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⭐Disease: solving disputes post 1 April 2013
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1 Disease: solving disputes post 1 April 2013 This update examines the impact made by the Jackson reforms since their implementation on 1 April 2013 and looks forward to the extension of the RTA portal due to take place on 31 July 2013 and other changes affecting disease claims. Multi Track claims Cost budgeting Costs budgeting has been implemented but there has been no uniform approach by the courts as to when (and in some cases whether) the parties are ordered to prepare a costs budget. Local courts seem aware of the difficulties facing practitioners and are more than willing to provide telephone guidance on when to prepare costs budgets. Inevitably outcomes at costs management hearings will vary but already we have seen District Judges reduce claimants budgets, using the defendant budget as a guidance tool. This demonstrates the importance and value of the defendant s budget even in cases where there may be little prospect of the defendant recovering any costs. In one instance, a claimant s budget was reduced by almost 50% and this can only be welcomed as the true intention behind costs budgeting. Mesothelioma Bill The Mesothelioma Bill 2013 introduces a payment scheme for mesothelioma sufferers exposed at work who are unable to trace a solvent employer or relevant employers liability (EL) insurer to claim against and improvements to the tracing system to identify EL insurers. The Bill completed its Committee stage on 10 June. The proposed scheme is to make payments to people first diagnosed with diffuse mesothelioma on or after 25 July 2012, who would have a valid claim against an employer in the UK but who are unable to bring a claim for damages against that employer or their EL insurer. Public liability claims, notably secondary exposure cases arising from washing a spouse s asbestos contaminated work clothes, are not covered by the scheme. The scheme is to be funded by an annual levy, currently estimated at 35m, on insurers currently active in the (EL) insurance market. Each insurer s share of the levy is determined by their (EL) market share. The scheme tariff will be set at a percentage of average civil damages, currently expected to be 70%. CRU recoupment and offsetting benefits will eventually apply but not during the first year of the scheme. It is likely that a fixed fee payment will be made for claimant s legal costs, with current suggestions ranging from 2,000 to 7,000. The Bill also provides for the creation of a Technical Committee, designed to make binding decisions in disputes about whether an insurer provided EL cover to a particular employer at the time the claimant was negligently exposed to asbestos. Although the consultation response included proposals that would compel membership of the Employer Liability Tracing Office, the Bill does not actually go this far.2 The limitation on eligibility to those diagnosed with mesothelioma on or after 25 July 2012, the reduced tariff payments and the failure to apply the scheme to all asbestos related diseases has already attracted critics. They are unlikely to be silenced once the Bill becomes enacted. As with all government schemes, it is to be seen as a fund of last resort. Mesothelioma claims process The publication of the Ministry of Justice (MoJ) consultation on other parts of the reform package, including a simpler more streamlined online claims process for all mesothelioma claims with set timescales and fixed legal costs, is anticipated before the end of the summer. Meanwhile: Pre LASPO funding arrangements remain valid for mesothelioma claims so that unsuccessful defendants still face recoverable success fees and After The Event (ATE) insurance premiums regardless of the date of the conditional fee arrangement (CFA) or ATE policy An order for costs against a claimant in a mesothelioma claim will be enforceable if the claim is funded by an old world CFA (Qualified One Way Costs shifting. (QOCS) only applies to a mesothelioma claim if it is funded other than by a pre LASPO CFA) 10% uplift for general damages (Simmons v Castle) applies Contribution claims Mesothelioma and any other indivisible claims are generally settled by single sued defendants, with separate recovery then sought from any other tortfeasors or contributors pursuant to the Civil Liability (Contribution) Act This is likely to be an increasing trend in cases where there are multiple tortfeasors if a streamlined portal type process and fixed fees are introduced. Smooth fast and effective co ordination between those representing multiple tortfeasors will be essential to avoid potentially costly contribution proceedings. A contribution claim is not a claim for personal injury and therefore the QOCS regime does not apply. An order for costs against either party in contribution proceedings will be enforceable. When liability to make a contribution is not clear cut such claims will continue to be viewed with greater caution than claims advanced by claimants themselves, due to the largely untested ground surrounding the weight of evidence given by claimants compared to that produced by defendants seeking reimbursement, with the risk of an adverse costs orders if the claim is unsuccessful. Fast Track The Portal The extended RTA protocol will apply to disease claims where no letter of claim has been submitted prior to 31 July A disease claim will fall into the portal process if: It is an employers liability claim It has a value, as claimed, of no more than 25,000 on a full liability basis including all heads of claim but excluding interest. Damages for pain suffering and loss of amenity must have a value of more than 1,000 (i.e. the claim must not fall within the Small Claims Track). It is against a single defendant (but could be against multiple insurers) The defendant is solvent and/or its insurer has been identified A claim for a disease caused by an accident or other single event that occurs on or after 31 July 2013 regardless of whether it is an employers liability claim or a public liability claim will fall inside the portal as such claims are categorised as accident claims rather than disease claims. This will catch some work related upper limb disorders (WRULD) claims and some respiratory and dermatitis claims involving a single chemical/irritant exposure. Disease claims satisfying the criteria constitute less than 20% of the current disease market.3 A claim will fall out of the Portal process if: The defendant fails to complete and send a response within the time period allowed (30 days from when the Claims Notification Form (CNF) is sent in EL cases) There is not a full admission of liability (to include limitation and causation The defendant can opt that the claim should come out of the Protocol if it considers that inadequate mandatory information has been provided in the CNF A Claimant can opt to take the claim out of the Protocol if a defendant fails to pay Stage 1 fixed costs when due Liability decisions in disease cases are rarely straightforward. It is to be hoped that the proposed CNF for disease claims will be revised in the