qbe technical claims brief august 2011

7/28/2019 QBE Technical Claims Brief August 2011

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Technical claims brief, monthly update Aug 2011

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News

Insurers to financeAnti Insurance FraudPolice Unit and Register

The General Insurance Council has

committed to funding a dedicated police

insurance fraud investigation unit and an

insurance fraud register.

The police unit is due to become

operational on 1 January 2012. It will

investigate insurance fraud cases reported

by insurers, regional police forces and

the Insurance Fraud Bureau. It will have

35 full-time police officers and other

specialist support staff led by a Detective

Chief Inspector. It will also have access

to specialist police resources such as

surveillance and forensic teams. The

unit will be based at the City of LondonPolice headquarters but will operate

throughout England and Wales with

facilities to investigate cases in Northern

Ireland and Scotland.

The Insurance Fraud Register is a

database owned by the insurance

industry, which will pool details of all

known insurance fraudsters. It is due

to become operational in early 2012.

Comment: the Governments Transport

Select Committee called on insurers back

in March o this year to do more to tackle

insurance raud generally and specifcally

to und a specialist anti-insurance raud

police unit (see April 2011 Brie). The

industry has responded positively and

can only hope that the judiciary will act

in a similarly positive vein to insure that

raudsters caught by the new police unit

are punished appropriately.


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Second-ever UK CorporateManslaughter chargebrought by CrownProsecution Service

The Crown Prosecution Service (CPS)

has announced that Lion Steel Equipment

Ltd will become the second company

to be prosecuted under the Corporate

Manslaughter and Homicide Act 2007

(CMHA). The charge arises from the

death of an employee who fell through

the roof of the companys headquarters

building in 2008.

Three of the companys directors will

also be charged with gross negligence

manslaughter under the CMHA. The first

hearing is scheduled for 2 August 2011 at

Tameside Magistrates Court.

Comment: the only other company tobe prosecuted under the CMHA to

date was a small company, which

could not aord to pay the level o fne

set out in the sentencing guidelines.

Cotswold Geotechnical Holdings were

fned 385k as opposed to the 500,000

to several million pounds fnes set out in

the guidelines.

The case will hopeully give some

guidance as to the level o fnes a

larger company is likely to ace.

UK businesses foreseetough times ahead

QBEs sixth national survey of UK

businesses paints a rather gloomy

picture of fragile economic recovery.

The survey of 400 UK businesses of

all sizes reveals that 72% of businesses

expect a full economic recovery to take

two or more years and that 43% will

find it difficult to continue trading if

current economic conditions continue

for another 12 months. Inflationary

pressures are hampering recovery with

57% citing the negative impact of rising

commodity prices.

On a more positive note 60% of

businesses say that they are now

operating more efficiently and 42%

have benefitted from the demise of

competitors suggesting that

businesses that can survive the

recession may prosper in future.

Comment: Terry Whittaker QBEs

Managing Director Distribution has

warned businesses against cutting

corners on insurance cover and thatopting or the cheapest quote ahead

o quality o service and fnancial

strength o the provider could prove

to be a alse economy.


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Part 36 Costs consequencesapply despite exaggerationof claim: Trevor Fox vFoundation Piling Ltd - Courtof Appeal (2011)

The claimant injured his lumbar spine after

falling at work. Liability was admitted by

his employers. The claimant alleged that

he had suffered serious injury and served a

schedule claiming financial loss in excess

of 280,000 plus general damages.

The defendant however had obtained

surveillance evidence showing that the

claimant was not as seriously injured as he

alleged. The defendant had also obtained

medical evidence saying that any genuine

symptoms were due to the acceleration of

a pre-existing condition.

The defendant made a Part 36 offer of

63,000 of which the claimant wouldreceive 23,550 net of recoverable

Compensation Recovery Unit (CRU)

benefits. The claimant rejected this offer

and made a counter offer of 150,000

worth 110,551 to the claimant net of

CRU benefits.

Following the receipt of a joint medical

report confirming that the claimant was

suffering a one or two-year acceleration

of a pre-existing condition, he revised

his claim down to 59,451 plus general

damages. In response, the defendant

made a new Part 36 offer of 37,500

worth 31,702 to the claimant. The total

offer figure was less but the claimant

would actually receive more as the

amount of repayable CRU benefits to be

refunded had reduced because of the

shorter period of incapacity caused by

the accident. Settlement was agreed with

costs to be determined by the court.

