal injury). (No. 5 Fountain Court Chambers). gave a presentation to the Institute London: Nicola Sparkes (professional of Fire Engineers Conference on indemnity), Lisa De’ath (clinical On 16 February 2005 Val Jones 8 April 2005 on the topic of negligence), Louise Allam, (BLM Manchester) spoke at a Post Corporate Manslaughter. (construction). Magazine conference entitled New Manchester: Michael Rogers, Roads for Motor Claims: An industry Michael Pether (BLM London) Michael Appleby and Catherine at the crossroads. chaired BLM’s annual Occupational Hindle (recovery).

26 DISCLOSURE • JUNE 2005 RECENT SUCCESSES FOR BLM CLIENTS

Jim Sherwood led a BLM team consequence of the conditions under private company involved in a acting on behalf of the Commissioner which he was required to work. In government initiative aimed at of Police of the Metropolis in the the judgment the court provided an reducing the number of young Morris Inquiry. The inquiry, which overview and observations on the people not in education, opened on 21 January 2004 and current case law and reaffirmed the employment or training (the NEET published its report on 14 December primacy of the decision in Hatton and figure). Successes include opposition 2004, investigated professional the 16 propositions set out by Hale LJ. to a threatened judicial review action standards and employment matters None of the cases since Hatton had and changing funding arrangements in the Metropolitan Police Service. detracted from the guidance. to enable greater tax efficiency The inquiry was established by the (generating savings of £4.5 million). Metropolitan Police Authority (see page 5). The claimant in Thatcher v M&B/ Six Continents brought proceedings Mike Brown (BLM Liverpool) is against his employers for psychiatric instructed by the Medical Protection injury as a result of stress following Society to act on behalf of a doctor in a move to a public house in 1995. the Mubarek inquiry and also acted The claimant accepted that prior to for a doctor at the Ashworth Inquiry. 2000 incidents were not stressful and as he did not complain to his Janet McWhinney (BLM London) employer (so they could not have acted for the defendant chiropodist foreseen the stress injury) he did not in Randall v Nolder. This was a satisfy the tests set out in Hatton. low-value claim which the defendant Luisa Lamb (BLM Manchester) won at trial and recovered costs. represented the defendant. This case highlighted the importance The case demonstrates the of defending small cases in order importance of the Hatton guidelines. to protect the reputation of a Muir v Laurel Pub Company and An employer must be on notice of healthcare practitioner. Whitbread Group plc – Boris problems to enable them to take Cetnik (BLM London) successfully action. The HSE guidelines now David Brown (BLM London) defended a passive smoking impose stricter duties but the case successfully defended University claim made by a former pub will be of relevance to alleged of Oxford in Painting v University manager, Ms Muir, in what is stress-induced injury cases prior of Oxford (see page 18). thought to be the first contested to November 2004. claim before the courts since 1998. Zoe Mills (BLM London) successfully Ms Muir had suffered vocal cord In William Majrowski v Guy’s and defended Whitbread Group plc in nodules which she said were due to St Thomas’s NHS Trust, Vanessa Triphook v Whitbread Group plc which exposure from secondary smoke in Latham (BLM London) acted for the demonstrated BLM’s defence against the pub where she worked. This in respondent. The claimant alleged the ‘claims culture’. turn led to the development of that he was bullied, intimidated and severe psychiatric problems and her harassed by his departmental Best v Staffordshire University – giving up work. She claimed manager. He brought a claim under David Armstrong (BLM London) damages close to £400,000. The the Protection from Harassment Act successfully defended Staffordshire court dismissed the claim finding 1997. The Court of Appeal decided University in a work-related stress that the vocal cord nodules were on a 2:1 majority that an employer claim. Mr Best, a senior lecturer, retired caused by voice abuse and that could be vicariously liable for on grounds of ill health in 2000 aged passive smoking was not a material harassment committed by an 46. He assigned his breakdown to an cause or contribution. employee in breach of Section 1 of unmanageable workload, and said the Act. This highlighted that under the university should have provided Julie-Anne Luck and Michael Parr the Act, a claimant can side step more support. The Court of Appeal (BLM Manchester) have advised some of the common law hurdles set dismissed the claim on the grounds Greater Manchester Connexions out in Hatton. A petition for leave to that Mr Best’s health breakdown Limited (GMCP Ltd) on a number appeal the decision is presently was not a reasonably foreseeable of non-contentious issues. GMCP is a before the House of Lords.

