Legal Update: Courts, Claims and Costs

Andrew Gilmour

Partner BLM

10th December 2014

Legal Update

1. Increasing Value of Fatal Claims in Scotland

2. The Court Reform Act

3. Costs Reforms

4. Insurance Bill 2014

5. Future Reforms on the Horizon

Increasing Value of Fatal Claims in Scotland

• Damages (Scotland) Act 1976, now 2011

• Loss of society now at Section 4(3)(b)

• Loss of support now at Section 4(3)(a)

• Applies to all fatal claims

• Special provisions for Mesothelioma

• Estate claims:

Solatium, Services, Loss of Earnings, Funeral Expenses

Who else can claim?

Deceased’s “Immediate Family”:

• Spouse, civil partner or living with the deceased as if married

• Parent, child or person who accepted the deceased as a child or was

accepted by the deceased as a child

• Brother, sister or brought up in same household and accepted as a child of

the family

• Grandparent, grandchild or accepted as such

“Distress, grief and loss of society” Section 4(1)

Immediate family are entitled damages for:

• Distress and anxiety endured by the relative in

contemplation of the suffering of the deceased before

death

• Grief and sorrow of the relative caused by the

deceased’s death

• The loss of such non patrimonial benefit as the relative

might have been expected to derive from the deceased’s

society and guidance if he/she had not died

Older Awards

• 2001 – Strang v Le Brusq (Jury)

Deceased age 21 years. Parents awarded £30k each

• 2003 – Shaher v British Aerospace (Judge)

Appeal court reduced award to parents of deceased

son from £35k to £20k

• 2006 -Gillies v Lynch (Jury)

Deceased age 24 years. Mother awarded £80k

Nimrod Jury Awards

• Young v Ministry of Defence 2010

Deceased 21 years male. Mother awarded loss of

society £90k and adult sister awarded £60k.

• Dicketts v Ministry of Defence 2010

Deceased age 27 years. Mother and father awarded £98k each including services of £2k-sum sued for

• Swarbrick v Ministry of Defence 2010

Mother awarded £100,000 – sum sued for

Jury Awards 2011

• Hamilton v Ferguson Transport (Spean Bridge) Ltd 2011

Mother age 50 years killed in RTA

Husband age 67 years awarded £80k

Daughter age 17 years awarded £120k

Note hierarchy of awards

• Thomson v Dennis Thomson Builders Ltd

Pursuer was father of deceased who died in course of employment –

sole director and 100% shareholder

Deceased age 26 years

Father awarded £90k

Judicial Awards 2011

• Bellingham v Todd 2011

Widow - £50k

Young children - £25k each/Adult son - £15k

Parents - £15k each

Adult brother - £10k

• Wolff & Ors v Moulds & Ors 2011

Widow - £50k

Adult children - £15k and £18k

Grandchild - £6,500

Appeals

Hamilton / Thomson Appeals 8.6.12

• Original jury awards excessive

• Disparity in awards by judges and juries unsatisfactory

• Absence of direction to jury unsatisfactory - now refer jury

to spectrum of possible awards

• Judge Awards in Bellingham and Wolff “markedly

undervalue” loss of society claims

Increasing Fatal Damages in Scotland

11

• Kelly v Upper Clyde Shipbuilders

Jury, 29.6.12, Mesothelioma. Widow £40K;

Child £25K; Grandchildren £1.5K,£4K, £8K; Sibling £8K

• McGee & Others v RJK Building Services

Judge, 18.1.13. PL. Widow £80K. Daughters £35K;

Son £27.5K; Grandson (17) £25K; Granddaughter (9) £20K;

Granddaughters (13 and 10) £12K

Increasing Fatal Damages in Scotland

12

• Ryder v Highland Council

Judge, 13.6.13. RTA. Mother £40,000

• Currie v Esure Services Limited

Judge, 21.2.14. RTA. Father & Mother £42K each;

Sibling £22,500

• Scott v Parkes

Jury, May 2014. RTA. Mother £86,000

Increasing Fatal Damages in Scotland

13

• Gallagher & Others v SC Cheadle Hulme & Others

Judge, 24.6.14. Mesothelioma.