The judge at first instance ordered

the claimant to pay the costs of the

defendant from the date of expiry of the

first Part 36 offer on the basis that the

defendant was the successful party and

that his conduct in exaggerating his claim

justified a costs order against him. The

claimant appealed.

The Court of Appeal held on the

first issue that Part 36.10 of the Civil

Procedure Rules (CPR) was clear that

when assessing whether a claimant

had beaten a Part 36 offer it was the

net amount that the claimant received

after CRU benefits were refunded that

counted, not the value of the gross offer.

On this basis, the claimant had clearly

done better on the second offer than

the first and the defendant was not the

successful party.

On the second issue, the claimant had

recovered much less, than he originally

claimed but the trial judge had not found

him guilty of any misrepresentation and it

was not for the Court of Appeal to make

this finding. The claimants conduct did

not therefore justify the costs order

against him.

The defendant had medical and

surveillance evidence at an early stage

and should have protected their position

by making a realistic Part 36 offer at an

early stage. The courts had gone too far

in moving away from a strict interpretation

of Part 36 and this had led to uncertainty

and expensive satellite litigation. The

claimants appeal was allowed.

In the context o personal Injury

litigation where the claimant

has a strong case on liability

but quantum is inlated, the

deendants remedy is to make

a modest Part 36 oer. I the

deendant ails to make a suicient

Part 36 oer at the irst opportunity,

it cannot expect to secure costs

protection. Dierent considerations

may arise in cases where the

claimant is proved to be dishonest,

but (on the judges indings) that is

not the case.

Lord Justice Jackson

Comment: The Court o Appeal did

not agree with a trial judge penalising

exaggeration in this case but did approve

it in the Abbot V Long case above. There

were no Part 36 oers in Abbott and this

judgment is perhaps another indication o

Lord Justice Jacksons determination to

ensure that Part 36 is interpreted strictly

and consistently.


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Retention of tenderedpayment deemed to besatisfaction of costs:Ida Okadigbo v TheCommissioner of Police forthe Metropolis - SupremeCourts costs Office (2011)

In late November of 2010, the defendant

made a Civil Procedure Rules (CPR)

Part 47.19 offer for roughly a third of

the claimants costs, stated to be in full

and final settlement. A cheque for the

sum offered was sent with the letter

and although the claimants solicitors

did not respond to the offer letter, they

banked the cheque 12 days later. Having

heard nothing for some eight weeks the

defendant wrote to the claimants solicitors

saying that the parties had achieved an

accord and satisfaction i.e. the claimants

costs were settled.

The claimants solicitors responded saying

that simply because they had not replied

to the defendants offer letter it did not

mean that the offer had been accepted

and subsequently set the matter down

for a detailed assessment hearing. The

court was asked to decide as a preliminary

issue whether the parties had achieved an

accord and satisfaction.

The defendant cited Court of Appeal

guidance on commercial cases that the

test was what a reasonable person would

have been led to believe by the conduct

of the other party. The claimant countered

that payments made under CPR 47.19

should be viewed in the light of normal

costs practices where cheques could be

accepted either in full and final settlementor as payment on account.

Senior Costs Judge Hurst rejected

the claimants arguments. He saw no

reason why the legal principles governing

commercial transactions could not also

be applied to costs. The defendants offer

was clear and if the claimant had wished

to reject it whilst retaining the money

tendered then (in line with the Court of

Appeal decision in Stour Valley Builders

v Mr and Mrs TP Stuart) she should

have made her position clear within a

reasonable period. On the facts of this

particular case, a reasonable period would

have been three weeks. The parties had

achieved an accord and satisfaction.

Comment: although the length o a

reasonable period will vary depending on

the acts o a case, a party receiving a

cheque in support o an oer they wish toreject, should make their position clear as

soon as possible ater banking the money.

Our thanks go to Weightmans Solicitors

for telling us about this case.


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Fraud

Claimant jailed for signingfalse Statement of Claim:Edward Nield and AcromasInsurance Co Ltd v GrahamLoveday and Susan Loveday -District Court (2011)

The applicants Mr Nield and his insurersAcromas sought to have the respondents

Mr Loveday and his wife committed for

contempt of court following an injury claim

made by Loveday.

