MBL MOTOR CLAIMS UPDATE

I am presenting a full day's training in Manchester on 30 April 2014 on motor claims for MBL Seminars.

This 6hr CPD course will bring you bang up to date - not just on the latest liability decisions, statute and extra-statutory provision but it also examines the new thinking behind the changes.

It includes cutting edge analysis on our national law provision for ensuring that victims recover their full compensatory entitlement.  I promise ground breaking and thought provoking insights that overturn conventional perceptions about the sufficiency and completeness of our national law in this area. Major reform is an inevitability and already partly underway.  Because the reforms are required to repair extensive defects in the Road Traffic Act 1988, the EC Rights Against Insurers Regulations 2002 and both MIB Untraced and Uninsured Driver Agreements - practitioners need to know about these flaws now if they are to protect their clients' legal entitlement under UK and Community law. The very prospect that these reforms are likely means that all of our textbooks are now out of date.

This training offers ground breaking academic insights presented in a practical and easily digestible form that is relevant to day to day practice.

So, if you want to stay ahead of the crowd and be entertained by some fascinating cases - book now!

Please apply to those lovely people at MBL Seminars direct for booking details: 0161 793 0984.

APIL ASBESTOS CLAIMS TRAINING

A comprehensive guide to running a successful asbestos claim

Daniel Easton and I are delighted to be presenting a full day's training on asbestos claims for the Association of Personal Injury Lawyers, I think for the third year in succession.

This time the training will take place in Leeds and Bristol.

Industrial disease litigation remains a profitable and intrinsically rewarding, if challenging, area of practice. Our course is designed to help lawyers re-skill in this highly technical area of practice.  We have much new material to share so this training also serves as a useful update for the busy practitioner.

Please apply to APIL direct to make a booking.  Follow this link for the flyer and booking form.

FATAL ACCIDENT ACT 1976 DEPENDENCY NOT APPLICABLE TO ACCIDENTS ABROAD

Cox v Ergo Versicherung AG [2014] UKSC 22

The Supreme Court has ruled that the widow of Major Cox, who was killed when he was knocked off his bicycle in Germany, is not entitled to the more generous approach to quantifying her loss under the Fatal Accidents Act 1976. 

The driver responsible was insured with German based insurer, Ergo Versicherung AG. Mrs Cox brought a direct action in England against the foreign insurer, under articles 9 and 11 of the Brussels I Convention (Council Regulation (EC) No 44/2001 of 22 December 2000) applying the FBTO Schadeverzekeringen NV -v- Jack Odenbreit, CJEU 2007 Case 0463/06see my earlier post Tale of Two Cases.

Liability was not disputed. 

The accident predated the application of Rome II (Council Regulation (EC) No 864/2007 of 11 July 2007 on the law applicable to non-contractual obligations).  However it was common ground that the effect of the Private International Law (Miscellaneous Provisions) Act 1995 was that German law applied to the claim.  Mrs Cox contended that the Fatal Accidents Act 1976 should still govern the way her damages should be assessed.

The applicable German law (governed by s 844 of the Bűrgerliches Gezetzbuch) requires a victim’s right to maintenance be assessed on a full restitution basis but it has strict rules against double recovery. 

By comparison, the Fatal Accidents Act 1976 creates a statutory exception to our own common law rule against double recovery.  This occurs in the way that a dependency claim is treated as crystallising from the moment of death.  Sections 3 & 4 expressly leave out of account the re-marriage of the widow or her prospects of re-marriage as well as benefits that have or will or may accrue as a result of the death.  This exception is a result of deliberate Government intervention which was categorised by a majority of the Supreme Court as a matter of substantive law.

The Supreme Court followed Harding v Wealands [2006] 2 AC 1 which treats the heads of of damage as a matter of substantive law to be determined by the foreign applicable law (in this case Germany), whereas the approach to be adopted in their assessment is a question of procedure that is governed by the law of the forum (in this case, England).  

