MINISTER SETS A COLLISION COURSE WITH EUROPE

The DfT is on a collision course with European Community law

In a surprise twist to the long running saga over the UK’s failure to fully implement the European Motor Vehicle Insurance Directives, the Department for Transport has issued a bold statement today in which it maintains that the MIB Agreements do in fact ‘fulfil the UK’s obligations under EU motor insurance law’.  It also maintains that the proposals, set out in its consultation paper back in February, was ‘the result of a full review following discussions with the MIB over the past three years’.

The DfT has given a strong indication that it does not intend to change course. 

However the DfT has confirmed that it will not adhere to its original plan of publishing a final report this month.  It says that this is because it needs to enter into detailed discussions with the MIB. So something must have changed, even if we are not invited to share the secret! 

The DfT now plans to announce its final proposals later this autumn.

The DfT’s statement means that it is at loggerheads with those who are calling for extensive reform in this area.

More news will follow shortly.

DEPARTMENT FOR TRANSPORT DELAYS REFORM

The Rt Hon Stephen Hammond MP
Parliamentary Under Secretary of State for Transport

I understand that the Department for Transport, which had planned to publish a response to the consultation process this month, is about to announce a postponement to later this Autumn.  

The Minister's consultation paper, Review of the Uninsured and Untraced Drivers Agreements was published on 27 February this year.  It was criticised, here and elsewhere, for its limited scope. 

The Minister  received a number of detailed consultation responses advising him that his proposals were badly flawed.   This is because they fail to address the many long-standing defects in our national law implementation of European Community law.  These require the UK to conform to certain minimum standards concerning (i) the insurance cover for civil liability arising out of the use of motor vehicles and (ii) the compensatory protection afforded to victims.  

Although the Department has received very detailed submissions that exhaustively explain these problems,  itemising each infraction complained of, and setting out proposals for remedying these defects, no reaction to  has been forthcoming so far.

The Department needs to appreciate that unless the Minister gives a clear and unequivocal commitment to the wide-ranging reform that is required under Community law and that this is also accompanied by a sufficiently detailed explanation of the proposed reforms, together with an acceptable time-scale for implementing the reform process, then the Department is likely to be the subject of an infringement complaint to the European Commission.  Time is not on his side.

HEAR NO EVIL, SEE NO EVIL; SO NOTHING TO TELL?

I recently served a detailed request for information under the Freedom of Information Act 2000 on the Department for Transport.  I judged this necessary to enable those of us who are campaigning to reform our national law provision for victims of motor vehicles to contribute to a proper assessment of the impact that our defective national law provision is having on ordinary members of the public who are affected.

Unfortunately the Department’s response failed to provide most of the statistical data I asked for.  The fact that the Department does not have a clue as to how many road accident victims fall foul of the numerous exclusions and limitations of liability that pepper Part VI of the Road Traffic Act and the two MIB Agreements is, in itself, highly informative.  It suggests that scant consideration can have been given on the need for the imposition of so many arbitrary strike out clauses and other departures from the minimum standards of compensatory guarantee required under European Community law.  It demonstrates that the Department is unaware of the impact that these unlawful provisions have on the individuals that the compensatory guarantee scheme is supposed to protect.  As my information request indicated, this ‘is the kind of information that a responsible department would be likely to possess in order to properly discharge its duties of supervising and monitoring the activities of an outsourced service provider, particularly where they concern the justiciable rights of individuals’.

At present, the Department appears to be lumping the 1.2 million ‘uninsured’ drivers that plaque our roads into a single homogeneous group.  They have no idea how many of these comprise (i) drivers of cars with absolutely no insurance in place; (ii) hit and run drivers (who might have had some) or (iii) drivers of vehicles where there is some cover in place but the insurers are arguing (often wrongly) that the policyholder’s breach of contract entitles them to treat the claim as though it were an uninsured driver claim. 

