Issn 1475-4711

September 2006 Contents

Editorial 2 The Compensation Act 2006 – a three speed approach to legislation? Alistair Kinley 3 Costs law update: Garrett, Myatt and Rogers Susan Kendry 5 Motorists beware: Big Brother is watching you! Richard Clarke 8 Vicarious liability under The Protection from Harassment Act 1997 Vanessa Latham 10 Medical records in low value PI cases – law of unintended consequences Henry Bermingham 12 Schools teach the HRA a lesson or two Roy T Woollard FRSA 14 Use of defence counsel in minimising PL risk Chris Coughlin 16 Exploring excluded liability under the Road Traffic Act 1988 David Brown 18 Racing ahead: premature issue and predictable costs Nathan Jones 20 Fairer Public Inquiries? Jim Sherwood 22 Funding of care and accommodation Michael Hardman 24 Abuse claims: the end of the road for Stubbings v Webb? Jeremy Davies 26 Witness immunity: what would you do? Mike Brown 28 Examining documents: applying best practice Henry Kirkup 30 Bolton v MMI – Clarity or confusion for asbestos cases John Harland 32 The sky’s the limit in the construction ‘global market-place’ Paul D Taylor 34

Disclaimer: This document does not present a complete or Hot summer days and tree root subsidence comprehensive statement of the law, nor does it constitute legal Andrew Plunkett 36 advice. It is intended only to highlight issues that may be of Evidence in fire (and other recovery) cases: interest to clients of Berrymans Lace Mawer. Specialist legal judicial guidance David Tye-Reeve 37 advice should always be sought in any particular case. Information is correct at the time of printing. BLM briefing 39

Disclosure is published by the marketing department of Editorial board Berrymans Lace Mawer (Castle Chambers, 43 Castle Street, Val Jones (guest editor) Jim Sherwood Liverpool L2 9SU) on behalf of the partnership. Jenny Moates Joy Branigan Printed in England by Paterson Printing Ltd. ISSN 1475–4711. Jonathan Clay Linda Coppell Issue 8. Copyright © Berrymans Lace Mawer 2006 Catherine Hawkins Kathy Széputi

Berrymans Lace Mawer DISCLOSURE • SEPTEMBER 2006 1 Editorial

Time for reflection…

On 26 May 2005, the Prime Minister delivered an important policy speech on the compensation culture at the University of London. Whilst promising to ‘roll back the tide of regulation’, he shrewdly observed that, ‘we cannot guarantee a risk-free life’. After asking what should be done to manage risks sensibly, he answered his own question by saying: ‘First, recognise the problem. Some public discussion of it helps engender a more sensible debate. Instead of the ‘something must be done’ cry that goes up every time there is a problem or a ‘scandal’, we make it clear we will reflect first and regulate only after reflection’.

I shall leave it to the reader to consider Tony Blair’s words in the context of the 84 days it took Parliament to pass section 3 of the Compensation Act 2006, reversing the House of Lords’ decision in Barker.

Reflect then that it took 48 years for the legal consequences of Vernon Barker’s first exposure to asbestos to receive the considered and detailed analysis of five of the sharpest legal minds in this country, all seeking fairly and justly to apply and adapt the common law to the complex issues of causation.

One can also reflect on how long it might be before the retrospective application of the 2006 Act is challenged under the Human Rights Act?

By contrast, it has taken seven years so far to bring forward the regulation of claims management activities – and whilst the 2006 Act provides the framework, the detailed regime will not be in place until Spring 2007.

It is perceived as helpful that we now have a statutory provision in section 1 aimed at deterring liability where there is ‘desirable activity’ being undertaken.

It remains to be seen whether these provisions of the Compensation Act survive unscathed and we await with interest how the courts will respond to such challenges.

And this edition of Disclosure seeks to cause all of us to reflect on a variety of topical issues this year. We welcome comment and inquiry – and invite you to contact our editorial board at [email protected]

And, as ever, BLM will keep you closely advised…

Val Jones Partner, BLM Manchester

2 DISCLOSURE • SEPTEMBER 2006 Berrymans Lace Mawer The Compensation Act 2006 – a three speed approach to legislation?

The Act received Royal Assent on 25 July 2006, some seven months after it was introduced in Parliament. Despite detailed and lengthy debates, uncertainties remain about how the provisions on negligence will operate in practice. Similar concerns surround the hastily-introduced section that retrospectively restores joint and several liability for mesothelioma. Ironically, the least controversial part of the Act – the regulation of claims management activity – has, at the time of writing, yet to be implemented.

Aims of the Act The second has garnered little support, other than within government – so in fact it has progressed quickly. Insurers The Act represents a somewhat clumsy fusion of three and lawyers questioned the need for new legislation policy aims that do not, arguably, sit easily in the same about negligence and pointed out the risk of wasteful piece of legislation. They are: satellite litigation. However, Ministers repeatedly stated i) to regulate claims management activity that the Act does not change the common law. If that is ii) to seek to combat the perception of a ‘compensation the case, why legislate? The clause does appear to be the culture’ and ‘something must be done’ provision. iii) to compensate mesothelioma claimants. The third has been achieved via an amendment to the Act The first is widely supported and is long overdue. The that was introduced very quickly indeed, in response to Blackwell Committee identified it as an option in 2000 Barker v Corus [2006] UK HL 20. Barely five weeks passed and in 2004 the Better Regulation Task Force positively between the announcement of the intention to reverse recommended it. Hence it is somewhat perverse that the Barker to the implementation of the relevant provisions. relevant provisions remain to be implemented. Cynics may say that perhaps that is because regulation will be costly and complex. Regulation of claims management activity

This was the main purpose of the Act and it had universal support. However, the other political concerns detailed here seemed to have displaced it. What has developed is a temporary regulatory regime with some very novel and untested features.

First, the regulator will be the Secretary of State. Second, national monitoring and compliance will be contracted out to a single Trading Standards unit – this has never been attempted before. Third, the implementation of the regime will be guided by an individual (Mark Boleat, a former ABI Director General) recruited by government. Fourth, the regime will be temporary and will be

Berrymans Lace Mawer DISCLOSURE • SEPTEMBER 2006 3 subsumed by the Legal Services Board when it is It’s shocking that the families of mesothelioma victims established, probably in 2007/08. are to be denied compensation on a mere technicality … The Government must act immediately to change the law Even so, the content of the proposed regime is, by and and ensure that this cruel and unjust decision is reversed. large, pragmatic and to be welcomed. Consultation on the scope of the regulation and on the conduct rules Following intense political pressure from those quarters, closed on 29 August. Ministers’ stated aim is to the government announced on 20 June that it would implement the regime by October 2006. That may stretch amend the Bill to overturn Barker and impose joint and to ‘in the autumn’. Seasoned observers of Whitehall will several liability in mesothelioma claims. This was achieved translate this as meaning ‘before 31 December’. via the new section 3.

Whilst this article does not take issue with the aim of fully Desirable activities and apologies compensating mesothelioma claimants and their families, quick legislation is all too often poor legislation. Section 3 The negligence provisions (sections 1 and 2 of the Act) could yet be another example. The legislative process was came into effect on Royal Assent. Hence they apply to defective because consultation was late and very limited – new cases and all ‘live’ cases at that date. insurers may have been consulted but local government and commerce were simply not involved. And the Section 1 allows the court, when assessing steps taken substance is of concern on several levels because: towards meeting a standard of care in a claim in ■ the section is not limited to workplace exposure. negligence (or breach of statutory duty), to have regard ■ it is silent on the possible application of the to the ‘desirable activity’ being undertaken by the Pneumoconiosis Act 1979. defendant. In practice, this is likely to be used only by ■ it fails to set out the basis of contribution as between defendants seeking to prove that an act or omission was defendants. not negligent. This prospect strikes a nice balance with ■ it leaves the complex question of FSCS involvement to the predictions of satellite litigation: it was the largely subsequent secondary legislation. defendant and insurance interests that raised that possibility, and it is largely in their hands whether they Most alarmingly perhaps is the fact that the legislation is embark on that by litigating about section 1. Whether it explicitly retrospective, backdating the reversal of Barker would be politically expedient to do so at the same time to allow for the re-opening of any mesothelioma claim as the ABI is calling for radical reform of the compensation concluded since the judgment. system generally is another matter. While not many claims may be affected, the danger is that Apologies and offers of treatment will not, by virtue of this sets a precedent. The prospect of government again section 2, themselves to amount to admissions of liability. intervening to overrule retrospectively an appellate This is a practical provision (which was not in the original decision under pressure from its backbenchers and unions Government Bill) designed so that parties will apologise and is not a happy one for defendants and their insurers – offer early rehabilitation. Once again, the section applies to particularly so when the House of Lords judgment in the new claims and all claims ‘live’ at implementation date. pleural plaques test cases is expected later this year. There could be significant benefits if section 2 is used effectively to speed up claims notifications, to bring forward rehabilitation, and to reduce adversarial behaviours. BLM represented the defendant in Barker. Further detail can be found in the BLM newsletter Disease Matters 5.

Mesothelioma claims

In Barker, their Lordships held that mesothelioma claimants with gaps in employment history (or in employers’ liability insurance history) should bear the shortfall in compensation associated with those periods. The decision caused widespread concern in the claimant community, the Labour Party and the trades union movement when, in a press release issued on the day of the Barker judgment, the General Secretary Alistair Kinley of the TUC said: Head of public policy, BLM London

4 DISCLOSURE • SEPTEMBER 2006 Berrymans Lace Mawer Costs law update: Garrett, Myatt and Rogers

Since April 2000 Conditional Fee Agreements and ATE premiums have been thorns in the side of defendant insurers. Two recent decisions have considered these issues, the outcomes of which will be both a help and hindrance to insurers. This article considers these cases in turn and the implications of these decisions.

The cases individual cases is not necessarily a good reason for construing the statutory provisions in such a way as will ■ Garrett v Halton Borough Council/Myatt v The National avoid such results’. Coal Board [2006] EWCA Civ 1017 (these cases were heard together). By way of side note some readers may recall the House of Lords decision in Hollins v Russell [2003] EWCA Civ 718 Concerning the enforceability of a CFA in light of a and wonder how this decision of the CA sits with it. This breach of Regulation 4 of the CFA Regulations 2000 was considered by the court and it was decided that (which remain valid for CFAs entered into prior to 31 the issues in Hollins were not the same as those in Garrett October 2005). and Myatt and, for this reason, the decisions may be distinguished. ■ Rogers v Merthyr Tidfil County Borough Council [2006] EWCA Civ 1134. Garrett – disclosure of indirect financial interest Concerning the recoverability of staged ATE premiums. Having decided then that the relevant circumstances to be considered are those at the time that the CFA was entered Umbrella issues into and materiality of breach is not relevant the court was able to move on to the facts of the individual cases. Before looking at the individual facts of Garrett and Myatt the Court of Appeal (CA) considered two In Garrett the issue was disclosure of an indirect financial issues relevant to both. The first was whether the interest between a firm of solicitors, Websters, and claims enforceability of a CFA is to be judged by reference to handlers Ashley Ainsworth. The latter had an arrangement the circumstances existing at the time when it is entered with NIG as agents brokers that they would recommend into, or by reference to the circumstances known to only their ATE policy. This main issues divided down into exist at the time when the question arises for decision. three sub-issues to be decided namely: The second was materiality. The first of these was easily decided by looking at the law for all contracts. A contract is enforceable from the date on which it is entered into and not at some future undetermined date. The second was more complex.