Since the Fatal Accident Act 1976 does not have extra-territorial jurisdiction its special rules for quantifying a dependency claim do not apply to Mr Cox's accident in Germany.  Although English law applied to the procedural aspects of quantifying Mrs Cox’s loss, the court would have to apply the relevant German law governing the basic restitutionary principles.  The result was that the normal common law rule against double recovery applies to this claim, so that Mrs Cox was entitled to her net loss only. This is consistent with the common law ‘not a penny less nor a penny more’ principle.

This ruling is also just as relevant to accidents on or after 11 January 2009, which are governed by Rome II.  Under Rome II the old distinction between substantive and procedural law no longer applies. But see my earlier post CPR rules apply to foreign accident claims which considers the implications of  Wall v Mutuelle de Poitiers Assurances [2014] EWCA Civ 138.

WORST OF BOTH WORLDS

Flawed proposals

In February 2013 the Parliamentary Under Secretary of State for Transport, Stephen Hammond MP, proposed that the Untraced Drivers Agreement 2003 between the Department for Transport and the Motor Insurers Bureau (MIB) should be revised to require the approval by an independent arbitrator of any settlement made behalf of a child or mentally incapacitated applicant. 

So far, so good but this recommendation does not go nearly far enough. This is partly because the Minister's proposal only applies where a child or mentally incapacitated applicant has no independent legal advice or representation and party due to the absence of any uniform provision for independent legal advice and representation. 

I hope to demonstrate in this article why the appointment of an arbitrator at the conclusion of the MIB’s investigation does not provide an effective guarantee that the claim will be investigated properly or fairly.  Furthermore, that if a claim is investigated inappropriately or otherwise prepared badly, this risks compromising the arbitrator’s ability to reach a fair and just decision.

Why every child and the mentally incapacitated hit and run victim needs independent legal representation from the outset

It is worth reflecting on what legal capacity actually involves before we explore the dangers faced by those who lack it.  One of the leading authorities on this topic is Masterman-Lister v Brutton & Co [2002] EWCA Civ 1889.  In that case, Kennedy LJ cited with approval a passage from the judgment of Boreham J in White v Fell 1987 unreported, in which he outlined the essential characteristics that enable a person of sound mind and full capacity able to pursue a claim unaided:   

"To have that capacity she requires first the insight and understanding of the fact that she has a problem in respect of which she needs advice . . . Secondly, having identified the problem, it will be necessary for her to seek an appropriate adviser and to instruct him with sufficient clarity to enable him to understand the problem and to advise her appropriately . . . Finally she needs sufficient mental capacity to understand and to make decisions based upon, or otherwise give effect to, such advice as she may receive."

Applying the simplest logic, by way of contradistinction to this definition, a child or mentally incapacitated victim is someone that does not possess these characteristics and so is particularly vulnerable to exploitation in anything other than the most benign of environments.

This same vulnerability also puts the MIB in a correspondingly advantageous position - in a compensatory regime that is already heavily weighted in the MIB’s favour.  This produces a disproportionate inequality of arms between the vulnerable victim and the well resourced and very experienced MIB claims managers that handle these claims.  It also assumes almost impossibly high standards of judicious impartiality and self restraint on the MIB’s behalf.  It should be remembered that the MIB claims managers, will in all probability have cut their teeth in the cut and thrust of contentious litigation on behalf of the insurance sector..

It is precisely to prevent this kind of disadvantage that the Civil Procedure Rules insist on the triple safeguards set out in my earlier post: Fairer Treatment for the Vulnerable.

The Department for Transport admits that it does not supervise or regulate the way the MIB investigates or manages the thousands of untraced driver claims it receives every year.  This is a genuine cause for concern as the MIB, whose board of directors is comprised exclusively of motor insurance grandees, appears to have a glaring conflict of interest: between securing just settlements at full value for the applicants and in suppressing the cost of those same settlements.

No safeguards

At present, there are no suitable safeguards to protect children and mentally handicapped victims of hit and run drivers from receiving unfair treatment at the hands of the Motor Insurers Bureau under the Untraced Drivers Agreement 2003.