The Department for Transport say they are now seeking some of this information from the MIB but that because the MIB are not a government department, the Freedom of Information Act 2000 does not apply. This ignores the fact that whilst  the MIB is a private company limited by guarantee it is also just as clear from its own constitution and from the terms of the MIB Uninsured and Untraced Drivers Agreements that it is under the Department’s control and supervision. Accordingly such data as the MIB possess that relates to these issues has always been within the control of the Department to access and disclose.  The Department has been invited to reconsider its position.

DfT MINISTER'S PROPOSALS FLOUT CABINET INITIATIVE

The Department or Transport’s proposed reforms to the MIB Uninsured and Untraced Drivers Agreements not only fail to meet the minimum standard of compensatory protection required by European law for millions of premium paying drivers and other members of the public but they also flout the Cabinet Office’s recent Good Law initiative as well as several important Rule of Law principles.

Click here to read the New Law Journal’s online news item.

Click here to read my New Law Journal article: Good Law?

The Minister has said that he will announce his final proposals by the end of July.  The DfT has so far declined to enter into a dialogue with those calling for more wide ranging reform in this area.

MoD LOSES THE ABILITY TO HIDE ITS NEGLECT

‘Where-ever law ends, tyranny begins’

John Locke

 Last month the lawyers representing a number of soldiers killed or injured during active service won a remarkable victory for the rule of law.  The claims arose out of three separate incidents spanning the initial Iraq conflict and its subsequent occupation.  In the first, a Challenger tank fired on another by mistake in the dark during the initial combat operations.  The other two claims featured military patrol vehicles, known as 'Snatch Land Rovers’ that were hit by improvised explosive devices during what has become known as 'The Insurgency'. 

The Challenger claims are founded on common law negligence, on the basis that the Ministry of Defence failed to provide suitable identification and recognition equipment and that it failed to provide adequate pre-deployment training.  All but one of the Snatch Land Rover claims were based on the contention that the Ministry of Defence had failed to take suitable measures to protect the lives of its servicemen, in circumstances where it ought reasonably to have done so, in the light of the real and immediate risk to life of soldiers required to undertake patrols in these lightly armoured vehicles, in breach of article 2 European Convention on Human Rights. One of these claims also included similar allegations founded in negligence.

In Smith & Ors v Ministry of Defence [2013] UKSC 41 the claimants successfully resisted a preliminary strike out application by the Ministry of Defence.  The Defence was based on a number of technical and public policy grounds including: (i) that the article 2 of the ECHR right to life did not apply to members of the armed forces serving abroad, (ii) that all the claims were barred by combat immunity and (iii) that in all the circumstances it was neither fair just nor reasonable for the MoD to owe a common law duty of care. 

On the jurisdictional issue: the Supreme Court considered a line of rulings from the European Court of Human Rights in Strasbourg to the effect that although the application of the ECHR is indeed generally restricted to the territory of member states, it can in exceptional circumstances be extended beyond its normal geographical constraint.  It can even encompass foreign territory that is under the military control of a contracting state.  This was held to apply in Öcalan v Turkey (2005) 41 EHRR 985 where a number of Turkish soldiers captured and then killed some Iraqi shepherds. 

The Supreme Court were unanimous in ruling, for the first time, that the jurisdiction of the ECHR is capable of extending to cover a contracting state’s treatment of its own armed forces serving abroad.  This ruling is subject to the caveat that the article 2 right to life must take into account the relevant context of the complaint and it cannot impose an impossible or disproportionate burden on the contracting state. 

However, the Supreme Court was divided on whether to strike out the claims on the basis of combat immunity or whether, given the operational circumstances, it was fair just or reasonable to impose a duty of care on the MoD.  

The public policy imperative behind combat immunity is self evident: no state can conduct dangerous military operations effectively if in the exigency of battle its soldiers believe that every operational and tactical decision will expose them to the risk of civil litigation.  However, as Mulcahy v Ministry of Defence [1996] QB 732 and many earlier authorities confirm, combat immunity is an exception to the basic rule of law and as such it is something that should be applied sparingly and kept within narrow confines.