The court considered whether or not materiality required a consideration of actual detriment to the client. It was found that sections 58(1) and (3) of the Courts and Legal Services Act 1990 (the enabling Act of the Regulations) were clear and uncompromising to the effect that ‘if one or more of the applicable conditions is not satisfied, then the CFA is unenforceable’ and that ‘the fact that it (the 1990 Act) may produce harsh or surprising results in

Berrymans Lace Mawer DISCLOSURE • SEPTEMBER 2006 5 1) Did this amount to an indirect financial interest on the Ainsworth Panel’ they did not have a financial interest part of the solicitors? in the ATE premium was sufficient disclosure. The CA 2) If so, did this interest need to be disclosed? dismissed this submission finding that most laypersons 3) If 2 & 3 were answered positively had the financial would not understand the significance of the comment. interest and the implication of this in fact been Most people would believe that membership of a panel disclosed to the client in accordance with Regulation was a mark of excellence and so would not understand 4(2)(e)(ii)? the implications of the comment and the fact that it referred to a financial relationship with Ashley Ainsworth. By the time that the matter reached the CA issue 1) had been accepted by the appellant, issue 2) was the subject This case has massive implications not just for those of some novel submissions by both counsel for the firms of solicitors who have never disclosed an indirect appellant and for the Law Society (who intervened) but financial interest despite the claims farmers tying them was ultimately dismissed leaving issue 3) to be considered into to specific ATE insurance policies, but also for firms in more depth. who do not disclose a direct financial interest with the commissions received for recommending ATE insurance On this point the appellant argued that their comment to policies generally, a common practice among solicitors. their client that although they were ‘on the Ashley This situation will, until the last pre 01.11.05 CFA case is

6 DISCLOSURE • SEPTEMBER 2006 Berrymans Lace Mawer settled, cause potentially severe consequences for many these, inherently more expensive, staged premiums were firms of solicitors in tens of thousands of cases. found to be reasonable.

The premium in consideration was £4,680. The claim had Myatt – investigations into forms of funding settled for £3,000. Following the case of The Home Office v Lownds [2002] EWCA Civ 365 proportionality and the The issue in Myatt concerned whether there had been a two stage test, that if disproportionate costs should be breach of Regulation 4(2)(c) and the extent of assessed as to both reasonableness and necessity, was investigations required by solicitors into alternative considered. Ultimately in Rogers the CA found that methods of funding, namely BTE insurance. Ollerenshaw if the court found that it was necessary to incur the were the firm of solicitors who had entered into CFAs with staged premium then … it should be adjudged a clients in cases which had settled prior to issue. By way of proportionate expense. investigation into alternative funding the clients had been asked questions about the possibility of legal expenses This unusual interpretation is difficult to understand but insurance being available through credit cards and other is, at the moment, what we are left with. existing insurance policies but were not asked to produce these to their solicitors. Additionally the clients had been The good thing to come out of this decision is that the asked these questions unannounced in telephone calls for wording of the order means that in most instances it is which they had been given no time to prepare. type of case specific ie public liability cases, since significant emphasis is placed on the frequency of claims The CFAs were held to be unenforceable at Detailed lost and discontinued hence the size of the premiums Assessment and this decision was confirmed in the CA. considered reasonable here. The court discussed what amounted to reasonable investigations in order to satisfy the Regulations. Several Additionally the case produced a procedure to be factors were considered relevant, but it was emphasised followed by a party funding a case via a staged ATE that ‘what it reasonably required of a solicitor depends premium. This is that if the policy incorporates two or upon all the circumstances of the case’. Factors relevant more staged premiums then the opponent should be include, but are not limited to the following: informed that policy is staged and accurately set out the ■ Nature of the client – some will be more sophisticated trigger points at which the cost increases. As long as the than others and more likely to understand and answer opponent is informed his liability to pay such a premium questions about availability of BTE insurance. should not be a contentious issue. ■ Circumstances of instruction – instructions given while the client is in hospital may be less reliable for example. ■ Nature of claim – some types of claim are more likely The future to be covered by ATE than others for example road traffic accidents. Both Myatt and Rogers are being appealed and so we shall ■ Cost of ATE premium. see what happens to both in the future, but I would be ■ Advice given by a Claims Management Company – the surprised if either decision were overturned without a solicitor entering into the CFA must consider whether major change in government policy with regard to the the advice given by the CMC is sufficient and their funding of claims. investigations thorough.

While the decision made it perfectly clear that ‘fishing expeditions’ were unwelcome and that there should be ‘genuine issue as to whether there has been compliance with Regulation 4’, it did not shut the door on such queries by defendants and indeed, made decisions for the court easier since they no longer have to consider material disadvantage to the claimant.

Rogers – staged premiums Susan Kendry While the above cases may be seen as victories for Costs drafts department, defendants this was a reversal of fortunes for them as BLM Manchester

Berrymans Lace Mawer DISCLOSURE • SEPTEMBER 2006 7 Motorists beware: Big Brother is watching you!

In 2000 the Prime Minister launched the Road Safety Strategy ‘Tomorrow’s Roads – Safer for Everyone’ setting out a framework for widespread improvement in road safety generally. Next year should see the proposed Road Safety Bill come into force. It is not only intended that this will make roads safer but also that it should reduce the number of accidents by discouraging dangerous driving. New criminal offences are being created under section 20 in relation to causing death whilst driving carelessly (punishable by a maximum of five years imprisonment and thus a lesser offence to causing death by dangerous driving) or illegally, as well as owning a vehicle that does not have insurance.

In recent years two points relevant to this issue have already been targeted, namely: i) Use of mobile telephones whilst driving. ii) The length of the working week.

Mobile telephones

We live in an age of instant communication and availability and whilst this has many benefits there are also associated problems, particularly in relation to road safety. It is now nearly three years since the introduction of the ban on using hand-held mobile telephones whilst driving under Regulation 110 of the Road Vehicles (Construction and Use) Regulations 1986.

What is sometimes overlooked is that the ban not only extends to drivers but also, by virtue of Regulation 110(2), to employers who must not ‘cause or permit’ any other person to drive a motor vehicle on the road whilst using either a hand-held mobile telephone or a ‘hand-held device of a kind specified in paragraph (4)’ (ie generally any device which performs an interactive communication function by transmitting and receiving data – including texting, receiving images and use of the internet).

Widespread guidance on the subject has been published. The common perception is that the law has not been In short an employer will not be liable simply for taken seriously by a large number of motorists who supplying a mobile telephone or even because the openly flout it. At present the penalty for a driver is either employer has telephoned the employee whilst he was a £30 fixed penalty or a maximum fine on conviction of driving. However, the employer probably would be held £1,000 (£2,500 for drivers of goods vehicles or those liable if an employee was required to use a hand-held manufactured or adapted to carry nine or more telephone while driving and it might also be liable if it passengers). However, under clause 26 of the proposed failed to forbid employees using mobile telephones on Road Safety Bill the penalties will increase with the company business whilst on the road. starting point being a £60 fine and three penalty points.

8 DISCLOSURE • SEPTEMBER 2006 Berrymans Lace Mawer Furthermore, the police have already been actively a major factor in the accident. The company was fined targeting this issue and it is no coincidence that the £30,000. The particular significance of this decision is number of motorists caught and fined for driving and that this was the first time a company was fined where dialling has almost doubled in a year. On 7 August 2006 the accident occurred outside working hours but at a the horrific consequences of a driver being distracted by more general level it demonstrates the need for his mobile phone became clear when John Payne was employers to prevent fatigued drivers from getting jailed for four years after his 7.5 tonne lorry smashed into behind the wheel. a 23 year old woman’s Peugeot, killing her. Through incidents such as this it will surely not be long before No one should underestimate the scale of the task facing society regards the use of hand-held mobile phones employers. One estimate alone is that haulage and whilst driving in a similar fashion to drink driving. distribution companies will have to recruit an additional 43,165 drivers to compensate for restricted hours under There are three steps which employers should be taking: the recent legislation. ■ The introduction of policies covering the use of mobile telephones and driving which should be communicated to everyone and reinforced through Conclusion regular reminders. ■ Work practices should be reviewed so as not to When George Orwell wrote ‘1984’ almost 60 years pressurise staff into feeling that they have to make or ago he anticipated what life in the future would be like receive calls whilst on the road. under a totalitarian government. In the modern age of ■ Due allowance should be given to include time on computers, CCTV, tachographs, mobile telephones, journeys to stop and check messages. satellite tracking and navigation systems, if an incident occurs on the roads it seems as though Big Brother is indeed watching and that there is likely to be a wealth of The Working Time Regulations 1998 data and information which will help to provide a clear (SI 1998 1833) picture of events leading up to it.

The concept of the 48 hour working week is now familiar Furthermore if a road accident occurs during the course to us all. While the moral case for stamping out of employment the employee may well be advised to exploitation and helping to achieve a proper work/life consider whether to try to pass on any element of blame balance was laudable, in practice it does add significantly to his employer. Not only does the body corporate to the administrative burden (and quite likely cost) for therefore face the prospect of a prosecution but there is employers and at the same time many employees would also an increasing focus on prosecuting individual prefer to work longer and earn more. employees, and not just those occupying high office.

More specifically in relation to drivers the Road Transport In both the context of mobile telephones and compliance (Working Time) Regulations 2005 came into force on 4 with the Working Time Regulations it is suggested that April 2005. Whilst the Regulations are extremely complex comprehensive measures should now be taken by and require careful reading by those affected, the general employers if they have not already acted. This will position is that all drivers subject to the EU Drivers Hours undoubtedly require the investment of both time and Regulations now have their working week limited to an money but are these issues that any employer can afford average of 48 hours, calculated over a 17 week period. to ignore? To ensure compliance employers should be accurately tracking (and recording) the working hours of their drivers. Significantly, this extends well beyond heavy goods vehicle drivers to those driving light commercial vehicles or even cars.

The recent successful prosecution of The Produce Connection is an interesting illustration of where the law presently stands. The facts were that an employee, Martin Fiebig, died when his vehicle drifted into the path of an oncoming lorry as he was driving home from work. There was evidence that he had worked 76 hours in the Richard Clarke previous four days and chronic fatigue was believed to be Partner, BLM Stockton-on-Tees

Berrymans Lace Mawer DISCLOSURE • SEPTEMBER 2006 9 Vicarious liability under The Protection from Harassment Act 1997

Majrowski v Guy’s and St Thomas’ NHS Trust (House of Lords – 12 July 2006)

Background the work and alleged harassment for vicarious liability to attach. Prior to the decision in the House of Lords (HL) on 12 July, ■ a course of conduct ie more than a single act claims for harassment were usually brought as claims for of harassment. common law negligence or in the separate jurisdiction of the Employment Tribunal under the discrimination There is a potential argument that one act together with legislation. The decision in Majrowski means that claimants evidence and fear of repetition may constitute a course of now have a further potential route to pursue such claims. conduct but this should be strongly resisted.

Mr Majrowski was employed by the Trust as an audit co-ordinator and alleged that he had been unlawfully Application of the Act harassed by his departmental manager in breach of section 1 of the Act and that the employer was vicariously This decision is likely to lead to an increase in the number liable. The claim was struck out at first instance on the of claims being brought, and current stress at work claims preliminary issue of whether the Trust was vicariously may be amended to include the Act. However, it should liable under the Act and was appealed. HL upheld the not lead to an increase in the number of successful claims Court of Appeal (CA) decision that an employer can if the courts apply the Act in accordance with the views be vicariously liable for such a breach. The matter set out by their Lordships. has now been referred back to the county court for determination of whether on the facts the Trust should Although there is no definition of harassment under the be held liable. Act, Lord Nicholls’s leading judgment makes it very clear that conduct which is simply unattractive, unreasonable or regrettable is not sufficient. The behaviour must be The Act oppressive and unacceptable and the gravity of the misconduct must be of an order which would sustain Section 1 of the Act makes it a criminal act to pursue a criminal liability. course of conduct which a person knows or ought to know amounts to harassment of another and section 3 The test for harassment is based upon what the allows for an award of damages to be made as a result reasonable man would know, or ought to know. of such a breach. A defence is available to employers if This may be very different to the test set out in the they can show that the conduct was for the purpose of employer’s own harassment policy, which often bases preventing or detecting crime, under a rule of law or that harassment on the perception of the ‘victim’ and it was reasonable to pursue the conduct. therefore a finding of harassment under the employer’s internal procedure should not be taken as evidence Under the Act claimants do not need to prove a recognised of liability. psychiatric condition and limitation is extended to six years. However, a claimant does have to prove: Although there is no requirement to prove foreseeability, ■ that the conduct satisfies the definition of harassment. an element of this is introduced into the Act by the ■ that there is a sufficiently close connection between provision that the ‘harasser’ knew or ought to know what

10 DISCLOSURE • SEPTEMBER 2006 Berrymans Lace Mawer they were doing amounted to harassment. The difficulty apportionment of damages should be argued where a for employers is that what they foresaw is irrelevant. number of factors have contributed to the anxiety.