We are now more than one year on from when the Minister first conceded the need for reform and he has failed to deliver any reform at all.

Better reform 

The Minister should insist that an independent arbitrator, experienced in handling and quantifying personal injury claims, is appointed to approve every settlement or compromise on behalf of children and the mentally handicapped under the Untraced Driver Scheme. 

The Minister should also insist:

• That these individuals have independent legal advice and representation from the outset of the claim and sufficient funding to ensure that their interests are adequately protected in the more complicated claims.

• That in all but the simplest of cases, the arbitrator (under the proposed settlement approval scheme) should insist on a written opinion from the victim's barrister or solicitor which should consider: (a) the adequacy of the evidence obtained by the MIB; (b) the suitability of the proposed compromise or settlement, as well as (c) any other relevant matters such as the form the proposed award should take (e.g. lump sum / periodical payments order). 

Catch 22

Without these basic additional safeguards, which incidentally are deemed to be an absolute necessity in every civil action involving children and protected parties, how can those who by definition lack the requisite capacity be expected to recognise an unfair compromise or settlement offer for what it is; when to make a challenge or objection to the way the MIB have prepared or investigated the claim or otherwise to spot evidential bias that is such a common feature in the expert evidence procured on behalf of defendant insurers and the MIB alike?. 

Purblind justice

Another weakness in the Ministers’ proposal is that without independent representation that tests and vets the MIB’s evidence, an arbitrator will not know whether the evidence before him is tainted with partiality or whether it is just misleading.  If he only has the MIB’s unchallenged, and possibly misleading perspective to inform him, his findings are likely to be tainted by that bias. 

Worst of both worlds

The present Untraced Drivers Scheme is something of a chimera.  It possesses elements of a continental style inquisitional regime (in the way that the MIB investigates the claim, makes an initial determination on issues of liability / entitlement as well as assessing the value of the award itself) and the common law adversarial way of investigating a claim (in the tactics adopted by the MIB through its selection of sympathetic experts and in its timing of the disclosure of evidence etc). 

The present regime exposes victims to the worst aspects of both worlds.  

In most cases the arbitrator will have little choice other than to adopt the MIB’s appointed expert's slant on the case, unless the victim is lucky enough to afford to be represented and to instruct an independent expert.

A cautionary tale

The reader’s attention is drawn to Moore v Secretary of State for Transport & MIB [2007] EWHC 879 (QB) which demonstrates the folly of entrusting a quasi judicial role to insurance claims operatives who are unlikely to have had any formal legal professional / judicial training.  In this case a genuinely injured victim of a hit and run incident was secretly subjected to video surveillance on a number of occasions.  The MIB then selected some of these videos, but not all of them, and sent them to its chosen medical consultant to ask him to alter his original opinion.  He was persuaded to beef up his original report that had expressed, in mild terms, his impression that the applicant might be exaggerating some of his symptoms.  This was now described as being ‘a significant degree of exaggeration’. 

The MIB later persuaded the consultant to revise the report once more, to remove any reference to the surveillance evidence he had seen; why?.  The final version of this report was then falsified to back date it to give the reader the misleading impression that it predated these events; again, why?.  It is abundantly clear that the independence and objectivity of this particular consultant was compromised.  The report was clearly misleading on important particulars.  A consultant that colludes in the doctoring his report in this way seems just as likely to be susceptible to partiality in the opinions he expresses.  Alternative explanations for the victim’s behaviour under surveillance, such as naturally occurring variations in the severity of his symptoms or perhaps some genuine psychological overlay, may well have provided equally plausible and innocent explanations that supported his full claim.  

The victim complained that he was informed of these matters far too late in the day to respond to them effectively.  The late discovery of these facts prevented him from countering the MIB consultant’s amended views with his own expert evidence.  Clearly the fact that the MIB’s expert now opined that the victim was, in effect, a malingerer had a major impact on his credibility and on the potential value of his claim: reducing its stated value by several hundred thousand pounds.