The Defence also relied on the line of authorities emanating from Hill v Chief Constable of West Yorkshire [1989] AC 53, to contend that just as there are strong public policy grounds for holding that the Police do not owe members of the public a duty of care in the execution of their duties, the same precept should apply to servicemen in active operations of this kind. 

A majority took the view that all these matters were highly fact specific issues which could not be disposed of at a preliminary hearing without consideration of the evidence.  Consequently, the Defendant’s strike out application was dismissed.

The claimants are not complaining about being exposed to combat risks and other unavoidably dangerous operations.  Instead they allege that the Ministry of Defence exposed its servicemen to a range of unnecessary and preventable risks:  caused by lack of suitable training and / or the provision of inadequate equipment as well as from the inappropriate assignment of ‘Snatch Land Rovers’ in situations where improvised explosive devices were known to be deployed.  Although these claims can now proceed, the final outcome is far from certain.  

It seems that much will turn on the chronology of events and when, precisely, each act of negligence or breach of duty is alleged to have occurred.  Lord Hope put it this way:  ‘It will be easier to find that the duty of care has been breached where the failure can be attributed to decisions about training or equipment that were taken before deployment, when there was time to assess the risks to life that had to be planned for, than it will be where they are attributable to what was taking place in theatre.’ [99].  In his dissenting judgment, Lord Mance identified significant problems with this approach [122 to 127].  These issues will no doubt be considered at length if and when the claims proceed to the main trial on liability.

However there is one permanent legacy from this ruling. The Ministry of Defence can no longer complaisantly rely on public policy to dismiss, out of hand, accusations of grave and culpable neglect of its servicemen.  These claims must now be subjected to proper judicial scrutiny and I think that there will be many who welcome this. 

Meanwhile, the Ministry of Defence appears destined to continue to squander gargantuan sums in its procurement of excruciatingly expensive white elephants, seemingly with impunity.  Such profligacy must have had a part to play in the Ministry’s failure to equip its Challenger tanks with vehicle identification equipment or its Snatch Land Rovers with electronic IED countermeasures in Iraq.  It will be recalled that other easily preventable tragedies have resulted from the absence of some very basic items of kit: such as air conditioning or body armour.  Whilst it is clearly not in the national interest to impede our armed forces with the threat of civil liability if things should go wrong in the preparation for or conduct of active operations against the enemy, it must nevertheless be in the public interest to expose systemic failings in procurement as well as failings on the ground to properly train and equip our servicemen, especially where these blunders are responsible for lost lives and grievous injury.  

Controversy has dogged the MoD's procurement of  two vast aircraft carriers.  

Electronic Counter Measures against IED

EMPLOYERS' LIABILITY AFTER SECTION 69

'Was I deceived, or did a sable cloud 

Turn forth her silver lining on the night?' 

John Milton, Comus, 1634

As my previous post acknowledges, in A world turned upside down, section 69 of the Enterprise and Regulatory Reform Act 2003, abolishes civil liability for breaches of statutory health and safety regulations conferred under section 47 of the Health and Safety at Work Act 1974.  This will deny many injured victims the compensatory redress they are currently entitled to if they cannot establish and prove their claims under ordinary common law negligence principles.

Some have argued that the effect of section 69 is to ‘put the health and safety clock back to Victorian times’. Fortunately, the reality is not nearly so bad and I have four main reasons for thinking so.  

The first has to do with the very essence of the common law as a flexible and living concept.  It has evolved considerably since the nineteenth century.  It took three giant strides beginning with Lord Atkins ‘neighbour’ principle from Donoghue v Stevenson [1931] UKHL 100.   Next came Mr Justice Swanwick’s test for determining the standard of foresight expected of a  ‘reasonable and prudent employer’ in Stokes v Guest 1968 [1968] 1 WLR 1776:   

     “…the overall test is still the conduct of the reasonable and prudent employer, taking positive thought for the safety of his workers in the light of what he knows or ought to know; where there is a recognised and general practice which has been followed for a substantial period in similar circumstances without mishap, he is entitled to follow it, unless in the light of common sense or newer knowledge it is clearly bad; but, where there is developing knowledge, he must keep reasonably abreast of it and not be too slow to apply it; and where he has in fact greater than average knowledge of the risks, he may be thereby obliged to take more than the average or standard precautions”.

