AJAG briefing: The end of the safety net? The case for After the Event Insurance

Transcription

1 AJAG briefing: The end of the safety net? The case for After the Event Insurance The following case examples illustrate the importance of after the event insurance (ATE), set to be destroyed by clause 45 of the LASPO Bill. Throughout the passage of LASPO so far, the Government have implied that only dead cert cases are taken up due to cherry picking ; and that cases hardly ever fail. This brief shows otherwise. In each of these cases, the prospects of success were considered reasonably good when they began- but nothing is certain in litigation, and they all failed. Some were withdrawn because the evidence changed, often because an expert revised his opinion. Others were lost at trial. None failed because of fault on the claimant s part. But the common factor is that without no win, no fee and after the event insurance, these various claimants, although advised they had a case worth pursuing, would have been denied access to justice. This is because of the costs risks they would have faced. In these cases, those risks came to pass, but were met by the ATE insurer indemnifying the claimant against those costs. And, of course, it is not just these unsuccessful cases that would be affected by the Government s plans. Other claimants cases would have had a similar assessment of their chances, and would have succeeded- but would never have had the opportunity to have their day in court, because the same costs risks would have represented the same overwhelming deterrent, without the safety net provided by ATE insurance. These case examples illustrate why ATE is essential. In each case, the ATE policy gave the claimants- ordinary people with ordinary personal assets and liabilities- the security they needed to bring their cases. In each example, we explain the legal costs each claimant would have had to pay under the Government s proposals, without ATE to protect them. In each case, the ATE insurer met the claimant s disbursements bill: the Government have no plans for these to be met by anyone other than the claimant under their changes. The ATE policy also covered the winning defence costs, for which the claimant was liable: whether he remains so under the Government s plans will depend on the still undefined model they plan for Qualified One Way Costs Shifting. Andrew Dismore, AJAG co-ordinator

2 Case 1: Industrial Disease (Silicosis) Claim Details: The deceased, Mr H, was employed in a local quarry. He worked in the vibrating and blast sheds, where he was exposed to high levels of silica. As a result of this exposure the deceased developed silicosis and lung cancer. He died due to his illness and a claim was brought by his widow. Initial prospects were placed at 65-75%, with potential damages assessed at over 100,000. The ATE insurer agreed to provide cover. Initial medical evidence was obtained which was supportive. A subsequent admission of liability was then made, subject to medical causation. Despite the initial optimistic prospects for the case and liability being admitted, further medical evidence could not prove the necessary causal link. Based on the expert medical advice, the case had to be abandoned. The ATE insurer settled the claimant s disbursements of 2, Under the Government s QOCS proposals, the claimant widow would have be responsible for these disbursements, as QOCS makes no provision for the payment of claimants disbursements in failed cases; and the ATE system will not survive to cover such claims, as a consequence of the LASPO Bill. Case 2 : Employers Liability: Manual Handling Regulations 1992 The claim related to the pursuit of a repetitive strain injury claim, by Ms S against the claimant s former employer, Bolton Metropolitan Council. At the time of the application for ATE cover, proceedings had already been issued. Counsel s opinion stated that the prospects of success were 70%. The claim was accepted by the ATE insurer. Updated (different) Counsel s advice assessed the prospects at between 60 65%.

3 The case was unsuccessful at trial, as the judge, while accepting the genuine medical condition, did not find it was attributable to the claimant s work. pay the defendants costs Both the defendant s costs of 25,000 and the claimant s disbursements of were paid under the ATE policy. system, still at large), which the defendants would have had to pay, even though they won. As the defendant was the local authority, this would have been paid from the public purse. However, the claimant would still have been liable for her own disbursements, which would have been prohibitive without the ATE cover, which would cease to be available as a consequence of the LASPO Bill. Case 3: industrial disease asbestos claim, multi defendant case This was an industrial disease claim relating to asbestos exposure. The claimant, Mr M, was an insulating engineer who had handled asbestos on a daily basis during his employment. There were no fewer than four defendants. At the time of the application for ATE cover, the claimant s solicitors estimated the prospects of success as between 65 75%, based on a supportive medical opinion. As a result, ATE cover commenced. Later, following the preparation of a joint medical report, the claimant s radiologist expert reversed his opinion and the claim had to be discontinued. The ATE insurer had to meet defendants costs totalling 23,100 and the claimant s own disbursements of system, as it is far from clear in multi-defendant cases what the position will