Lord Nicholls conceded that concerns over unmeritorious Insurers will need to carefully consider whether insurance claims being advanced was a real and understandable policies will respond in claims of mere distress and anxiety. concern and courts should identify and dispose of such claims at an early stage of the proceedings. Early One of the main areas of difficulty surrounds the handling application for strike out should therefore be considered. of cases where allegations are made under the Act and in negligence. Solicitors acting for employers will need to Claims may be brought by non-employees as well as ensure that there is no blurring between the causes of employees and this may give rise to public liability claims action. Unless the court clearly distinguishes between for harassment which have not been seen before. common law negligence (which should be decided in accordance with the principles set out in Hatton) and the The time limits could lead to evidential problems in requirements under the Act, there could be a considerable defending these claims. It will therefore be important for watering down of the safeguards. complaints to be properly investigated by employers at the time they occur. If the claimant did not complain to employers at the time the alleged harassment occurred, Comment the courts should be invited to treat the claim with considerable suspicion, particularly if it is pursued many The decision has brought clarity to an uncertain area years after the alleged acts. of law. Whilst it is now clear that employers can be vicariously liable under the Act it is reassuring that their It will be irrelevant to a finding under the Act whether the Lordships set a high threshold of conduct which amounts employer has, and enforces, an anti-harassment policy. to harassment. It should not result in any increase in the This has the rather unfortunate impact that employers number of meritorious claims for which compensation is who take steps to stamp out such behaviour in the deservedly paid but provides clear and welcome guidance workplace will be just as liable as those who fail to act. that the Act is not of general application and has no place other than in serious cases of harassment. There is the potential that employers will seek recovery of any damages awarded from the ‘guilty’ employee who could be joined into proceedings. There is also BLM represented the defendant in Majrowski. the possibility of arguments of contributory negligence if the claimant is considered to have played a part in the harassment.

Although causation may be more difficult to dispute in claims of mere distress, the impact of non-harassment Vanessa Latham related stressors should not be disregarded and Associate, BLM London

Berrymans Lace Mawer DISCLOSURE • SEPTEMBER 2006 11 Medical records in low value PI cases – law of unintended consequences

The problem

Since the introduction of the Civil Procedure Rules in 1999, claimants’ solicitors pre-action conduct has been regulated by the Personal Injury Pre-action Protocol. Amongst other matters, this requires claimants’ solicitors to obtain medical evidence on their client. The Protocol governs how this should be obtained, see paragraph 3.6: Where a medical expert is to be instructed the claimant’s solicitor will organise access to relevant medical records.

The specimen letter contains the following: We are obtaining the notes and records from our client’s GP and hospitals attended and will forward them to you when they are to hand/or please request the GP and hospital records direct and advise that any invoice for the provision of these records should be forwarded to us.

Since 1999, therefore, claimants’ solicitors have been required to ensure that medical experts have access to medical notes when reporting. Strictly speaking, this is not necessary in every case, particularly low value claims.

The result of these changes is that general practitioners and hospitals have become inundated with requests for medical notes. As the maximum fee payable for these is £50, the NHS is losing significant sums because the cost of providing notes greatly exceeds this fee.

The Cabinet Office solution

Ever anxious to reduce cost, the Cabinet Office considered this issue with the ABI, APIL and The Law Society. The result was a ‘best practice’ note contained within a Cabinet Office/Department of Health publication ISTOCKPHOTO.COM/RON HOHENHAUS Making A Difference: Safe & Secure Data Sharing Between Health & Adult Social Care Staff. The text of this guidance rebutable presumption that no patient records will be reads as follows: requested for claims below £10,000. As part of the Cabinet Office initiative to reduce This agreement was reached on the understanding bureaucracy an agreement has been reached between that it takes the form of best practice guidance in an the Law Society, APIL, the ABI and the Health Sector attempt to reduce the bureaucracy involved in lower that, subject to the expert witnesses’ view, there is a value claims.

12 DISCLOSURE • SEPTEMBER 2006 Berrymans Lace Mawer In principle, there is some sense to the agreement. For d) The attitude of general practitioners. There are already example, a low value road traffic accident. If the accident cases of general practitioners refusing access to was genuine, why does a medic need to see the records medical notes where lawyers (for the claimant or of a claimant whose symptoms lasted a month and who defendant) consider it necessary for these to be may not even have attended his GP? reviewed. As the request for notes comes from the claimant himself, refusal to allow access runs contrary As with all good ideas, the agreement has widespread to the EU Data Protection Directive (which forms the potential (unintended) consequences. basis of the 1998 Data Protection Act): members states shall guarantee every Data Subject the right to obtain from the Data Controller; without Status of the agreement constraint, at reasonable intervals and without excessive delay or expense … Despite its description, no formal ‘agreement’ was ever reached between the Law Society, APIL, the ABI What we are left with is an ‘agreement’ that is a problem or the Medical Sector. No draft wording was submitted for claimants, defendants and insurers. In due course, for signature and there is no signed copy of the enterprising claimants’ solicitors and doctors will rely on agreement. Accordingly, its status is that of a Law Society the agreement with a view to withholding notes. Where recommendation. Importantly, it does not bind claimants, insurers consider access to notes is required there will be insurers or insurers’ solicitors. In many respects, therefore, satellite litigation on disclosure and we can look forward the agreement is meaningless. Indeed, one major insurer to months of cases on the subject. has already stated that it does not consider itself to be bound by it. What we are doing about it

The unintended consequences Whilst recognising that the agreement is not entirely without merit, BLM is anxious to avoid its abuse by The agreement itself has only been around for a few fraudsters, over zealous general practitioners and months. Nevertheless, serious consequences have already unhelpful claimants’ solicitors. flowed from it: a) Fraud cases. From long experience, the best evidence The writer is a member of the FOIL Executive. This of a fraudulent claim is almost invariably found in the issue has already been raised with the Cabinet Office, medical notes – eg the claimant who tripped on the APIL, The Civil Justice Council and The Association highway but whose medical notes refer to an injury of District Judges. on a football field. The overwhelming majority of fraudulent claims are worth considerably less than It is vital that this momentum is maintained. If you £10,000. Routine blocking of defendant access to encounter any abuses of the agreement – in particular medical notes will make the fraudster’s life far easier. any instances of the agreement being used to protect b) Defendant medical experts. In those cases where the fraudsters, please e-mail details to [email protected] defendant obtains medical evidence, routine adherence to the agreement will prevent the We need specific examples to demonstrate that the defendant’s medic getting access to the claimant’s unintended consequences of the agreement make it notes. This, in turn, reduces the evidential value of the unworkable and undesirable. With your feedback, we can defendant’s report – particularly if the claimant’s ensure the agreement is applied only to appropriate cases. expert has seen the notes. c) Claimants’ solicitors. The Protocol requires them to obtain their client’s notes for medical reports. If they fail to do so there is always the danger of inadequate evidence or an allegation of negligence. Claimants and their solicitors now face a stark choice – obtain the notes and fall foul of best practice guidance or fail to do so and fall foul of protocol. This issue has also been seized upon by some costs draftsmen who are refusing to pay disbursements (for medical notes) as they argue that claimants’ solicitors do not need to Henry Bermingham obtain them. Partner, BLM Birmingham

Berrymans Lace Mawer DISCLOSURE • SEPTEMBER 2006 13 Schools teach the HRA a lesson or two

It is said that the courts do not make the law, they merely interpret it. During 2006 two cases tested that hypothesis in the House of Lords (HL) and in both cases the Human Rights Act was used to challenge domestic law, in the first on the issue of school uniform and the second on school exclusions.

R(Begum) v Headteacher & Governors of Denbigh advised that the school uniform requirements, the High School (2006) UKHL15 22/03/06 Shalwar Kameez, did not offend Islamic dress code.

This was the high profile case of Shabina Begum, a pupil Three of the five Law Lords thought there was no at Denbigh HS, Luton. The facts were simple. Shabina interference with her rights, particularly because three wanted to wear the Muslim jilbab, contrary to the school’s neighbourhood schools accepted the jilbab. All five dress code. thought that, were there any interference, it was justified.

The school had a high proportion of Muslim children, And that was that, except to say that the HL were staff and governors, and had carefully thought through extremely critical of the CA in its approach. the code, which included the Shalwar Kameez and headscarves, which it deemed appropriate dress for Bingham LJ: Muslim girls aged 11-16. It would in my opinion be irresponsible of any court, lacking the experience, background and detailed Shabina had worn the uniform for the first two years and knowledge of the headteacher, staff and Governors to her older sister had worn it throughout her time at the overrule their judgement on a matter as sensitive as this same school. On the first day of her Year 9 Shabina, … and I see no reason to disturb (the school’s) decision. escorted by her brother and another young man, came to school in the jilbab. On the issue of Protocol 1 Article 2 ‘Right to Education’ Shabina claimed that she had lost two years of education Lord Hoffman: as a result of the case, having been excluded. This was They … were referred to the assistant headteacher … not accepted. Their Lordships felt that the school had the men told him at length and in forceful terms that never excluded her, that all she had to do was wear Shabina was entitled under Human Rights Law to come school uniform or go to a school which permitted the to school wearing a jilbab and that unless she was jilbab. Shabina and her family had chosen that she admitted they would sue the school. Mr Moore told would not attend. Shabina to go home and change.

Shabina sued for a breach of Article 9 of ECHR, her right Abdul Hakim Ali v Headteacher & Governors to manifest her religion, and Article 2, Protocol 1, her right of Lord Grey School (2006) UKHL 14 22/03/06 to education. Although not as well publicised as Begum, Ali was more Article 9 protects both the right to hold a belief A9(1), significant in its curtailing of the scope of the HRA. When which is absolute, and a right to manifest belief 9(2), the CA found a breach of the claimant’s Article 2 Protocol which is qualified. The issue concerned whether the 1 (A2P1) ‘Right to Education’, and remitted the case for school was justified in limiting (or ‘interfering’) with this assessment of quantum, on 29/03/04, the author wrote particular manifestation of the religion. an article entitled Exclusions from school: the HRA creates a new action in damages. This decision of the HL firmly Once the case began, the school took advice from local closes that door and will bring a sigh of relief to schools, and national mosques; and the Islamic Cultural Centre. All LEAs and their insurers across the country.

14 DISCLOSURE • SEPTEMBER 2006 Berrymans Lace Mawer … loses months of schooling, but that (cannot) in this case be laid at the door of the school.

He went on to say crucially that a breach could only occur when ‘a systemic failure of the education system’ had occurred. We can take this as the new standard required for claims of this type.

Lord Scott, whilst agreeing with the above, took their arguments on the second question a stage further. Had there been a breach of domestic law at all? He thought not. He found the school’s action to be ‘not only sensible and reasonable but also lawful.’

There were several strong comments about the current state of the law. Bingham: If as has been found and agreed, the school acted inconsistently with the requirements of domestic law, the inadequacy of the law contributed to that result.

Lord Hoffmann: Baroness Hale agreed with upholding the appeal On … 8 March 2001 there was a fire in an empty but, as usual, brought an interesting twist. She agreed classroom at the Lord Grey School … The fire brigade with Scott up to the date of the CPS decision to drop said that it had been started deliberately and suspicion the prosecution. Then she found the school’s actions fell on three boys who had been seen running away … unsatisfactory and concluded, as had the CA, that there After an investigation by the police the boys were had been a breach of A2P1. She believed that a declaration charged with arson. should have been made to that effect. However, she did not believe that the breach sounded in damages, At this point the school excluded them pending police so she dismissed the claimant’s action, overturning enquiries. the CA decision.