The respondent Loveday alleged that he

had become a housebound invalid after

being injured in a road traffic accident

with Nield. Liability was admitted by

Nield but the extent of Lovedays injuries

was disputed. Nields insurers obtained

surveillance evidence showing that

Loveday could drive, walk unaided, climb

steps without difficulty and work on cars

all of which he claimed he was unable to

do post accident. It was also discovered

that he had driven to Italy and back on

holiday rather than been pushed through

the airport in a wheelchair in order to fly

there. Faced with this evidence Loveday

agreed to settle the original action for a

small proportion of the sum claimed and

agreed to pay Neilds costs.

Loveday had set out the false claims abouthis injuries in a signed witness statement

supported by a signed witness statement

from his wife. At the application hearing,

Mrs Loveday admitted contempt of court

but Mr Loveday maintained he had not

known what he was verifying.

Mr Loveday was found guilty of contempt.

The judge held that he had misled

his solicitor who drafted his witness

statement and that Loveday had clearly

known its exact contents as the draft

copy was marked with many handwritten

annotations containing information known

only to him. Both Loveday and his wife

understood the risks of signing statements

they knew to be untrue as his solicitor had

warned them in writing that they could be

jailed for contempt. Loveday must have

known that his blatantly false statements

would interfere with the course of justice.

He was given a nine month custodial

sentence. His wife received a six month

sentence suspended for eighteen months

in light of her guilty plea and previous good

character.

Comment: the custodial sentence passed

on this blatant raudster will hopeully, havesome deterrent eect on others seeking to

grossly exaggerate their claims.


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Liability

School not liable for failureto clear Rainwater:Maddison Hufton vSomerset County Council- Court of Appeal (2011)

A schoolgirl suffered a serious ligament

injury to one knee when she slipped on a

wet floor in her school hall. She brought

proceedings alleging that the school staff

had been negligent in permitting pupils

to walk directly from the playground into

the hall when it was raining, making the

floor wet. The school denied liability.

When it was raining, the direct entrance

was closed to pupils who were then

only permitted to enter via a foyer, which

stopped them treading water into the hall.

At first instance, the judge dismissed the

claim finding that the schools procedures

were reasonable and that the claimant had

simply suffered an unfortunate accident.

The claimant appealed arguing that the

school was negligent in having no proper

system for stopping the floor getting wetor for drying it if it did become wet.

The Court of Appeal held that the schoolsrisk assessment was reasonable and had

identified and put in place appropriate

control measures. If rain started during a

break, it would take a little while to close

off the direct entrance to the hall and this

was probably what had happened when

the accident occurred. The measures in

place met the standard of reasonable care

the law required. The evidence was that

this was not a frequent problem requiring

a system for mopping water up.

It is not possible, and the law

does not require, the occupier o

premises to take measures, which

would absolutely prevent any

accident rom ever occurring. What

is required both by common law

and by section 2 o the Occupiers

Liability Act 1957 is the exercise o

reasonable care.

Lord Justice Jackson

Comment: occupiers in England and

Wales may take some comort that the

Court o Appeal has recognised that the

deendants could not realistically cater or

every small brie accumulation o water that

might cause a all. The law requires only a

reasonable standard o care o occupiers.


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Unsigned steps nothazardous to wheelchairusers: Brenda Clark vBourne Leisure - Courtof Appeal (2011)

The claimant suffered serious injury

when she tried to negotiate steps at the

defendants bar in her wheelchair and fell

out. The bar was on two levels with the

different levels connected by a ramp on

one side of the room and steps on the

other. The claimant travelled up the ramp

to the upper level but later tried to go

back down the steps mistaking them for

another ramp.

At first instance, the claimant successfully

argued that the steps were a concealed

hazard and that the premises were in

breach of the Occupiers Liability Act 1957.

The defendant appealed.

The Court of Appeal held that the judge

at first instance had erred in placing

too great a weight on pre-action

correspondence. The defendants legal

department had mistakenly claimed that

there were signs and warning tape at

the top of the steps to warn people of

the drop in level when in fact there were

not. The judge had erred in interpreting

this as an admission by the defendant

that warning signs and tape should have

been placed at the top of the stairs. In

any event, what others including the

defendant, thought about safety, whilst

relevant, should not be determinative.