Widow £80K; Children (adult) £35K each;

Grandson / Granddaughter £25K; Granddaughter £12K

Grandsons £2,500 each

• Stuart or Ward v Reid & NIG

Judge, 31.7.14. RTA. Grandchildren (5) £18K; (3) £16K;

Grandson (born 5 months after) £14,000

Increasing Fatal Damages in Scotland

14

• McCarn & Ors v Secretary of State

Judge, 5.8.14. Mesothelioma.

Each adult child £35,000

• Young v McVean

Judge, 28.8.14. RTA. Mother £80,000

Practical conclusions

• General Increase in Section 4(3) Awards – all levels

• Erosion of Hierarchy of Awards?

• Factors used to Increase Awards more important

• Continued increases from Judges Expected

• Possible levelling of awards

• Careful Reserving

Loss of support s 4(3)(b)

Claimants - Immediate family plus those supported:

‣ Ascendant/descendant of deceased; Uncle and aunt

‣ Child or issue of deceased’s brother/sister, uncle/aunt

‣ Spouse or civil partner

‣ Section 7 – presumed to come from 75% of deceased’s net

annual income

‣ Exception – “for the purpose of avoiding a manifestly and materially unfair result” s 7(2)

‣ No challenge as yet to 25% deduction

‣ Income of remaining spouse ignored

‣ Must be a truly exceptional case to depart from 75%

The Court Reform (Scotland) Act 2014

The Review of the Civil Justice System

• Scottish Government - appointment of Lord Gill

• The Gill Review – 2007 to 2009

• The Gill Report – September 2009:

“Report of the Scottish Civil Courts Review”

• Consultation Paper on the Review

• Scottish Government Response

• Parliamentary Progress and Passing

The Reforms

Privative Limit of the Court of Session up to £100,000

The New Sheriff Court

• Focus on Sheriff Court below £100,000

• New Personal Injury Court in Edinburgh

• Civil Jury Trials

• Sanction for Counsel

• Summary Sheriffs

• All-Scotland Sheriff Appeal Court

Scottish Civil Justice Council

Headed by the Lord President, Lord Gill.

• Creation and purpose

• Structure

• Significant role in implementation of the Court

Reform (Scotland) Act 2014

The Reform Timetable

Early 2015:

• Recruitment begins of new Summary Sheriffs

2015-16:

• New Personal Injury Court starting operations

• New Sheriff Appeal Court starting operations

The Effect of the Reforms?

Various Opinions have been expressed….

Gridlock in the Sheriff Court? Panicking Pursuers?

An end to the Bar? Shrinking of Court of Session?

Parties receiving reduced Costs and Increased

Proportionality? Rush before the Reforms?

Sheriff Court Juries awarding high sums in low cases?

Increased power to Sheriffs?

Increased access to justice? Quicker Resolution?

A Re-Badged Court of Session in Edinburgh?

Costs Reforms

“Review of Expenses and Funding of Civil

Litigation In Scotland”

Sheriff Principal Taylor

2007-2009

Consultation Paper 2011 and Responses 2012

Public Meetings 2012

Report 2013

Scottish Government Response 2014

Primary Legislation Awaited....Bill in 2015?

Costs Reforms

Summary:

• Post-Jackson Reform

• Costs-Budgeting

• QOWCS

• Referral Fees

• Damages Based Agreements

• Pre-Action Protocols

Insurance Bill 2014

Background

Law Commissions’ Joint Report / Draft Legislation 17.7.14

UK Government Objectives and Aims

3 Key areas:

• Pre-contract duty of disclosure and the effect of

representations

• Effect of Warranties contained in the policy

• An insurer’s remedies for fraudulent claims

Insurance Bill 2014

• Legislative Progress

• Possible Additions to the Bill

• Royal Assent – likely March/April 2015

• In force – October 2016

Future Reforms on the Horizon

• Mandatory Pre-Action Protocols

• Damages (Scotland) Bill – Limitation to increase

from 3 years to 5 years

• Fatal Accident Inquiry Reform

• Recovery of NHS Charges in Asbestos Cases in

Scotland?

• Outcome of Enterprise Act?

Q&A