School exclusions are normally ‘fixed term’ (up to 45 days When Ali and Begum are added to R (Williamson) v per year) or ‘permanent’ (ie expulsion). It was found at Secretary of State for Education and Employment [2005] the CA that once the 45 days expired on the 7 June 2001 2 AC 246, (caning in schools case), the three cases offer the ‘indefinite exclusion’ was unlawful. The HL a sourcebook of European Human Rights Law which is respectfully disagreed. essential reading for anyone in this field.

The judgement asked (1) did this breach of domestic law More significantly they are a major setback for those constitute a breach of A2P1? (2) was there a breach of seeking to use the HRA as a vehicle to expand liability in domestic law at all? the domestic courts beyond current limits, and the days of using the HRA in its wider context in this way may Lord Bingham could not accept that a breach to A2P1 well be numbered. could apply to an individual school. It had to apply to the educational service as a whole.

Lord Hoffmann agreed and also disagreed with the CA’s finding that the primary responsibility to educate the child fell to the school. Like Bingham, he felt that the school and/or LEA had offered basic provision. This meant there was no breach of A2P1. The HL decision balances any perceived fault of the school with that of the family’s prevarication and refusal to consider alternatives when offered them. Roy T Woollard FRSA as soon as they made up their minds, a place … was Former Headteacher, promptly found. It is a matter for regret when any pupil Solicitor, BLM Leeds

Berrymans Lace Mawer DISCLOSURE • SEPTEMBER 2006 15 Use of defence counsel in minimising PL risk

The title of this article could also have been ‘three days, four nights and 500 product liability lawyers in Las Vegas’. It deals with some of the lessons learned.

Those who handle product liability cases for manufactures minimise claims occurring in the future. or suppliers, be they in-house or external counsel, or their insurers, understand the worldwide exposure to risk, Basic questions will include: claims and litigation. 1) What product was involved? 2) What were the facts behind the event? The litigation process will expose the manufacturer 3) What failed or went wrong? together with its product and processes to close scrutiny 4) What other factors may have caused or contributed through discovery, witness evidence, expert testimony to the incident? and ultimately trial. 5) What can be done to prevent this happening again?

The DRI focus is clearly within the American jurisdiction Increasingly, based on the author’s personal experiences but concentrated efforts are now being made to expand and evidenced at the conference, education is becoming its involvement beyond the US and a particular emphasis fundamental to the client/lawyer relationship. The more is upon Europe. The author was able to observe and join the engineers/designers and claims handlers understand in debate with US and other international lawyers over about the process, the risks and the state of the law, the these three days. better the chance of successfully defending the product.

The principal features which stood out as common to us all, whatever the jurisdiction, are: The lawyer as adviser ■ Risk assessment/reduction. ■ Costs. It follows that if the lawyer is involved effectively in the ■ Balance in the use of in-house and external counsel. education process, then that input into product development becomes significant. This third category should see an effective lawyer as teacher, adviser and critic. Given what we have said with regard to education, it is clear that the lawyer can take an active part in product design as a support to the design and development team. Lawyer as teacher It was interesting to note at the conference the significant involvement of in-house counsel. By way of example, it The lawyer has become a specialist in his field as he deals was very clear that the active involvement of counsel, with numerous clients and has wide experience. Much of based both on their own experiences and involvement that experience comes from employing his or her ability to with external counsel, enabled the client to be highly ask searching questions and investigate effectively. This effective in the quality of risk management and quality experience and claims involvement means the lawyer is control decisions. one of the manufacturers or suppliers most effective assets in helping to assist them and their representatives in the Proactive risk management with regard to hazards will be claims investigation process. It may sound fairly trite but particularly effective in designing and guarding against the lawyer can advise on why a case has been won or lost the hazard and in producing effective warnings by asking what evidence and witnesses helped win the concerning the inevitable dangers which remain within case, where were the gaps and what had been missed? All the product. As adviser, the lawyer can have specific input this should be the bedrock to the claims investigation into any decision making taken by the manufacturer or process. Perhaps more importantly, it identifies measures supplier. Some of the more obvious areas identified for and steps to be put into place to prevent or at least lawyer involvement are:

16 DISCLOSURE • SEPTEMBER 2006 Berrymans Lace Mawer 1) Creation of instructions, manuals and other user development and risk but the proactive involvement of materials. the lawyer cannot be understated. 2) Familiarity with design protocols employed by other manufactures with similar products. ‘But the expense?’ will be the inevitable question. As 3) The importance of documenting the process both in already noted, cost is one of the major drivers in terms of manufacture, process and function given the corporate decision making. What should underpin inevitability of disclosure within the claims process. the lawyers involvement is trust between lawyer and client. Effective roles in education, advice and In short the lawyers role as adviser is crucial in weighing constructive criticism will go a long way to achieving up hazard versus risk. an appropriate balance.

The lawyer as critic The author is a member of the American based ‘DRI – The Voice of the Defence Bar’ and has recently An effective product defence lawyer can bring to the joined the Product Liability Committee and International product his experience with claimant lawyers, judges and Law Committee. potential co-defendants. This experience will test the effectiveness of the product in the context of an increasingly sophisticated claimant culture. The role set out for the lawyer as teacher and adviser can be effectively supplemented by the lawyer as a critic. The strength of the defence case in any product liability claim must be assessed and challenged at an early stage. Clearly the Chris Coughlin inevitable balance has to be struck in terms of product Partner, BLM Leeds

Berrymans Lace Mawer DISCLOSURE • SEPTEMBER 2006 17 Exploring excluded liability under the Road Traffic Act 1988

The claimant and his brother, the first defendant, were out with a friend, Ryan Baird. Ryan drove them to a party in a vehicle owned by his then employers, MEL Ltd. Ryan had too much to drink, and so it was agreed that the first defendant, who had never driven a vehicle on a public road and did not even hold a provisional driving license, would drive the vehicle.

On the journey, the first defendant lost control of death of or bodily injury to any person or damage to the vehicle – it collided with a stone wall. The two property caused by, or arising out of, the use of the passengers were thrown out of the window. The claimant vehicle on a road in Great Britain. was seriously injured, and issued proceedings against his brother. The claimant’s claim was one covered by section 145, and, at first blush, was a liability which Aioi would Of course, judgment against the brother alone would have to meet. not have been worth anything – he could not afford to meet such a large claim. The claimant was expecting that However, section 151(2)(b) does not require a motor the insurers of the vehicle would meet the claim in insurer to satisfy a judgment in respect of an ‘excluded accordance with their obligations under the Road Traffic liability’ as defined by section 151(4) as: Act 1988, MEL Ltd (MEL), the owner of the vehicle, had a liability in respect of the death of, or bodily injury to, arranged insurance for the vehicle with Aioi Insurance or damage to the property of any person who, at the Company of Europe (Aioi). Accordingly, the proceedings time of the use which gave rise to the liability, was named Aioi as second defendant. allowing himself to be carried in or upon the vehicle and knew or had reason to believe that the vehicle had Section 151(2) of the Road Traffic Act 1988 (the Act) obliges been stolen or unlawfully taken. a contractual insurer to satisfy any judgment: a) relating to a liability with respect to any matter Aioi argued that the circumstances of the accident where liability with respect to that matter is required fell within this exception. The claimant was a passenger to be covered by a policy of insurance under Section who knew or had reason to believe that the vehicle in 145 of this Act and … which he was being carried had been stolen or unlawfully b) it is a liability, other than an excluded liability, which taken, and nevertheless had allowed himself to be carried would be so covered if the policy insured all persons as a passenger. … and the judgment is obtained against any person other than one who is insured by the policy ... The argument was that the claimant’s brother, the first defendant, did not have MEL’s permission to drive Accordingly, Aioi would only be required to satisfy a their vehicle. The motor policy issued by Aioi provided judgment obtained against the claimant’s brother if the cover when it was being driven by someone who liability was one which had to be covered under the a) had attained the age of 25, b) held a driving licence, policy, as required by section 145 of the Act. and c) had been permitted by MEL to drive it. The MEL employee who had been permitted to drive the Section 145(3)(a) of the Act states that a motor policy: van was Ryan Baird. At the time of the accident, the first must insure such person, persons or classes of persons as defendant was only 17 years old. He had never been may be specified in the policy in respect of any liability employed by MEL, and MEL had not permitted him to which may be incurred by him or them in respect of the drive the vehicle.

18 DISCLOSURE • SEPTEMBER 2006 Berrymans Lace Mawer At a trial of the preliminary issue of whether the Aioi The court therefore held that the first defendant’s policy should meet any judgment obtained against the liability for the claimant’s injuries was an ‘excluded brother, the court held that Ryan Baird knew that only he liability’ within the meaning of section 151(4) of the Act, had permission to drive the vehicle and that he had not and therefore that Aioi was not required to indemnify the been authorised by MEL to give the first defendant first defendant. permission to drive it. By allowing the first defendant to drive, Ryan was appropriating the vehicle to his own This important decision demonstrates that close scrutiny use in a manner which repudiated the rights of MEL, of motor policy details may result in avoiding liability and he was assuming control of the vehicle for his own under the Act. purposes. He had therefore ‘unlawfully taken’ the vehicle within the meaning of section 151(4). The court further held that the same was true for the claimant’s brother. In this case BLM acted for Aioi Insurance Company of He had neither the consent nor the authority of MEL to Europe. drive the vehicle.

Finally, the court held that, if the claimant had applied his mind to the issue, he would have known his brother was not permitted to drive the vehicle as he had never driven on a public road and did not have a David Brown driving licence. Partner, BLM London

Berrymans Lace Mawer DISCLOSURE • SEPTEMBER 2006 19 Racing ahead: premature issue and predictable costs

In a climate of increasing claim costs the practice of some solicitors in the handling of fast track motor claims is under scrutiny. Patterns are emerging whereby proceedings are, both unintentionally and deliberately, being issued prematurely in breach of the pre-action protocol with no real intention to negotiate settlement. This results in a pecuniary advantage in that solicitors then seek to avoid the predictable costs regime and obtain standard costs.

The practice generally involves situations where the ■ issuing proceedings when the medical prognosis is insurer is unable to value the claim such as: uncertain and then seeking permission for further ■ a failure to disclose all relevant heads of claim and medical evidence. documentation prior to issue. ■ rejection of the insurer’s initial offer and immediate issue without any form of negotiation. ■ submitting unrealistic offers such that settlement cannot be achieved. ■ On the 22nd day after disclosure of the medical evidence issuing proceedings if there is no response from the insurer with no attempt to put forward any offer chasing an offer from the insurer.

It is only once proceedings are issued that the solicitors negotiate settlement and in many cases accept offers which are only marginally higher than the insurer’s initial offer or marginally lower than their own. It is evident that a genuine willingness to negotiate would have settled these cases prior to issue and such conduct serves only to increase the costs burden of insurers. In some cases the additional costs claimed are in the region of £5,000-10,000.

Pre-action protocol

We must continually remind ourselves of the personal injury protocol and utilise these ‘tools of the trade’. The protocol promotes: ■ a ‘cards on the table’ approach in which the court will expect to see reasonable pre-action behaviour applied in all cases with a view to avoiding proceedings (2.4). ■ the claimant sending to the defendant as soon as practicable a schedule of special damages with supporting documents (3.14). ■ ISTOCKPHOTO.COM/FRANC PODGORSEK the claimant organising excess to the relevant medical

20 DISCLOSURE • SEPTEMBER 2006 Berrymans Lace Mawer records to the medical expert (3.16). ■ early disclosure of medical reports, where liability is admitted, and the claimant should delay issuing proceedings for 21 days from disclosure of the report (5.1). ■ the parties making settlement offers pre-proceedings (5.2). ■ the view that litigation should be a last resort and that claims should not be issued prematurely. Parties are warned that if the protocol is not followed then the court must have regard to such conduct when determining costs (2.16).

Costs

Where such practice is identified the conduct and costs issues should be fully pleaded in the defence. Effective pleadings strengthen the defence and alert the judiciary to the central issues.