Not long ago, this type of cloak and dagger tactic was nothing out of the ordinary for the normal cut and thrust of a contested civil claim but in recent years the courts have imposed rigorous sanctions on those who attempt ambuscades of this kind.  Unfortunately, neither the Civil Procedure Rules nor the court’s writ extend to the Untraced Drivers Scheme.  Behaviour that might be tolerable where both parties are legally represented and where the court has benefit of hearing both sides of the case, is completely unacceptable when perpetrated by a quasi judicial / inquisitional body.

I am reasonably confident that the MIB’s machinations in this case were inadvertent and not part of a deliberate ploy to  cheat the applicant of his full compensatory entitlement.  Anyway, there is no way of telling whether its deception, and that may be too strong a word for it, would have made a material difference to the amount of the final award.  However what is clear is that the MIB, unlike ordinary liability insurers who are governed by the Civil Procedure Rules, enjoys a very wide latitude in the way it operates: how it goes about its investigations, whom it selects as experts, how it instructs those experts and in the timing of its disclosure; all effectively unregulated.  Can this be right?

The absence of any day to day supervision or accountability in the way the MIB investigate and value their claims is something that victims and their representatives need to be on their guard against.  

Greater protection accountability and supervision 

Common sense suggests that these particularly vulnerable victims need to be protected not just from themselves or the incompetence of their lawyers but also from the MIB itself.  The safeguards deemed necessary under the Civil Procedure Rules are even more necessary under the Untraced Drivers Scheme. 

The MIB should be recognised for what it is: an inadequately supervised private company set up and managed by the insurance industry and appointed by the Minister to act as an unregulated outsourced inquisitional agent, assessor, with an inherent conflicting interest as the notional compensating insurer. 

I wonder whether anyone at the DfT has heard about the division of powers principle?

APIL ADVANCED RTA TRAINING

New APIL Advanced Road Traffic Accident Claims Update

I am presenting a full day training session for the Association of Personal Injury Lawyers.  The course is set at the intermediate to advanced level.  It is suitable for experienced solicitors legal executives and barristers who specialise in road traffic injury claims.

Please apply to APIL direct for further details and to make a booking.

NEW RTA AND MOTOR CLAIMS TRAINING

RTA and motor claims update training 2014

Not to be missed, if you want to stay ahead of the crowd

I am running an entirely new series of half day and full day legal training and in-house workshops (that can be adapted to suit all levels of experience: beginners, intermediate and advanced) on road traffic accident claims. 

Major reform is on the cards 

The reforms will impact on Part VI of the Road Traffic Act 1988 extensively, the European Rights Against Insurers Regulations 2002 and involve the complete rewriting of both the Uninsured Drivers Agreement 1999 and the Untraced Drivers Agreement 2003.  Many leading case authorities are based on the present flawed regime and so are unsafe to rely on.  

You need to know about this if you don't want to get caught out.  The training will demonstrate why all your text books and many of the case authorities you rely on are simply out of date!

The training will explain how to spot important issues that could make a real difference to your clients' compensatory entitlement.  I cover all the basic liability scenarios, contributory negligence, cycle helmets, pedestrian, Highways Act cases etc.

The key point to take on board about these changes is that they are necessary because our national law provision in this area fails to fully implement Community law in many instances.  These defects have a direct bearing on your clients’ legal entitlements, right now.  Fortunately the defects can be remedied, in advance of the reforms, if you know what you are doing. 

The technical issues will be reinforced and made practical in workshop sessions.

There are also some fascinating developments to our common law to share.  

I will also cover accidents abroad: pursuing a claim against a foreign EU driver, here and abroad has never been easier! 

My in-house training can be tailored to suit the specific requirements of the firm.

APIL and MBL are organising my public training sessions.