DISCLOSURE • JUNE 2005 27 FORTHCOMING EVENTS BLM NEWS

The second of this year’s Occupational Disease conferences takes The clinical negligence and place in Manchester on 8 September. Chaired by Val Jones (BLM disciplinary department was Manchester), speakers will include experts from BLM’s disease team as appointed as main legal provider to well as guest speakers. Topics to be covered include asbestos, stress, defend optometrists before the noise and vibration, passive smoking and cumulative back injuries. General Optical Council by Abbey Legal Insurance in January 2005 Two workshops on the key issues concerning the transport industry (Gary Allison, BLM London). (including liability, prosecutions and safe systems of work) will take BLM congratulates this year’s place at the Radisson Hotel, Manchester Airport on 16 June. Specialists winner, Seaview Duver Coast from BLM’s transport division will host the workshops, with Ruth Protection Scheme team, comprising Graham (BLM Manchester) chairing the day. of Isle of Wight Council, Royal Haskoning, John Main, Simon Colenut Specialists from BLM’s construction division will host an evening and Van Oord for the Outstanding Construction seminar on 21 June at BLM, London. Speakers will Contribution award sponsored by address the topics of dealing with the media, issues of intellectual BLM at the NCE/ACE Consultant of property and practical aspects of adjudication. the Year Awards 2005 held at Claridges Hotel, London, 18 March. 30 June is the date set for BLM’s police and emergency services The award recognises individuals, division seminar taking place at Armourers’ Hall, London. A broad groups or teams that have acted as range of topics will be addressed at the event, with an examination ambassadors for the profession and of the issues facing those who defend claims and manage risks on exemplify the contribution consultants behalf of police forces and their insurers. and engineers can and do make to today’s society. An early entry in the diary for BLM’s annual Claims Reviews, now confirmed as 28 September in Manchester and 5 October in London. At the Strategic Risk 2005 European Risk The events provide an unrivalled opportunity to focus on the personal Management Awards Michael Pether injury changes and challenges that have impacted on the insurance (BLM London) presented Gerald Tait industry over the last year. The London event will take place at the of Midlothian Council with the award now regular setting of One Great George Street, Westminster. A for the Best Risk Management different venue though for Manchester this year, with a move to New Approach in the Public Sector at the Century House (near to Victoria station and the MEN Arena). Gosvenor House Hotel, London on 29 April 2005. The awards recognise Gary Allison (BLM London) will chair a BLM seminar on clinical the excellence of risk management in discipline in London on 19 October 2005. organisations throughout Europe. This is the second year BLM has sponsored 9 November is the date for BLM’s conference focusing on asbestos the award as part of our continued in the construction industry, carbon monoxide and housing disrepair commitment to best practice in claims. Terry Renouf (BLM London) will chair the event. the insurance industry.

Watch this space for confirmation of the November date for BLM’s BLM sponsors Post Magazine’s next local authority seminar. A wide range of issues affecting local Claims Club, a focused forum for authorities and their insurers will be addressed, with speakers drawn senior claims professionals to from BLM’s local authority division. discuss, analyse and drive forward debate on the major issues facing A seminar addressing the crucial issues affecting the leisure the insurance claims sector. The industry takes place at the Burlington Hotel, Birmingham on onus is on identifying present and 6 December 2005. future best practice and trends, developing collaboration between Bookings are now being taken for all the above events. For more claims professionals across their detailed information on the programmes please visit our website businesses and providing the www.blm-law.com claims industry with a forum for thought-leadership.

28 DISCLOSURE • JUNE 2005 PARTNERSHIP NEWS

BLM announced the appointments Leeds: Jonathan Dees, Jane of four new partners on 1 October Whitehead, Ruth Harrison 2004 and three new partners in (personal injury). 1 April 2005. The appointments London: Sophie Meer, Victoria bring the partnership total to 98. Evans, Charlotte Owen, The new partners: Barbara Hatton (occupational Dubai: Jeremy Cama. disease), Juliette Mellman-Jones London: Guy Lane (construction). (clinical negligence), Dafydd Manchester: Sandra Jones (recovery) Pugh, Amy Richardson plus and Darrell Smith, Neil Richards Wendy Badsey-Ellis (who joins (personal injury). this expanding personal injury Stockton-on-Tees: Sheila Russell and team), Alexander Traill, Gordon Cooper (personal injury). Jacqueline Sutherland, Tasha Dhami, Shabana Mahmood BLM also welcomes as partners: (professional indemnity), Christopher Newton and Michael Charles Ingmire (construction). Renshaw (BLM London) who Liverpool: Daniel Sanchez-Lopez strengthen the personal injury team (personal injury). and due to the increasing health and Manchester: Daniel Wilson, safety and environment work, Michael Cairns, Nicholas Kelly, Christopher Green joins BLM Stephanie Halliwell, John Collins, Manchester. Sowmya Jaganath, Ayoob Atcha, Deborah Nisbet, John MacKenzie, BLM also welcomes: Alexandra Bailey, Nicholas Leigh, Birmingham: Caroline Barker Maruim Razzaq (personal injury). (professional indemnity), Bob Davies Southampton: Suzanne Weight (personal injury), Emma Ashton (professional indemnity and (occupational disease). construction).

WORKING PARTIES

■ Sarah Mansfield (BLM Liverpool) has been appointed to the Sweet and Maxwell’s Litigation Law Panel. ■ Terry Renouf (BLM London) continues to be involved in the Civil Justice Council sponsored costs process. The mediation of success fees in disease-related cases has now concluded. A review of the RTA fixed costs process will start shortly and the public liability mediation will recommence soon. ■ Ailsa Adamson (BLM Stockton-on-Tees) has been appointed to the panel of mediators supporting the Teesside Courts Mediation Scheme. ■ Michael Brown (BLM Liverpool) has been appointed Deputy District Judge in the Northern circuit. ■ Terry Renouf (BLM London) has convened meetings with insurer clients and ABI to take a strategic overview of the Personal Injury Protocol. The next meeting is scheduled for early June. ■ Val Jones (BLM Manchester) is on the CJC working party looking at how to promote best practice in rehabilitation with a view to suggesting amendments to rules and protocol. www.blm-law.com

Birmingham Leeds Liverpool London Manchester Southampton Stockton-on-Tees Dubai 21 Bennetts Hill Park Row House Castle Chambers Salisbury House King’s House Carlton House Innovation House Suite 701 Birmingham 19–20 Park Row 43 Castle Street London Wall 42 King Street West Carlton Place Yarm Road Al Khaleej Centre B2 5QP Leeds Liverpool London Manchester Southampton Stockton-on-Tees PO Box 28597 LS1 5JF L2 9SU EC2M 5QN M3 2NU SO15 2DZ TS18 3TN Dubai, UAE

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