The court has a wide discretion to deal with costs in a just and equitable manner. It is important to fully understand the court’s powers in assessing costs. The court has a wide ranging discretion to award costs on a flexible basis, challenging the simple win/lose dichotomy. In deciding

what order, if any, to make about costs: ISTOCKPHOTO.COM/GIUSEPPE GRAZIANO ■ The court must have regard to all the circumstances, including the conduct of all the parties, whether a party has succeeded on part of his case, even if he has make effective use of the protocol, continuously educate not been wholly successful; and any payments into the claimants’ solicitors as to their obligations under the court or admissible offer to settle made by a party protocol, implement effective recording of pre-action (CPR 44.3(4)). settlement offers and confirmation they have been ■ The conduct of the parties includes conduct before, as received, show a clear willingness to negotiate, comply well as during, the proceedings and in particular the with the protocol periods and have an effective diary extent to which the parties followed any relevant pre- management system. action protocol (CPR 44.3(5)(a)). Continued vigilance and effective case management In the words of Lord Justice Longmore in Painting v will serve to reduce the claim’s costs burden, educate University of Oxford, CA: the judiciary of such practice and check the progress of negotiation is supposed to be a two-way street … a this trend. claimant who makes no attempt to negotiate can expect … the court to take that into account when making the appropriate order as to costs.

Summary

We must be alert to prematurely issued proceedings and the increased costs burden of such practices. It is important to remember that when running conduct arguments the defendant must do so with ‘clean hands’. It is difficult to succeed in the defence of these cases if one’s own conduct is open to criticism. In the Nathan Jones management of motor fast track cases it is important to Solicitor, BLM Manchester

Berrymans Lace Mawer DISCLOSURE • SEPTEMBER 2006 21 Fairer Public Inquiries?

Following concern over the transparency and cost of recent public inquiries (and criticism over ‘government by inquiry’), the last two years have seen inquiry procedure overhauled, starting with the Inquiries Act 2005 and culminating in the Inquiry Rules 2006 which came into force on 1 August 2006. While the Rules will act as a statutory guide for chairmen of inquiries ordered by ministers, they will also undoubtedly provide a framework for ad hoc inquiries called by public authorities. But will the new framework succeed in ensuring fairness and reduce challenge by judicial review?

The government’s aim has been to modernise the the straightjacket of the court process. At the same time, procedure, such as it was, and to make the process the process must safeguard the rights of those involved. accountable whilst at the same time retaining the flexibility which has been the strength of successful In the past, the Salmon Principles (which stemmed inquiries. If an inquiry is to investigate sensitive issues from the 1966 Royal Commission on Tribunals of Inquiry properly and produce useful proposals for reform, allay chaired by Lord Justice Salmon) sought to provide public fears and improve public services, there must be a a framework to protect the interests of witnesses degree of informality in the procedure which will avoid and parties to an inquiry. In essence, the new Rules

22 DISCLOSURE • SEPTEMBER 2006 Berrymans Lace Mawer replace those broad guidelines as to fair proceedings, While the introduction of the Rules is to be welcomed as a criticised both for their lack of clarity and for being clarification of best practice and guidance, the inherent unnecessarily adversarial. flexibility of the process operating in a politically charged and emotive environment makes access to legal advice Section 41 of the Inquiries Act 2005 provided for the critical. Individuals whose jobs and reputations will be making of the new rules to cover three particular affected by the outcome of an inquiry need experienced areas; matters of evidence and procedure; records legal representation to ensure the best presentation of management after the end of the inquiry; and awards their evidence – it is often the case that inquiry panels and expenses to those involved in an inquiry. Section are seen to rely upon their preconceptions rather than 17(3) also provides an overarching requirement that a pursuing empirical evidence. chairman ‘must act with fairness’ and must also have regard to the need to avoid unnecessary cost. The Those who are involved in non-statutory or ad hoc expense of funding inquiries has been a repeated inquiries will look to the new rules for guidance although criticism – the Bloody Sunday Inquiry, eight years they will not be bound by it. Representatives of parties on, has already cost a reported £175million. involved in such informal investigations should consider the new rules when formulating their arguments as to The aim of the Rules is to provide a framework whereby process. Public authority insurers will also take note of the a chairman may exercise his discretion (the Rules are a requirements as to publication of reports and the mixture of prescriptive and permissive) in order to ensure potential legal vulnerabilities recognised by the Law that the proceedings move swiftly without unnecessary Commission Report In the Public Interest: Publication of cost while ensuring that the newly designated ‘core Local Authority Inquiry Reports (2004) which has yet to be participants’ have proper legal protection. A core formally addressed by government. participant will be identified by the chairman depending on whether the person played or may have played a While a broad framework for inquiry procedure is now direct and significant role in relation to the matters to in place as a result of the Inquiries Act and the Rules, which the inquiry relates, has a significant interest in the there is still very wide discretion on the part of the inquiry’s subject matter or may be subject to explicit or inquiry chairmen to act as they consider necessary. significant criticism. In a hostile atmosphere where media and public seek to lay blame, the successful completion of inquiries still Joint representation of the core participants is provided depends upon sound management by an inquiry team for where appropriate, thus avoiding unnecessary and firm, sensible representation of core participants involvement of legal teams – a regular criticism in the by their lawyers. Whether the new rules will provoke past. The Rules also provide for the obtaining of evidence greater transparency and less judicial review of decisions and the requirement as to questioning of witnesses and appears doubtful. core participants. Procedure as to sending ‘warning letters’ to those who may be, or have been, criticised during the inquiry proceedings or in the inquiry report is Berrymans Lace Mawer acted in the inquiry into the death also set out. The intention is to enhance the inquisitorial of Zahid Mubarek in Feltham Young Offenders Institution nature of inquiries and provide powers which will enable and acted on behalf of the Commissioner of Police of the chairmen and inquiry panels to pursue their investigations Metropolis during the Morris Inquiry into professional by means which they consider appropriate. standards and employment matters in the Metropolitan Police Service. The firm participated in the DCA’s The publication of reports has on occasion been consultation process for the Inquiry Rules 2006. problematic. Leaking of the conclusions was a feature of the report produced by Lord Hutton whilst in other inquiries highly sensitive information has been mistakenly published necessitating the destruction of inquiry reports following publication. While the drafters of the rules have required that the core participants and legal representatives should have access to the report in advance of publication, the government has resisted putting a time frame into the rules and this will be left to the discretion of the panel. Inevitably this places the onus on the inquiry team to ensure that the process of Jim Sherwood publication is safely negotiated. Partner, BLM London

Berrymans Lace Mawer DISCLOSURE • SEPTEMBER 2006 23 Funding of care and accommodation

The debate continues as to the extent to which the claimant should look to the state, rather than the defendant, to fund the cost of care and accommodation. In Sowden v Lodge & Crookdake v Drury [2004] EWCA 1370, the Court of Appeal accepted that if the claimant’s needs were met by public funds, there is no loss. However, the burden of proving that it is unreasonable for the claimant not to avail himself of public funding is on the defendant. In two recent cases, Crofton v NHSLA (19/1/06) and Freeman v Lockett (7/2/06), in each of which the severely injured claimant was receiving statutory funding at the date of trial, the courts reached different conclusions as to whether the availability of such funding should operate so as to reduce the damages recoverable from the defendant.

In Crofton, the claimant was resident and cared for in therefore received full damages for the cost of private Meadowbank, a facility for disabled people, funded by care, with no deduction for the possibility that she may Hampshire County Council. His Honour Judge Reid QC receive statutory funding in addition. To avoid any accepted the claimant’s case that it was reasonable for possibility of double recovery, the claimant offered to give him to leave Meadowbank and to move into private care, an undertaking that she would withdraw her application at a cost of £122,602 per annum. Evidence was given by a for local authority funding, but the judge regarded an representative of Hampshire that it would continue to undertaking as undesirable. have obligations to provide for the claimant, which would not alter simply because the claimant left Meadowbank. Cases of this nature are fact-specific, and dependent on The judge found that the likelihood was that Hampshire the evidence and the impression given to the judge. would continue to pay the equivalent cost of the care the However, some general conclusions can be drawn from claimant was receiving at Meadowbank, which he these two cases. assessed at £68,018 per annum. This sum was set off against the sum of £122,602, so the annual sum for care It is desirable to provide as much evidence as possible as allowed in the award for damages was £54,584. The to the availability of funding, both now and in the future. defendant had offered the claimant an indemnity against In Freeman, no direct evidence was called from the local any shortfall in funding by the local authority in the authority, the defendant apparently taking the view that future. The claimant had declined that indemnity, and the the fact that the claimant was and had for some time judge did not require it to be given. been receiving direct payments from the local authority was the best evidence that could be provided. However, In Freeman, the claimant was receiving direct payments this enabled the claimant to point to the uncertainties from Hertfordshire County Council of £50,416.08 per surrounding the availability of such funding in the future. annum. She was living in private accommodation with a In Crofton, on the other hand, a representative of the local live-in carer and other support. The defendant argued authority, who the judge described as a ‘frank and that the court should conclude that at least part of that extremely helpful witness’ was called to give evidence payment would continue to be made, so that the and was able to deal with any queries that arose. damages awarded for the cost of future care should be reduced accordingly. Tomlinson J made it clear at the In Freeman, the judge pointed to the fact that the beginning of his judgment that he was not attracted by defendant’s insurers ‘were not prepared to offer to the that argument, and duly rejected it. He was influenced in claimant an indemnity in case her current local authority particular by the lack of any certainty as to the level and funding should in the future be withdrawn or reduced. availability of publicly funded services in the future, and They wished in that regard to cast on to the claimant the the restrictions this would place on the claimant (would entirety of the risk, whatever it may be.’ In Crofton, on the she always have to live in Hertfordshire?). The claimant other hand, although the judge did not require an

24 DISCLOSURE • SEPTEMBER 2006 Berrymans Lace Mawer indemnity to be given, the fact that one had been offered It is understood that Crofton is being appealed. As things (and declined by the claimant) cannot have harmed the stand at present the cases demonstrate that this is still a defendant’s case. live issue in cases involving serious injury. Judges are naturally reluctant to give the defendant’s insurers a The availability of useful evidence from the local authority ‘windfall’ by reducing the claimant’s damages, but if may be somewhat problematical, depending upon how appropriate evidence can be called, and if appropriate co-operative the particular authority is willing to be. indemnities are offered, there is still every possibility of However, there is nothing to prevent defendants’ insurers the defendant’s argument being accepted. from offering an indemnity in any suitable case. This could be, for example, by way of an offer to make up the shortfall should local authority funding cease or reduce in the future; or by agreeing to pay care costs in full in exchange for an undertaking by the claimant to seek funding from the local authority and to account to the defendant’s insurers for whatever sums are received. The latter is likely to be more attractive to claimants (and conversely less attractive to defendants), but the precise form of any indemnity will be a matter for negotiation Michael Hardman and will depend upon the strength of each party’s case. Partner, BLM Liverpool

Berrymans Lace Mawer DISCLOSURE • SEPTEMBER 2006 25 Abuse claims: the end of the road for Stubbings v Webb?

A father will defeat a claim for a deliberate tort, in the nature of abuse, if six years has elapsed since his daughter attained majority; yet a claim against the mother, for negligent care of the child in allowing the abuse to take place, is the subject of both date of knowledge arguments under section 14 and a discretion pursuant to section 33 of The Limitation Act that may lead to the case proceeding. This stark and thorny issue of time limits in abuse cases has attracted much publicity in both legal and lay press. Judgment in three cases, reinforcing the position was handed down by the Court of Appeal (CA) in April this year. The cases X & Y and Others v London Borough of Wandsworth and Others, are proceeding to the House of Lords (HL) where we shall see the principle tested again.