future to prevent further claims falling unnecessarily out of the process. Currently there is no provision in the CNF for: HMRC Schedule of Employment or other proof of employment Proof of diagnosis Confirmation that there has been no exposure other than with the named defendant Confirmation that no previous or other claims have been made for the same disease Information pertinent to limitation other than when the claimant first sought medical attention A defendant may withdraw the admission in respect of causation made in the Stage 1 response providing this is done within the 15 day initial consideration period or any agreed extension. The reversion to guideline hourly rates for disease claims which fall outside the portal makes it all the more important to ensure that those true portal cases remain there. Claims dealt with under that regime will be significantly less expensive and will have the advantage of a predictable costs outcome. Defendant organisations need to consider what categories of cases they do wish to retain in the Portal and ensure their processes are adapted to fulfill this aim. Live defendants with accessible and comprehensive records of employment history, exposure and confirmed diagnosis of occupational disease will be able to realise the costs benefits of handling claims within the Portal. Defendant organisation should consider: Revising personnel records to provide employment and exposure history Providing information on company names and structure and insurers on websites and/or a process to answer queries of this nature promptly Requests for personnel and occupational health records will continue to be made. Contact with claims handlers/insurers is essential at that stage if the Portal timescales are to be met. Where possible a signed authority for release of the records to the defendant and their claims handlers/insurers as well to the claimant and his representatives should be sought. Reviewing procedures and contact arrangements to enable early and speedy investigation Where there is a full insurance history for an insured, insurers may wish to consider a pay and be paid arrangement on the basis that the handling insurer will be the decision maker and a clear time limit for reimbursement There has already been a large rise in disease claims notified to insurers from March 2013 which was the result of extensive farming of disease claims in the run up to the reforms, primarily to ensure claimants were signed up on old world CFAs to allow the potential recovery of success fees. Defendant organisations need to beware of false multi party claims, for example where there are ostensibly several defendants but an employer has changed names and is in fact the same entity or liability rests with a single employer by virtue of the TUPE regulations. Also be aware of claims which artificially inflate quantum, such as claims for psychological injury as well as tinnitus in noise induced hearing loss claims.4 In either case if it becomes clear during claim handling or on settlement that the case should have remained in the Portal defendants should have no fear of raising the argument for portal only fixed fees to apply. Transitional cases c There will be a long tail of transitional cases and care must be taken to identify such cases and avoid leakage on general damages and costs. Was CFA in place and entered into on or before 31/3/2013? If CCFA: did claimant s solicitors provide advocacy or litigation services to the claimant on or before 31/3/2013? Was ATE policy in place taken out on or before 31/3/2013? Yes - pay success fee Yes - pay ATE premium No 10% uplift on general damages QOCS does not apply Fast track costs The majority of disease claims are comparatively low value and dealt with on the Fast Track but, unless they remain within the Portal, will attract guideline hourly rates. Costs budgets are not required in Fast track cases and there is no provision for a costs estimate to be served prior to the directions or listing stages. Control on costs may be assisted by obtaining an order for exchange of costs estimates but the main route for control will still fall at the end of the case when costs are assessed. Proportionality will be the key issue and defendants need to be alert for and ready to challenge unnecessary costs building such as drip feeding information using numerous short letters. Section 69 Enterprise and Regulatory Reform Act 2013 The Enterprise and Regulatory Reform Act completed its path through parliament and received Royal Assent on 25 April Section 69 amends section 47 of the Health & Safety at Work Act 1974 so that breach of a duty under an existing statutory regulation will no longer be actionable in law unless the statutory provision provides otherwise. Once section 69 is fully in force, which is likely to be in October 2013, breaches of such statutory duties that have previously been found to invoke strict liability can no longer be relied upon and claimants will have to prove negligence. The section is not retrospective, so it will not apply to breaches that occur before the section comes into force. The effect of section 69 is likely to be concentrated in asthma and dermatitis cases involving breaches of COSHH. These claims may fall to be dealt with in the Portal after 31 July Currently such cases are difficult to defend on breach of duty grounds. The return to the negligence based assessment will allow defendants to restore the balance in favour of a common sense approach to the management of health and safety. Defendants must be willing and ready to investigate claims and make decisions on liability quickly. Whilst there may be clear economic advantages in some cases of ensuring a case remains within the Portal, the same rigour should be applied to disease claims as we do presently. Poor claims should be resisted both now and under the future system. For more information on the issues raised in this update, please contact Victoria Douglas, Associate on / or Judith Peters, Principal Litigation Support Lawyer on / You can also find more information at or by ing5 This update does not attempt to provide a full analysis of those matters with which it deals and is provided for general information purposes only. This update is not intended to constitute legal advice and should not be treated as a substitute for legal advice. Weightmans accepts no responsibility for any loss, which may arise from reliance on the information in this update. The copyright in this update is owned by Weightmans 2013 Data Protection Act Pursuant to the Data Protection Act 1998, your name may be retained on our marketing database. The database enables us to select contacts to receive a variety of marketing materials including our legal update service, newsletters and invites to seminars and events. It details your name, address, telephone, fax, , website, mailing requirements and other comments if any. Please ensure you update our marketing team with any changes. You have the right to correct any data that relates to you. You should contact James Holman, our Data Protection Officer in writing, at 100 Old Hall Street Liverpool L3 9QJ. Similar documents
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