Then, for those unusual cases where no obvious precedent exists for a duty of care, there is the tripartite test set out Caparo Industries v Dickman [1990] UKHL 2. 

Another reason for optimism has to do with the fact that the concept of reasonableness, which lies at the heart of common law tort of negligence, is a contextual phenomenon.  What is ‘safe’ or ‘reasonable’ is to be judged by the standards of the time.  Consequently, as our understanding of the causes of industrial disease and accidents increase, so too does the generally acceptable tolerance of justifiable risk diminish.  These factors influence the evolution of the common law standard of care to be expected by the reasonable and prudent employer.  Equally relevant are the improved standards of health and safety imposed on the United Kingdom by the European Community.  An obvious example is the European Framework Directive (89/391/EEC) and the plethora of Regulations that transpose this and other European Directives, starting with what became known as the ‘Six Pack’ but including much later initiatives such as the Work at High Regulations or the Construction (Design and Managements) Regulations 2007.  Although the vast majority of these regulations will not attract civil liability where they are breached, thanks to section 69 of the Enterprise and Regulatory Reform Act 2013, the set new and often heightened standards.  Similarly, the Health and Safety Executive’s Guidance (now freely downloadable online) impose a high standard of care that any court applying a common law test can hardly ignore.  So with the loss of strict and absolute liability for breaches of statutory health and safety regulations, we may yet see a new emphasis given to Mr Justice Swanwick’s test so it remains as relevant to a post s69 Enterprise and Regulatory Reform Act employer as is does now. 

A third reason for cautious optimism is that whilst s69 does do away with the statutorily imposed reversal of the burden of proof, there will nevertheless be occasions when a claimant will be able to establish on common law principles a prima facie case against an employer and thereby to effectively impose a reversal of the burden of proof that way.  Practitioners are well used to working with this concept, in its statutory manifestation such as in the oft cited precedent of Larner v British Steel Plc [1993] IRLR 278.  They will now be encouraged to explore the full extent to which res ipsa loquitur ,its common law cousin, can be applied to a work place accident claim.  Take for example, a case where an employer has a long history of similar incidents or injuries that were reasonably preventable.  If a claimant is injured in almost identical circumstances that were (i) under the employers effective control and (ii) where the claimant is not in a position to know precisely what act or omission the employer is responsible for and for which no other plausible explanation exists, then where a court concludes that what happened is more consistent with negligence than not, it may may well find that the circumstances raise a rebuttable presumption of negligence against the employer.  There may also be occasions where, even absent a culpable track record, the circumstances of the accident are such that in the absence of any alternative explanation the circumstances are more consistent with an employers’ negligence than not so as to raise an inference of negligence.  Every law student will remember the barrel of flour case: Byrne v Boadle [1861-73] All ER Rep Ext 1528.  However, it will readily be seen that the scope of this common law evidential rule has a narrower application the statutory imposed alternative.

Finally, there is the hope that the judiciary, who will be sensitive to the new balance of advantage introduced by s69 will develop the common law where it can.  After all it was the judiciary that coined the equitable maxim: where there is a right there must be a remedy. Perhaps this is not too fanciful a hope.  One need only recall to mind the extraordinary development of the doctrine of vicarious liability in recent years;  to cover sexual abuse by priests.

Furthermore, for those practitioners who are ready and prepared to fully utilise the extensive armoury of tactical weapons contained within the Civil Procedure Rules and Pre action protocols, as well the new opportunity presented by qualified one way cost shifting, there is every chance that a great deal of profitable work will be gained.  It seems almost inevitable that even more employers’ liability claims will be contested and fall out of the extended portal.  It is just conceivable that by 2014 some will think that they have never had it so good!

A WORLD TURNED UPSIDE DOWN

'They count it a sin, when poor people come in.'