This is not a dry academic debate. The Law Commission tort of trespass, notwithstanding personal injury having referred to it as leading to: been sustained. … the anomalous result that a claimant who has been sexually abused by her father may have longer to bring The three appeal cases in X & Y involved four claimants all a claim for damages against her mother for negligently of whom brought actions outside the six year period for failing to prevent the abuse than to bring a claim bringing actions based on trespass. All brought claims against her father for actually committing the abuse. based on vicarious liability save for the case of A v Hoare. In that case the claimant was subjected to an attempted Essentially claims for physical or sexual assault are rape by the defendant in 1988. In 2004 he won £7 million brought either in negligence – breach of a duty of care on the National Lottery and hence he was no longer a as a result of, say, systems failures such as negligent ‘man of straw’. All four claimants appealed the first recruitment – or on the basis of vicarious liability for the instance finding that their claims should no longer be perpetrator’s acts, the last cause of action being of limited allowed to proceed. Their principal submissions were: use whilst the limitation principle set out remains the law. ■ The decision of the HL in Stubbings should no longer be followed because it was either wrong or could be The relevant framework for limitation in cases of distinguished because the abuser committed physical and sexual abuse is provided by the Limitation concurrent breaches of his duty of care. The CA held Act 1980 and the case of Stubbings v Webb [1993 AC 498]. that Stubbings was binding on them and it was a matter Section 2 of the 1980 Act provides for a limitation period for the House of Lords to decide whether it wished to of six years in respect of actions for tort. Section 11 review the decision. However, a view was expressed provides that in cases of negligence where there is that there was a powerful argument for bringing claims personal injury the limitation period expires three for trespass within the umbrella of the extendable three years from the date the cause of action accrued or the year limitation period under sections 11 and 33 of the claimants ‘date of knowledge’. Section 14 identifies Limitation Act. how the ‘date of knowledge’ is to be established and ■ The decision in Stubbings should not be followed section 33 gives the court a discretion to extend the because section 11 (1) of the 1980 Act should be three year period. In Stubbings the HL held that a construed differently in light of the need to give effect claim based on an intentional sexual assault is subject to legislation in a way in which was compatible with to a non-extendable six year limitation period, as the the Human Rights Act. This was rejected by the CA

26 DISCLOSURE • SEPTEMBER 2006 Berrymans Lace Mawer because the six year limitation period had expired then all the claimant will need to show is that firstly before the HRA came into force. the abuse took place and secondly that essentially the ■ The decision in Stubbings did not apply to a claim abuser was employed in some form of caring role against a public authority. This was rejected by the by the defendant. In that case vicarious liability will be CA, it was illogical to draw a distinction between an established. His remaining hurdle will be to establish that abuser’s deliberate acts and the local authority’s he did not have the requisite date of knowledge until vicarious liability for those acts. three years before the issue of proceedings which may well be when he was in possession of a medical report for Which way will the HL decide? It is clear from the CA’s proceedings. That is not an insurmountable task in the comments that they would have preferred to impose an current climate. extendable three year period for acts of deliberate abuse. Had they not been constrained by authority they might These potential developments may lead to a revival in well have done so. historical abuse claims. Insurers’ payouts may increase as a consequence of the lowering of the bar for claimants In 2001 the Law Commission reviewed the law in relation but there may be issues of social justice which would be to limitation periods and its recommendations included a satisfied by such a change; there is a clear injustice in a provision that acts of intentional trespass should be convicted lottery winner escaping a liability to pay subject to the same discretionary regime as is applied by damages on the basis of what a lay person may consider courts in personal injury claims based on negligence. The to be a highly technical point. CA in X & Y considered that ‘justice would be far more simply achieved ... if Parliament were to simplify the law It seems clear that the forthcoming months will be a along the lines the Commission recommended’. The critical time for claimants and defendants involved in Commission’s recommendations were not enacted by abuse claims. In a time when the perpetrator is to be Parliament and perhaps there is a lack of political will. accountable will the anomaly be allowed to remain?

If the HL reverses the decision in the CA then this is grim news for defendants. Anecdotal evidence has suggested that there has been a tailing off of historical abuse claims in the last couple of years. However, if a claim based on vicarious liability is subject to an extendable three year Jeremy Davies limitation period, rather than an absolute six year period Partner, BLM Manchester

Berrymans Lace Mawer DISCLOSURE • SEPTEMBER 2006 27 Witness immunity: what would you do?

Scenario

You are dealing with a case which is dependent on expert opinion. You decide to obtain a report from a medical expert. You send detailed instructions. The claimant is examined and an impressive report arrives which advises that the claimant should make a full and complete recovery within 12 months. He only needs a limited amount of care and assistance during that time after which a return to full time employment is anticipated. Wonderful advice. Your reserve is adequate and you rely upon the report which is exchanged for your opponent’s report. What a surprise! You find the experts have reached totally different conclusions. The expert for the claimant is advising he is unlikely to make a full recovery, will require future care and assistance, and at best might only get back to some part time work.

To comply with a court order the experts meet, discuss and produce a joint statement. You receive a copy of the signed joint statement. Reading this brings a further shock. The defence expert has completely changed his opinion and he now entirely agrees with the expert for the claimant. You break into a cold sweat and start thinking about adding several noughts to the reserve. You think of certain things you might like to do to the expert. Upon reflection you decide to telephone the expert to ask him to explain why he has changed his opinion. The expert tells you that when he dealt with the meeting for the preparation of the joint statement he had not properly reviewed his file. He admits to having made a mistake with his conclusions. In this scenario, what are your options?

28 DISCLOSURE • SEPTEMBER 2006 Berrymans Lace Mawer Can you sue?

The principle of witness immunity from suit in civil proceedings is documented in Stanton v Callaghan [1999] 2WLR 745 which put the solicitors in an unenviable position whereby the balance weighed in favour of the expert witness when they ‘changed’ their opinion. Mr Justice Collins in Meadow v GMC [2006] EWHC 146 (Admin) appeal judgement stated: ‘… he made one mistake, which was to misunderstand and misinterpret the issues’.

Immunity from suit even extends from the honest to the dishonest witness. This is because the principle of witness immunity is based on public policy which aims to protect witnesses – both expert and lay, from fear of reprisal when evidence is given in court or in reports prepared for the purpose of giving evidence in court, as in Evans v London Hospital Medical College [1981] 1 WLR 184 and X (Minors) v Bedfordshire County Council [1995] 2 AC 633.

So it is unlikely that you would be able to successfully sue the expert. However, practical alternatives may be available to the disgruntled solicitor. For instance: ■ Seek to recoup some of the client’s outlay. In Phillips v Symes [2004] EWHC 2330 it was held that the courts have the discretion to award a litigant’s costs against an expert witness where there was a gross dereliction of duty or the evidence given at trial was reckless. In this case the defendant expert was joined as a party to the proceedings and ordered to pay over £400,000 in legal costs. ■ Tufano v Vincenti [2006] EWHC 1496 (QB) restated the point made in R v Kellett [1976] 1 QB 372 and Conclusion R v Patrascu [2004] 4 All ER 1066, that in certain circumstances it may be appropriate to approach a Practical alternatives need to be considered and common witness or seek to persuade him to change his evidence sense revisited. In one of our cases a full reimbursement if it is genuinely believed that it is misleading or false. A of the expert’s fees was agreed. In practise this is likely to cautionary note may need to be sounded in relation to be one of few cost-efficient and risk-free options open to the exercise of this option to avoid falling foul of section the defendant solicitor. 35.3 of the Civil Procedure Rules 1998 (as amended). That said, the balance may soon be redressed through the outcome of the appeal of Mr Justice Collins’ Can you complain to the GMC? decision in Meadow.

The Meadow appeal judgment effectively answered ‘no’ and made it clear that immunity from suit extends to immunity from disciplinary proceedings – unless the judge before whom the expert gives evidence decides that the conduct and/or evidence in question is sufficiently serious to merit referral to a disciplinary body. The impact of this ruling was to confine the authority to call a witness’ evidence and conduct into question to the court to whom the expert owes the ‘overriding’ duty (section 35.3 of the Civil Procedure Mike Brown Rules 1998 (as amended)). Partner, BLM Manchester

Berrymans Lace Mawer DISCLOSURE • SEPTEMBER 2006 29 Examining documents: applying best practice

It is common in personal injury cases for defendants’ solicitors to come across inconsistent statements in the claimant’s medical or occupational records. Lord Justice Buxton’s comments in Denton Hall Legal Services v Fifield [2006] EWCA Civ 169 are therefore a useful wake up call to ensure that a careful examination of the relevant documents and records takes place at an early stage in the litigation, that appropriate steps are taken in accordance with the Criminal Procedure Act 1865 and that civil evidence procedure is correctly followed.

30 DISCLOSURE • SEPTEMBER 2006 Berrymans Lace Mawer As an example, Mrs Fifield claimed for damages after of hearsay evidence for example by deliberately failing to contracting a Work-related Upper Limb Disorder (WRULD) give notice, by giving late or inadequate notice or by following an increase in her workload as a secretary at relying on hearsay evidence rather than calling a dubious Dentons – a firm of solicitors. witness to court.

Part of Dentons’ defence was that Mrs Fifield’s injuries had Alternatively a party can prove a previous inconsistent not been caused by her work. They relied on statements statement by calling the witness to the statement to court that she had made about the onset of her symptoms to give oral evidence. However, this might be expensive. which were contained in her medical records. They also Furthermore the witness may not have an independent relied on what Mrs Fifield told their medical expert about memory of the statement especially if (as in Mrs Fifield’s the onset of symptoms when she saw him for the case), he is a doctor who might hear any number of purposes of a medico-legal report. The entries in the statements made by patients in any given working day. records and the history that she had given suggested that her symptoms arose in 1998 despite the fact that her The procedure suggested by Lord Justice Buxton reflects workload did not increase until 1999. Dentons argued sections 4 and 5 of the Criminal Procedure Act 1865 which that the onset of symptoms could not therefore be related was preserved by section 6 of the Civil Evidence Act 1995. to the increase in workload. Section 6 of the Civil Evidence Act 1995 also makes it clear that if the witness admits that he made the inconsistent This aspect of the defence did not succeed, Mrs Fifield statement or it is subsequently proved that he made it, won her case and was awarded substantial damages. that statement is admissible not merely as evidence of inconsistency but also as evidence of the truth of its In the course of the appeal by Dentons (which contents – Lord Justice Buxton did not make this clear in also failed) Lord Justice Buxton criticised the way in his comments in the judgment. which they had used the evidence about the onset of Mrs Fifield’s symptoms at trial. He suggested the Lord Justice Buxton indicated that failure to carry out the following pre-trial procedure designed to address this correct procedure might result in sanctions including: issue namely: ■ The trial judge may be reluctant to permit reference to ■ A party who seeks to contradict a factually pleaded reports of the patient’s statements in the medical case on the basis of medical records or reports records for the purposes of contradicting the evidence. should indicate that intention in advance either by ■ If there is unreasonable failure to admit that such amendment of his pleadings or by informal notice. statements were made to the extent that it is necessary ■ The opposite party must indicate the extent to to call a doctor in order to formally prove them, which they take objection to the accuracy of then such failure of co-operation is likely to be the records. penalised possibly severely in costs – in Mrs Fifield’s ■ When the area of dispute is identified, a decision will case a failure to co-operate would have meant bringing then be taken as to whether the records need to be a number of busy doctors to court to try to prove formally proved. various documents.

Records of previous inconsistent statements such as those In addition to the correct examination of documents, described in Mrs Fifield’s case, are hearsay evidence. a timely forensic examination of records can be a However, the Civil Evidence Act 1995 allows for the use of useful way for a defendant’s solicitor to obtain a clear hearsay evidence in civil proceedings. picture of the circumstances surrounding a case at an early stage. The records could therefore be adduced as hearsay evidence by giving notice of an intention to do so. The notice should identify the hearsay evidence, state that the party serving the notice proposes to rely on the evidence at trial and give the reason why the relevant witness will not be called.

Part 33 of the CPR contains the rules governing the use of such notices and section 4 of the Civil Evidence Act 1995 provides a number of guidelines on the weight to be given to hearsay evidence by the court. The rules and the Henry Kirkup guidelines operate to deter parties from abusing the use Partner, BLM Leeds

Berrymans Lace Mawer DISCLOSURE • SEPTEMBER 2006 31 Bolton v MMI – Clarity or confusion for asbestos cases

The judgment of the Court of Appeal (CA) delivered on 6 February 2006 in the case of Bolton Metropolitan Borough Council v Municipal Mutual Insurance Limited (1) and Commercial Union Assurance Company Limited (2) has clarified some aspects of asbestos litigation but there are more questions to be answered and in all probability further litigation.