It was for the judge to come to his own

decision. On the evidence, the ramp

provided a safe means for the claimant to

go from one level to another. The stairs

were clearly visible and any wheelchair

user taking reasonable care for his or

her safety would avoid using them.

The premises were reasonably safe for

wheelchair users. The appeal was allowed.

I think that the judge was wrong

to conclude that the claims about

signage and tape amounted to a

concession that such measures

were necessary. I think Mr Aldis

(deendant counsel) is right to say

that the parties appear to have

been at cross-purposes or much

o the time. Also it appears that

the person in the legal department

o Bourne Leisure Ltd had not

at any stage taken ull written

instruction rom Mr Green the

manager. She was no doubt

unwise to write as she did but I do

not think that her words could be

taken as a concession as to the

need or warning signs or tape in

relation to the steps.

Dame Janet Smith

Comment: This case serves as a

reminder to be very careul about what issaid in pre-action correspondence and to

investigate thoroughly beore discussing

liability with a claimants solicitor. The

deendants legal department appear

to have been conused as to the

circumstances o the accident and

were corresponding with the claimants

solicitors without frst obtaining ull

instructions rom the deendants site

manager. They were ortunate that their

inaccurate written comments did not

prejudice the deence.


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Quantum

Court Allows Cost ofAlternative Treatment:Mohammed Najib v JohnLaing Plc - High Court (2011)

The claimant contracted mesothelioma

after exposure to asbestos whilst

employed by the defendant company. He

sought damages including a sum of just

over 15,000 for photodynamic therapy.

This was a treatment not available through

the NHS and well outside of mainstream

medicine where high doses of light were

used to try to destroy cancerous cells.

The defendants objected to paying for this

treatment which had failed to reduce the

tumour and which was not supported by

the claimants treating NHS physicians.

The claimant had opted for this unusual

treatment because he had been told

it could extend his life and because

the feared the painful side effects of

chemotherapy.

The court allowed the cost of the

treatment on the basis that, although the

treating physicians had not endorsedit, neither had they told the claimant

not to have it. The doctor who had told

the claimant about the treatment also

appeared to have appropriate medical

qualification. The treatment was expensive

but not unreasonably so given that the

claimant had been told it could extend his

life expectancy from two to seven years.

Comment: A court may well have

sympathy or a claimant suering pain

and/or reduced lie expectancy and on

the basis o this judgment is unlikely to

disallow the cost o alternative therapies

unless the claimant has been told in plain

terms that they will be ineective.


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Record Irish DamagesAward: Ingle v Petmaniaand OKeefes of Kilkenny Ltdand Health Service Executive -Irish High Court (2011)

The claimant suffered catastrophic brain

damage after contracting chlamydia

psittacosis, a bird disease that can also

infect humans, at her place of work.

The disease can be spread by dust

from the dried faeces of infected birds.

The claimant is thought to have inhaled

infected dust whilst working in a pet shop

that had failed to properly clean its parrot

cages or provide adequate health and

safety training.

The claimant received a lump sum

of3m and will also receive periodical

payments to cover the cost of her

annual care once enabling legislationis in place. The unfortunate claimant

cannot breathe normally, feed herself

or walk and requires 24-hour care

estimated as costing 450k a year.

Assuming the claimant lives as long as

she is expected to her total damages

could exceed the current record for the

largest Irish personal injury settlement

of7.5m.

Comment: another Irish case has been ear

marked or periodical payments despite the

act that enabling legislation or this type

o settlement is not yet in orce. Drating

enabling legislation is proving difcult, as

the Irish state is not in a position to oer a

convincing guarantee o payments in the

event that a compensator ails.


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3115/TAAMAUG2011

Q uropean Operations is a trading name of Q nsurance (urope) imited and Q Underwriting imited. Q nsurance (urope) imited and Q Underwriting imited

are authorised and regulated by the inancial ervices Authority. Q Management ervices (UK) imited and Q Underwriting ervices (UK) imited are both Appointed epresentatives

QBE European Operations

Plantation Place

30 enchurch treet

ondon

3M 3Dtel +44 (0)20 7105 4000

fax +44 (0)20 7105 4019

[email protected]

www.Qeurope.com

qbe technical claims brief august 2011

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