From a 17th Century ballad, A world turned upside down

Many view s69 of the Enterprise and Regulatory Reform Act 2013, which will abolish the automatic right of action for breaches of statutory health and safety laws, as an unnecessary and regressive step.  Equally clear is the unfortunate trend of this and previous governments of introducing reforms that appear to motivated less by informed inquiry than by political invective and grandstanding. 

Take for example the Labour Government’s obsession with the ‘perception of compensation culture’.  The government was reacting to a series of anecdotal reports, usually originating in the tabloid press.  These featured various instances of imbecilic ‘risk adverse’ behavior by various minor officials.  Apparently, adverse risk assessments were increasingly being cited by the over officious or credulous to justify absurd decisions to ban or cancel even the most mundane and ordinary time honoured pastimes.  This was thought to be a reaction to the threat of being sued by an increasingly litigious society.  We were told that this ‘compensation culture’, or the ‘perception’ of it, threatened to curb the enjoyment of many innocent and everyday activities.  It decided that something had to be done, or at least, something had to be seen to be done. 

The Government’s response was to enact section 1 of the Compensation Act 2006.   This empty gesture was intended to curb the deterrent effect of litigation on ordinary people’s decision making.   All section 1 actually achieved was to petrify in legislative form an evolving principle that the House of Lords had recently formulated with greater eloquence and clarity in Tomlinson v. Congleton Borough Council [2003] UKHL 47. 

The same phantasmagoric menace has lingered on to haunt our present government, this time on health and safety issues.  In the opening passage to his 2010 report, Lord Young declared: ‘I believe that a ‘compensation culture’ driven by litigation is at the heart of the problems that so beset health and safety today’[1].  However the Government’s own statistics undermined this assertion: they showed that far from employers liability claims numbers increasing, they were in fact reducing.  That did not deter the Prime Minister from appointing Lord Young, as his ‘Enterprise Czar’ to tackle this issue.  Then in 2012 the Prime Minister announced a startling New Year’s resolution: he vowed to ‘kill off the health and safety culture for good’[2].  

It is worth noting that the latest Department for Work and Pensions’ Compensation Recovery Unit data actually shows a reduction of just over 7% in the number of employers’ liability claims from a high of 98,478 in 2006/2007 down to  91,115 in 2012/1013[3]. 

As every personal injury practitioner knows only too well, this Government has rushed through swathes of reform to our civil justice system with a missionary zeal, apparently in the belief that one can have too much of a good thing and that if ordinary people have access to justice that is too readily available, this is something that should be curbed.  Apparently, fundamental rights now come with a price tag.  Measures included the ineffective ban on referral fees.  This was intended to curb all those annoying adverts and unsolicited calls and texts and to deliver substantial savings in legal costs; only it didn’t. It is common knowledge that the ban can circumvented with ease by claims management companies and lawyers: through alternative business structures and other tactical machinations.  All the Government achieved was to introduce a series of anti-competitive measures that reduce consumer choice for legal services.  Another disincentive to litigation was the dismantling of legal aid and ending the existing policy of awarding a successful party a full recovery of their reasonable and necessary legal costs and expenses under Legal Aid Sentencing and Punishment of Offenders Act 2013.  Henceforth, claimants must fund part of the cost of pursuing their claim from their compensatory entitlement.  These measures clearly work to the advantage of liability insurers and defendants at the expense of claimants who are ultimately denied a full recovery of damages. 

What s69 of the Enterprise and Regulatory Reform Act 2013 will achieve it abolish the civil right of action for breaches of health and safety regulations.  It should be remembered that a breach of statutory duty is only actionable where someone has actually suffered loss or injury caused by that breach.  What the soon to be amended section 47 (2) of the Health and Safety Act 1974 presently achieves is to confer a right of action for a breach of statutory duty where loss of damages is caused thereby. 