Gordon Green was negligently exposed to asbestos when Engineering Plc (CME) from 1965 to 1970 and after 1973. working for a firm of electrical contractors between 1960 He died in November 1991 and his widow’s claim against and 1963 helping to construct a Teacher Training College both Bolton and CME was settled with each defendant being built by Bolton Metropolitan Borough Council paying half of £160,000. Bolton then sought to recover its (Bolton) and when employed by Carnaud Metalbox outlay from its PL insurer. ISTOCKPHOTO.COM/DAN BANNISTER

32 DISCLOSURE • SEPTEMBER 2006 Berrymans Lace Mawer The doctors in the case agreed that the symptoms of the tumour is first created or when symptoms first occur. mesothelioma started in August/September 1990 and that That would leave a claimant with no redress if he was not the start of the development of the malignancy was about negligently exposed elsewhere and for whatever reason 10 years earlier in 1980 (give or take a year either side). he cannot pursue an EL claim – usually because his employer has long since gone out of business and the Municipal Mutual Insurance Limited (MMI) provided PL EL insurer is unknown. cover for Bolton between February 1979 and December 1991, the policy insuring Bolton in respect of The Bolton case was of course decided on its own fact compensation arising out of: and the particular wording of the policies even though accidental bodily injury or illness … to any person … most PL policies are similar but it would clearly be prudent when such injury, illness, loss or damage occurs during for policyholders to check the wording of their PL policies the currency of the policy … to ensure a continuity of cover. It is even more important in relation to EL policies where most are written on an MMI blamed Commercial Union Assurance Company ‘injuries caused’ basis triggered by the date of Limited (CU) who was on risk at the time Mr Green was exposure/inhalation of fibres. However, there are some negligently exposed and whose policy was worded similarly ’rogue’ policies which use the ‘injuries occurring’ wording to that of MMI. CU was joined as second defendant. and if a policyholder has mixed EL policies it could end up being uninsured for some very expensive mesothelioma The CA agreed with the judge at first instance that MMI claims and following the Compensation Act 2006, liable for was liable to Bolton since the mesothelioma was an 100% of the damages even when it has contributed only a accidental bodily injury (in the sense of being small proportion of the claimant’s total asbestos exposure. unintended) which occurred during the currency of the MMI policy and CU were not liable to indemnity Bolton In these circumstances and particularly if the policyholder since the mesothelioma had not occurred during the does not have sufficient funds to pay the damages, the period of indemnity for which they were on cover (there court will no doubt do everything in its power to ensure were other subsidiary matters dealt with in the judgment that the innocent claimant recovers his or her damages which are outside the scope of this article). and will not necessarily want to be constrained by the niceties of policy wording and construction. The main argument put forward by MMI on appeal was that the accidental injury occurred either when the It is one thing to argue nuances of law and construction asbestos fibres were inhaled or when the body first between insurance companies when a claimant has been reacted to the fibres but this was rejected by the CA. or will be compensated but quite another matter when the outcome could be that the claimant will not receive It was not necessary for the court to decide whether any damages at all. In Bolton the CA did fire what could the injury occurred when the malignant tumour was well be a warning shot across the bows of EL insurers first created or when identifiable symptoms first occurred indicating that the United States multiple trigger theory as MMI’s period on risk covered both alternatives. (where all insurers at risk from the time of first exposure Consequently there is likely to be further litigation to to the date of diagnosis should be liable), could be held determine the trigger point as unlike Bolton, there could on some future occasion to be appropriate for EL policies be different insurers on risk for these two distinct periods. in general depending on the precise words used. Similarly there is likely to be litigation to determine the trigger point for the other asbestos-related conditions of The message for policyholders is carefully check your asbestosis, lung cancer and pleural thickening. policy wording to ensure there are no gaps in cover and the message for insurers is get your act together and do Of course in Bolton, Mrs Green had already received her not expect sympathy from the courts if the claimant damages and the judgment is unlikely to have a might not receive damages. significant impact on the typical mesothelioma claimant particularly as most claims are dealt with by EL insurers. Nevertheless claimants are now looking further than their employers to prove culpable exposure and because the latent period for mesothelioma can be 30 or 40 years it is not unusual for the ‘negligent exposers’ to have gone out of business and ceased to exist many years ago in which case there will be no PL John Harland policy in force for the relevant time whether it be when Partner, Stockton-on-Tees

Berrymans Lace Mawer DISCLOSURE • SEPTEMBER 2006 33 The sky’s the limit in the construction ‘global market-place’

The world in which construction professionals and contractors operate brings with it inherent risks not only for the principal contracting parties, but also for essential service providers (such as insurers and financiers) who need to take on board a whole host of factors that distinguish today’s international construction work from the more familiar domestic projects of the past.

Whether it is sports stadia in London, man-made islands not kept pace with the changes in construction and in Dubai, or glittering skyscrapers in Hong Kong, procurement methods. architects, engineers and contractors now work, more and more, in a truly international and global market-place. The locally amended versions of FIDIC’s 4th Edition provide that it is always the main contractor who As a result, new and different construction risks affect their takes the risk of any change in local laws (for example, projects, and the terms and conditions of the contracts the local law recently introduced in Dubai, forcing and appointments upon which they are engaged. all construction projects to stop outdoor work in summer during the hottest part of the day, inevitably In the Middle East in particular, long established led to loss of productivity, additional cost and delay to members of the UK construction, engineering and project completion dates, all of which rest with the architectural fraternity, are now working on iconic main contractor). ‘mega-projects’ which are redefining the skyline and, in some cases, recreating the landscape of countries like In addition, the local amendments provide that any the UAE. However, with the ever-increasing demands increase in raw material costs is borne by the main of building higher, bigger and faster, come a whole series contractor and many of the big contractors have suffered of new and diverse risks. significant financial losses recently, as local concrete and steel prices have soared. In every jurisdiction, a variety of political, historical and financial reasons have tended to influence attitudes within Fundamental matters, such as identifying which country’s the construction industry. law will govern the construction contract or appointment document, need to be considered when assessing the For example, in the UAE, there is still continued viability and risk of tendering for an international widespread use of FIDIC’s 1987 ‘Red Book’4th Edition construction projects. Whilst the English common law construction contract, carefully amended and, on system of precedent and reliance on decided case-law is occasion, not so carefully amended. Apart from the fact familiar to many, civil law jurisdictions exist throughout that this amended form of contract is often ill-suited to the Middle East which do not rely upon case-law and the requirements of today’s modern construction projects precedent of previous court decisions, but on a prescribed and procurement methods, it also contains less than written code of express and binding rules and contractor-friendly provisions. regulations. This can bring with it a host of inherent and unfamiliar legal concepts. Given that FIDIC published in 1999, some seven years ago, a new suite of contracts including a new ‘Red Book’ By way of example, companies looking to work in Dubai for construction and engineering works, it is surprising need to be aware, when evaluating the risks of a construction that the content and style of construction contracts have project, of the following local construction laws:

34 DISCLOSURE • SEPTEMBER 2006 Berrymans Lace Mawer ■ A binding and enforceable obligation of ‘good faith’ exists between parties to a contract (UAE Civil Code article 246). ■ A joint and strict ten year or ‘decennial’ liability, which cannot be limited or contracted out of, attaches to all designers and construction contractors in relation to structural defects affecting the safety or stability of any building (UAE Civil Code article 880). ■ The local court can increase or decrease liquidated damages for delay, regardless of any pre-agreed sum that the parties have assessed and included as an express contractual provision (UAE Civil Code article 390).

Add to these examples the lack of recognition or definition of familiar phrases as used in the UK construction industry eg ‘time at large’, ‘time of the essence’ and ‘back-to-back contracts’, as well as the lack of interim dispute resolution processes (such as the UK’s compulsory construction adjudication scheme), and it is clear to see why those looking to enter and participate within the global construction market-place need to be well advised on the requirements of both local and international construction law.

The need for such advice applies not only to the primary parties to any construction contract, but also to project managers, claims consultants, financiers and to the insurers of those taking on board these new and unfamiliar risks.

For an insurance company, where its insured is seeking to undertake major construction projects in foreign climes under unfamiliar local laws, numerous issues arise in relation to health and safety, third party liabilities, construction risks, limitation of liability and environmental risks, as well as the often different way Without careful identification, consideration and in which local criminal laws operate. What may be merely assessment of all the risks involved, followed by a system an act of negligence or carelessness in one jurisdiction, of well planned risk avoidance, assessment and may be cause for a criminal conviction and imprisonment management, difficulties can arise which might mean in another. that, for the potential liabilities of unwary participants in international construction contracts, the sky is the limit. In addition, in this day and age, terrorism, civil unrest and Nevertheless, there are exciting opportunities for those political upheaval are all real issues that must be astute enough to properly manage the risks. considered when addressing the requirements for comprehensive risk assessment on major construction projects around the world. Add to that the ever-changing climatic and environmental factors affecting construction projects, brought about by unusual weather patterns, rising seas, and increased recognition of the world’s areas of seismic activity or ‘earthquake zones’, and it becomes apparent that the construction industry’s risks and requirements are ever more demanding, and its participants’ desire to limit and control those risks is Paul D Taylor becoming ever more important. Solicitor, BLM Dubai

Berrymans Lace Mawer DISCLOSURE • SEPTEMBER 2006 35 Hot summer days and tree root subsidence

Claims for cracking and other damage to adjusters, as well as independent engineering and buildings due to subsidence cost the arboricultural expertise. BLM is also a member of the insurance industry hundreds of millions of forum. The ALARM protocol is just as relevant today. pounds every year and possibly the greater part of claims is due to tree roots. More recently, there has been a movement to increase co-operation between building insurers and local authority No-one can have escaped the fact that this summer has liability insurers in dealing with tree root claims to produce been one of the driest and hottest on record, and it follows a Joint Protocol agreed between the two groups. The Tree on from a relatively dry winter. These conditions increase Forum has worked with the Property Claims Forum (PCF), the risk of building subsidence due to tree roots. Moreover, which represents a large group of building insurers, to London and the south-east have been particularly dry produce a Joint Protocol for dealing with tree root claims, (the Met Office states that November 2004 to July 2006 approved by both bodies. To clarify, the ALARM protocol is the driest period for south eastern and central southern and the Joint Protocol are not the same: the former is a England for over 70 years) and that these areas are guide for local authority use and the latter is a jointly particularly prone to tree root subsidence because of the produced document for the guidance of both parties. predominantly clay soil (although clay soil is not confined to those parts of the country). The Joint Protocol sets out a relatively basic framework and timescale for progressing and settling claims for tree root Generally, the legal climate at present is unhelpful to local subsidence, including guidance as to the level of evidence authorities: if highway trees cause damage to property, which the building insurer might be expected to provide to the local authority may find that it has a legal liability for the local authority on any claim. The aim is to minimise the at least part of the cost of remedying any such damage. time and cost of settling tree root claims. To facilitate this it The costs of repair can be substantial, particularly if it is encourages early exchange of information, to allow each necessary to underpin the property. These costs will party to consider the evidence and information within initially be borne by buildings insurers and then, to the certain timescales, before commencing legal proceedings. extent they are able to recover from the local authority, by the authority and their insurers. Consequently, the cost The Joint Protocol is currently being trialled by three London of dealing with subsidence claims is likely to affect the boroughs – Southwark, Barnet and Islington – to see how it cost of building insurance. works in practice. If necessary amendments can be made as teething problems emerge. If these trials are successful, then In general, cracks due to tree root growth do not appear the aim will be to invite other local authorities to participate, in the summer but start to appear from September so that the Joint Protocol becomes applied generally. onward. There may be a further delay before any claim is made on buildings insurance if cracking is initially The Tree Forum continues to meet on an occasional basis unnoticed by the householder. Thereafter there may be a to discuss matters such as the Joint Protocol, and other further time-lag (anything from a period of weeks to issues affecting local authorities. If you have any particular years) whilst the cause of the subsidence is investigated, comments on the Submission of Evidence, which you before any claim emerges against the local authority. would like to communicate to the Tree Forum, please contact [email protected] Approximately two years ago an ALARM Special Interest Group (the Tree Forum) developed a protocol document to assist local authorities in dealing with tree root claims arising from trees in the highway, which was subsequently approved by the London Tree Officers’ Association (the ALARM protocol). The Tree Forum includes local authority arboriculturalists, insurance Andrew Plunkett officers and risk managers, local authority insurers, loss Solicitor, BLM London

36 DISCLOSURE • SEPTEMBER 2006 Berrymans Lace Mawer Evidence in fire (and other recovery) cases: judicial guidance

It is sometimes the case that at the conclusion of a judgment a judge feels compelled to offer some pointers for the future conduct of similar claims. His honour Judge Peter Coulson QC felt so compelled when handing down judgment in Wessanen Foods Ltd v Jofson Ltd (2006) EWHC 1325 (TCC) (8 June 2006).