Bookings

To apply for details, email Nicholas Bevan at mail@nicholasbevan.com

Alternatively contact me by phone:

Office:  01823 325365

Mobile: 07968 427134

For more information about me, visit:   nicholasbevan.com

Feedback

Asbestos Fundamentals 2013

• The best APIL course I have ever attended. Thank you very much

APIL’s MIB Training

• Nick is a brilliant and enthusiastic speaker  
• Nick made a rather dry and technical subject understandable and, dare I say it, fun 
• The course notes are superb

The Civil Justice Reforms

• Excellent speaker.  The most comprehensive overview of these extensive reforms that I have heard or read.

A TALE OF TWO CASES

‘...it was the age of wisdom, it was the age of foolishness...’ 

                                                                            Charles Dickens, A Tale of Two Cities

Nemeti and others v Sabre Insurance Co. Ltd [2013] EWCA Civ 1555 and Vann and others v Ocidental-Companhia De Seguros SA [2014] EWHC 545 (QB)

The direct right of action

The Nemeti and Vann cases both featured claims initiated on behalf of road accident victims who were English residents but where the accidents happened abroad in a foreign European Union country (Romania and Portugal respectively).  In both cases the legal representatives sought to exercise the direct right of action conferred under article 18 of the Sixth Motor Insurance Directive and articles 9 and 11 of Brussels I so they could issue the claims in this country. 

In Nemeti, rather than referring to the correct Community and local applicable law provisions, the claimants’ solicitors relied exclusively on the UK’s implementation of this Community law: citing the European Community Rights Against Insurance Regulations 2002.

Unfortunately they were looking in the wrong place.

As my earlier blog indicates, the Nemeti claim was effectively non suited as Regulation 3  confines the victim’s entitlement under the direct right to the contractual cover conferred by the driver’s motor insurance policy (in my opinion wrongly so).  Furthermore, the definition of accident in regulation 2 restricts the direct right to accidents in the UK.  Their driver was not authorised to drive by either the vehicle owner or the insurer and, of course, the accident did not take place in the UK.  The claim in Nemeti was dismissed as a result.  An attempt to substitute the claim with an entirely new one, after the limitation period had expired, failed.

Compare that unfortunate outcome with the Vann case, in which the claimant representatives correctly founded the cause of action on the Community and local applicable law provisions that confer the direct right, in accordance with the decision in FBTO Schadeverzekeringen NV -v- Jack Odenbreit, CJEU 2007 Case 0463/06.  The result was that in Vann the issue that proved to so fatal in the Nemeti case did not even rear its head as a contentious issue.  The Vann decision is useful as it demonstrates the correct approach to applying  foreign applicable law (under Rome II) in an English court concerning the assessment of liability and contributory negligence.  See my commentary on Wall v Mutuelle for the correct approach to quantifying damages conferred under foreign applicable law in an English court.

One of the reasons Nemeti failed was that the solicitor seemed to think our UK domestic provision provided a complete solution; it wasn't even relevant. 

The importance of European Law

Far too many road traffic accident PI specialists still labour under the mistaken impression that this area of practice remains relatively unaffected by the rising tide of European Community law; nothing could be further from the truth. Community law provides the primary source of law governing the requirement for compulsory third party motor insurance and the additional guarantees provided by the compensatory body - this applies equally - whether the accident occurs on the French Riviera or outside your local takeaway.

Unfortunately the widespread misconception that our domestic provision is complete and fit for purpose is one that appears to be shared by the Department for Transport.  It continues to ignore warnings that its statutory and extra-statutory provision to guarantee the compensatory entitlement of victims fails to meet the minimum standards imposed under the Sixth Motor Insurance Directive (2009/103/EU).  On this point, it is perhaps worth noting that the UK’s transposition of this particular directive is currently under investigation by the European Commission.  

I have argued in the New Law Journal and elsewhere that Part VI of the Road Traffic Act 1988, The European Community Rights Against Insurers Regulations 2002 and both MIB Agreements (2003 and 1999) as well as certain Court of Appeal rulings on their interpretation are defective in this respect; more about this anon.