Section 47, in conferring the right of action,  has nothing to do with providing windfall gains to the opportunistic.  Nor does it, of itself, impose an absolute or strict liability on an employer.  Indeed the number of instances where our health and safety regulations do impose absolute liability are exceedingly rare indeed.  Furthermore, judicial attitudes towards strict has recently become more cautious and restrictive.  There is a tendency to impose at least a degree of culpable foresight so as to avoid the injustice of holding an otherwise completely faultless employer liable.  Take for example Supreme Court’s ruling in Baker v Quantum Clothing [2011] UKSC.  There, a majority ruled that the duty imposed by section 29 Factories Act 1961 to ensure that a place of work is ‘safe’ did not impose an absolute and unfaltering standard of safety.  The duty is qualified by what the reasonable and prudent employer at that time would have understood to have been safe. 

It was open to the Government to qualify by reference to reasonable practicability all strict liability health and safety legislation or to make other discrete adjustments, such as to extend the defence of reasonable practicability so that it applied uniformly across all health and safety strict liability claims.  This would have been in keeping with its own expert’s recommendations.  It will be recalled that Professor Löfstedt’s report on health and safety could find no case for radically altering current health and safety legislation[4].  Instead the Government chose to ignore this and to throw the health and safety baby out with the bathwater. It has determined on abolishing completely the statutory actionability of breaches of health and safety regulations. 

One of the justifications relied on by the Government was the perceived need to ease employers’ fears of being sued and to save them the cost of over compliance.  This is muddled thinking.  Surely the sensible way for any employer to address such concerns is to undertake a suitable and proportionate risk assessment and to implement suitable measures to protect his employees health and safety by either avoiding the risk completely or minimising it.  If a business is foolish enough to squander resources on ineffective or unnecessary measures, then that suggests that their health and safety risk assessments are flawed. 

Unfortunately section 69 seems likely to compromise the effectiveness of our health and safety legislation because it removes an important financial disincentive to illegal conduct, at the very time when the other health and safety sanctions and controls are increasingly compromised due to lack of funding.  It is well known that the number of Health and Safety Executive inspections and prosecutions have declined sharply in recent years.  

Another consequence of section 69 is that it will increase the evidential burden on a victim of establish a claim under the common law; tipping the balance of advantage in any litigation decisively in the employer’s favour.

It seems that we live in a diminished age, if as now, successive Governments view with intrinsic suspicion the ability of ordinary people to freely assert their legal rights under the Rule of Law through the courts system.  Somehow a citizen’s entitlement to the protection afforded by health and safety laws, once perceived as a virtue, is now thought by some to be some kind of impediment to legitimate business interests.  Be that as it may, s47 of the 1974 Act is destined to be turned on its head from 1 October 2013.  The amendment, introduced by section 69 of the Enterprise and Regulatory Reform Act 2013, will remove the automatic right of action that s47 confers for breaches of a health and safety statutory duty. 

Does anyone seriously believe that this will make an iota of difference to those employers, school heads and hospital administrators who cannot see the wood for the trees?   Surely if a manager is not equipped to apply a common sense and proportionate approach to health and safety risk assessment, isn’t the logical response to retrain or replace them?  Sadly, the legacy of this ill-conceived reform legacy lies in a different area.  It will deny a large number of injured victims the redress they currently enjoy unless they are able to establish their claims under more stringent common law principles.  For those lucky enough to be able to establish a common law claim, this will come at the expense of increased legal costs.  For most claimants, these costs will have to be funded in part from the compensatory award.  It seems likely the s47, as amended, will act as a positive disincentive for the less scrupulous.  If the likelihood of civil liability is significantly reduced along with the risk of prosecution, then some employers will be motivated to ask: why do we need to bother with health and safety at all?

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[1] Common Sense and Common Safety, Lord Young, October 2010

[2] David Cameron’s announcement, reported in the Guardian, 5 January 2012.

[3] See Department for Work and Pensions website: http://www.dwp.gov.uk/other-specialists/compensation-recovery-unit/performance-and-statistics/performance-statistics/

[4] Reclaiming health and safety for all: an independent review of health and safety legislation, May 2011