The facts The pointers

On the 9 July 2002 a forklift truck at the factory owned Role of fire experts and operated by the claimant caught fire and caused Prior to trial the fire experts instructed by both parties had extensive damage to the factory and materials stored reached the point where they had agreed what caused there. The forklift truck was owned and hired out to the the fire. Nonetheless both fire experts were called to give claimant by the defendant. The claimant claimed evidence at the trial. Judge Peter Coulson QC expressed damages against the defendant making various the view that: allegations of breach of contract and negligence. … once they had agreed the cause of the fire from a

Berrymans Lace Mawer DISCLOSURE • SEPTEMBER 2006 37 technical perspective, I consider that their role was really over … Thus, I would like to see parties in cases such as these take a long hard look at the statement agreed by the fire experts pursuant to CPR 35.12, to see whether, in view of the agreements reached, it is necessary or appropriate to adduce oral evidence from fire experts at the trial. There will be cases where such evidence is vital to the proper disposition of the issues by the court. But there will be many others where, because of the wide range of the agreements reached, such evidence is not necessary. I believe that this was one of those cases.

Testing One batch of tests was carried out by the defendant’s experts without the claimant’s experts being present or without their knowing that such tests were being performed. Judge Peter Coulson QC stated that it was not Conclusion a good idea in cases of this sort for one side’s experts to carry out tests unilaterally: The first two pointers require little comment. In order to The risk is that, if one set of experts carries out tests reduce costs the attendance at trial of experts should be unilaterally, the tests will have to be repeated at a later restricted so far as possible and likewise unilateral testing date with the other side’s experts in attendance. This should be avoided (but if being considered the other leads to unnecessary work and additional cost. It also party should at least be put on notice). means that there can be endless debate about the circumstances in which the first, unilateral, set of tests The guidance concerning contemporaneous notes was carried out. In the present case, I am in no doubt requires further comment. It is in many ways helpful for that the first series of tests carried out by the defendant’s insurers. Prompt disclosure of such notes should ensure experts should have been carried out in the presence of early evaluation of cases and consequent savings in costs. all the experts. I think that would have clarified the issues Further, the guidance provided by the case may assist an earlier and would have saved time at the trial. application for pre-action disclosure and likewise hopefully lead to an early evaluation of merits/savings in Contemporaneous notes costs. Again, failure by one party to disclose such notes at Judge Peter Coulson QC highlighted the perennial an early stage may enable the other party to later seek problem facing judges, namely disputes of fact and obtain an adverse costs order in their favour. concerning what was said or done some years ago. In his view it was inevitable that a judge will give considerable Certain issues remain outstanding. Judge Peter Coulson weight to any contemporaneous notes made at or QC did not comment on the matters relating to privilege. immediately after the events in question. The claimant’s If the dominant purpose for the preparation of the fire expert attended the claimant’s premises the day after expert’s notes was for the purpose of litigation and the fire and spoke to a number of witnesses, making a full litigation was contemplated at the time then the notes handwritten note of the salient part of his conversations. should attract privilege. Insurers should, nevertheless, Those handwritten notes were attached to the claimant’s consider whether it might be expedient to waive privilege fire expert’s report and provided to the defendant at the and disclose such notes. stage of exchange of expert reports. Judge Peter Coulson QC expressed the view that those notes should have been In short, be pragmatic and be aware of how the courts provided at a much earlier stage: view attempts to suppress evidence. It seems to me that, where an experienced fire investigator … makes such notes, they should be made available to everyone at the earliest stage of the proceedings … It seems to me that those notes should have been provided at the outset of the litigation, and certainly no later than the time of standard disclosure. I consider that, if they had been disclosed earlier, the disputes in the present case, would have been capable David Tye-Reeve of better (and earlier) refinement. Partner, BLM Southampton

38 DISCLOSURE • SEPTEMBER 2006 Berrymans Lace Mawer BLM briefing

PARTNERSHIP NEWS British consultancy and engineering. Congratulations to Pell Frischman, BLM announced the appointments of five new partners on 1 April 2006 and this year’s winner of the brings the partnership total to 102. New partners in our Manchester office Outstanding Contribution award. are: Karen Jackson, David Caswell (occupational disease), Anthony Mangham, Robert Steele (commercial litigation), Raymond Southern At the Strategic Risk 2006 European (personal injury), additionally Françoise Snape in BLM Birmingham (health Risk Management Awards Jonathan and safety regulatory). Edwards (BLM London) presented Suffolk CC with the Best Risk Val Jones (BLM Manchester) has been appointed by the Lord Chancellor as a Management Approach in the Member of the Legal Services Consultative Panel, established in January 2000. Public Sector award. This is the The work of the panel will cease in three years if the government Legal Services third year BLM has sponsored the Bill is passed, when the LSB will take over the regulatory role. The panel award as part of our continued provides advice to the Lord Chancellor on legal services, legal education and commitment to best practice in the related matters. insurance industry.

BLM is pleased to be sponsoring the BLM NEWS ■ Representative actions in consumer ABI’s first major motor insurance protection legislation – issued by conference taking place on 20 On 25 September, BLM is chairing a the Department for Trade and September at Grange City Hotel, working group charged with Industry (early October). London. The afternoon legislative developing a strategy for change in ■ Further changes to part 36 Civil and legal developments sessions dealing with claimant costs in Procedure Rules to reflect cases include a workshop on Whiplash: catastrophic and high value injury where the defendant is good for compensating for genuine injury? litigation. The group has been the money and to deal with which will be presented by Val formed following the BLM consequences of withdrawn offers Jones (BLM Manchester) and Ailsa catastrophic injury forum meeting (early October). Adamson (BLM Stockton-on-Tees). earlier this summer. Representatives ■ The nature of pre-action from five of the leading insurers will admissions and any subsequent be in attendance at the meeting. The withdrawal thereof (early October). NEW PUBLICATION next BLM national catastrophic forum ■ Changes to the operation of the will take place in November 2006 Financial Services Compensation Bingham and Berrymans’ Personal and will focus on life expectancy. Scheme so that it may contribute to Injury and Motor Claims Cases mesothelioma claims paid under 12th edition, will be available at the Over the summer, the government the Compensation Act – issued by end of 2006. has continued to issue consultation Treasury & Financial Services papers on a wide range of litigation Authority (early October). topics likely to be of interest to We expect to report on the outcome TRAINEES QUALIFY defendants and their insurers. Below of the above in future editions of are the various papers (issued by the Disclosure. The following were offered positions Department for Constitutional Affairs in the firm as qualified solicitors after unless specified otherwise) along Trainee solicitor, Lucy Tolond training with BLM: with their response dates: (BLM Birmingham) has scooped ■ Liverpool: Claire Trainor ■ Scope, exemptions and detailed the silver award for the ‘Best (personal injury) conduct rules and fees applying Examination performance’ in the ■ London: Elspeth Fenton to the regulation of claims Legal Practice Course from the (occupational disease), management activity (September Birmingham Law Society. Claire Field (clinical negligence) and October). ■ Manchester: Max Ekstein ■ Draft rules governing proceedings BLM sponsored the NCE/ACE (commercial litigation), Gemma before the new Court of Protection Consultants of the Year awards, Badger, Gemma Olsson, Jayne (early October). which celebrates excellence of Entwistle (personal injury)

Berrymans Lace Mawer DISCLOSURE • SEPTEMBER 2006 39 BLM ALSO WELCOMES EVENTS CALENDAR 2006/7 *half day **full day

■ Birmingham: Charlotte Brown (fraud), Paul Owston, Susan Horridge (personal injury) ■ London: Sarah O’Leary (clinical negligence), Jennifer Johnston (occupational disease), Andrew Layton-Morris, Ian Clarke (professional indemnity), Peter September 2006 January 2007 Stockill (construction) • Occupational disease • Health & Safety workshop* ■ Manchester: Paula Whittell, conference 2** IoD Hub, Birmingham Sheila Gaunt, Josiane Williams Renaissance Hotel, Manchester 25 January (personal injury) 7 September • Construction law seminar • Health & Safety Workshop* Southampton – venue and IoD, Bristol date to be confirmed BLM TALKS 14 September • Employment Seminar* February 2007 Brian Goodwin (BLM Liverpool) Salisbury House, London • Health & Safety workshop spoke at a conference organised by 20 September Southampton – venue to be Post Magazine Claims Club entitled confirmed Asbestos Claims: The Barker decision October 2006 8 February update. What are the implications for • Claims Review (1) – Manchester** claims? on 17 May this year. New Century House March 2007 5 October • Product Liability seminar** David Evans delivered a talk to North • Claims Review (2) – London** IoD Hub, Peter House, Wales local authorities on transport One Great George Street Manchester safety at educational premises, and 11 October 1 March the consequences of failing to manage • Local Authority seminar* • Local Authority seminar (1)** health and safety effectively, at a one- The Imperial Hotel, Llandudno Cedar Court Hotel, Huddersfield day conference organised by Gynedd 19 October 8 March County Council and supported by the • Local Authority seminar (2)** Welsh Local Government Association November 2006 IoD Hub, London on 19 May 2006. • Construction Law seminar* 15 March IoD Hub, Bristol BLM continues to work closely with 2 November April 2007 ALARM (Association of Local Authority • Health and Safety workshop* • Occupational Disease Risk Managers), see page 36. In June, IoD Hub, London seminar – London (1 of 2)** this year, we presented three 9 November One Great George Street, London workshops on the future of local • Product Liability** 26 April government at ALARM’s 14th annual IoD Hub, London Conference and Exhibition: (1) the 10 23 November For information about these and year revision seen through the eyes of • Clinical Negligence – Claims* other BLM events please the ECM (Every Child Matters), Roy Salisbury House, London contact: Linda Coppell, Berrymans Woollard, BLM Leeds and Michael 29 November Lace Mawer, Castle Chambers, Pether, BLM London; (2) disability and 43 Castle Street, Liverpool L2 9SU. discrimination, Brian Goodwin, BLM December 2006 Tel 0151 236 2002, email Liverpool and Richard Cliff, BLM • Health & Safety workshop* [email protected] or Manchester; (3) the importance of Radisson Hotel, Liverpool visit www.blm-law.com documents in fighting fraud, Henry 7 December Bermingham, BLM Birmingham, Jeff • Transport seminar** Please be aware that we may Wale, BLM Southampton, Sara Wedel, Radisson Hotel, Manchester Airport have to change details of these BLM Leeds, Nathan Snowden-Merrills, 12 December seminars at any time. BLM Manchester and Boyd Morwood, 9 St John’s Street Chambers. BLM briefing contribution by Hansha Patel, BLM London

40 DISCLOSURE • SEPTEMBER 2006 Berrymans Lace Mawer www.blm-law.com

Birmingham Leeds Liverpool London Manchester Southampton Stockton-on-Tees Dubai 63 Temple Row 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 5LS 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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