When a solicitor takes on a case that involves a client who is injured abroad in a foreign European Union country, the basic competence needed just to issue the claim requires a working knowledge of the relevant Community law.  This includes but is by no means limited to an appreciation of the following: (i) Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (aka Brussels I) which determines which country’s court has jurisdiction to deal with the claim; (ii) Council Regulation (EC) No 864/2007 of 11 July 2007 on the law applicable to non-contractual obligations (aka Rome II) which governs which country’s law applies to the substantive and procedural aspects of the claim for accidents on or after 11 January 2009, (iii) the Sixth Directive (2009/103/EC), (iv) the various rulings by Court of Justice of the European Union and our own courts interpreting this Community law, as well as (v) the correct approach to interpreting our national law provision in the light of relevant superior Community law. 

Lord Justice Aikens gives a helpful summary of the correct approach for interpreting our law in the light of EU Directives at para 46 and following of his judgment in Churchill v Wilkinson and Evans v Equity Claims [2012] EWCA Civ 1166.  The judgment confirms that ordinary English meaning of the words used in s151 (8) of the Road Traffic Act 1988 fails to fully implement Community law.  This begs the question: where else is our national law provision for accident victims deficient?  The answer seems to be ‘in quite a lot of places’ as my earlier blogs and my four part series of articles in the New Law Journal explain.

The contrasting first instance decisions in the Wilkinson / Evans appeal provide another useful illustration of the right and wrong approach to interpreting and applying our national law.  As with Nemeti and Vann, both claims featured similar facts on the salient issues to which identical Community and national law applied; it was in the application of that law that the different outcomes resulted.

The New Law Journal will publish my PI update on accidents abroad shortly.

HUMAN RIGHTS DON'T UNDERMINE COMBAT IMMUNITY

It was depressing to hear conservative MP James Arbuthnot on The Today Program this morning misreprenting the Supreme Court ruling in  Smith & Ors v Ministry of Defence [2013] UKSC 41 last year as a challenge to the principle of combat immunity.  He insinuated that claims like these undermined the ability of our armed forces to put men on the ground in dangerous combat situations and risked causing unnecessary civilian loss by the substitution of aerial bombing.  This is misleading if not disingenuous.

The principle of combat immunity is long established, well acknowledged and in robust usage.  Last year’s Supreme Court hearing did not undermine the principle of combat immunity; quite the opposite.  The case featured an unsuccessful attempt by the Ministry of Defence to extend the scope of combat immunity beyond its well recognized boundaries, in order to prevent the Ministry’s planning and procurement decisions from falling under scrutiny.  The claim featured allegations that service personnel had been unnecessarily exposed to risk and killed or injured due systemic or operational failures on the part of the Ministry of Defence in Whitehall, not in the heat of battle, for failing to provide them with the basic and readily available equipment that was necessary to protect life and limb.  

See my earlier blog: MoD LOSES THE ABILITY TO HIDE ITS NEGLECT.

Whilst it is true that the Human Rights Act was also considered in Smith, the following excerpts from Lord Hope’s judgment indicates the policy limitations that apply to these convention rights:

‘The Strasbourg court has repeatedly emphasised that, when it comes to an assessment of the positive obligations that are to be inferred from the application in any given case of the Convention rights, a fair balance must be struck between the competing interests of the individual and of the community as a whole. It has also recognised that there will usually be a wide margin of appreciation if the state is required to strike a balance between private and public interests and Convention rights.’

Defence Secretary Philip Hammond is reported by the BBC as saying: ‘It cannot be right that troops on operations have to put the European Convention on Human Rights ahead of what is operationally vital to protect our national security.’  Well, obviously not.  However, instead of resorting to knee jerk condemnations of the Human Rights Convention, the minister would do better if he concentrated instead on curbing the profligate misspending and staggering procurement blunders perpetrated by his ministry in Whitehall.  Is it really too much to expect, in the absence of a national emergency of the kind experienced in the Second World War, that members of our armed forces should be provided with basic and readily obtainable protective equipment?  This is what the ongoing Smith case is really about.