4 be.) If QOCS covers these costs, the defendants would have to pay for their own side, even though they won; but the claimant would still have been liable for his own disbursements, which would have been prohibitive without the ATE cover, and which would cease to be available under LASPO Bill. Case 4: clinical negligence: wrongly interpreted tests Mrs H, the claimant, was on a long term prescription of the contraceptive drug, Depo-Provera. An oestradiol level test was wrongly interpreted by her GP. This led to the claimant having weakened bone density for a sustained period of time. She suffered a pathological fracture of the right hip, due to her bones being much more fragile. Counsel s opinion gave the prospects of success in the region of 65% based on the evidence which included a positive medical report. Litigation had been commenced. ATE cover was provided. Later, following a joint meeting between the parties experts, the claimant s expert changed his opinion and the claim had to be recently discontinued. The ATE insurer will meet the defendant s costs to be assessed, claimed at 49, and the claimant s own disbursements of 12, system, still at large), which the defendant would have to pay, even though he won, but she would still have been liable for her own disbursements, which would have been prohibitive without the ATE cover, which would cease to be available as a consequence of the LASPO Bill. LASPO theoretically provides for ATE to continue for expert investigation reports in clinical negligence claims only (though such policies will not be economically viable) but not for other and post litigation disbursements, such as those incurred in this case, which the claimant would still have to meet.

5 Case 5: non personal injury: inheritance dispute This claim was made against the estate of Mr H deceased, under the Inheritance (Provision for Family and Dependants) Act 1975 by his widow, Mrs H (the first claimant) who was separated from the deceased, but not divorced. Counsel s opinion stated that the claim was strong and the prospects of success were assessed at 85%. ATE cover began and proceedings were commenced. The trial date was listed and 6 months before trial a Part 36 settlement offer was made 2010 of 20,000, conditional on the second claimant withdrawing her claim. This offer could not be accepted as it was not valid, because the first claimant could not prejudice the second claimant s claim. Counsel now placed prospects of success in the region of 60% and ATE cover continued. Outcome The case was unsuccessful at trial and the claimant was ordered to pay the Defendants costs. The ATE insurer will meet the costs after assessment, currently claimed at 62, QOCS will apply only to personal injury claims and will not apply to other types of civil litigation such as this. Without ATE, which will not continue as a consequence of LASPO, the claimant widow would have be liable for all these costs. Case 6: industrial disease asbestos claim, Throughout his working life, the deceased Mr C was employed as a marine engineer. Whilst working on ships engines, boilers, pumps, and other machinery he came into contact with asbestos. In later life, the insured developed asbestosis and died. The prospects were assessed at 51 65%. Proceedings were commenced and ATE cover obtained.

6 Later updated experts reports did not ultimately support the claim. The ATE insurer met the defendants costs of 21,750 and disbursements of 4,955. system, still at large), which the defendants would have to pay, even though they won, but he would still have been liable for his own disbursements, which would have been prohibitive without ATE cover, which would cease to be available as a consequence of the LASPO Bill. Case 7 : road accident, rear end collision The first defendant collided with the second defendant, who in turn collided with the rear of the claimant Mr A s vehicle, whilst he was driving on the M11 towards London. The prospects of success were estimated at 51 65% and ATE provided. The claim was lost at trial. The ATE insurer met the two defendants costs of 17,418 and the claimant s disbursements of 2, it is sometimes wrongly said that rear end collisions always succeed. This one did not. Although under QOCS, the Government might say the defendants would have had to bear their own costs, this might not be so. As the trial judge preferred the defendants evidence to the claimant s, this is just the sort of case that would raise the question of whether QOCS protection should be retrospectively disapplied, depending on whether the trial judge would have found the proceedings had been unreasonably commenced. This uncertainty is one of the major disadvantages of QOCS. If QOCS were to be disapplied, then the claimant would have been liable for the defence costs of over 17,000. In any event, he would have been liable for his own disbursements of over 2,000, in the absence of ATE cover.

7 Case 8: road accident, rear end collision The claimant, Mr S, was involved in a road accident. The defendant had not maintained a safe braking distance and collided with the rear of the claimant s vehicle. Prospects of success were estimated at 85% and ATE insurance provided. The claim was lost at trial, as the judge preferred the evidence of the defendant. The ATE insurer met the defendant s costs of 10,349 and the claimant s disbursements of 1,796. Again, a rear end collision that did not succeed. Although under QOCS, the Government might say the defendants would have had to bear their own costs, this might not be so. As the trial judge preferred the defendants evidence to the claimant s, this is another case that would raise the question of whether QOCS protection should be retrospectively disapplied, depending on whether the trial judge would have found that proceedings had been unreasonably commenced. This uncertainty is one of the major disadvantages of QOCS. If QOCS were to be disapplied, then the claimant would have been liable for the defence costs of over 10,000. In any event, he would have been liable for his own disbursements of almost 2,000, in the absence of ATE cover Case 9: product liability The claimant Mr C s own vehicle was parked on an incline with the handbrake applied. The handbrake failed and the vehicle began to roll backwards. The claimant was behind the vehicle putting his 2 year old daughter into a pram. The claimant attempted to stop the roll of the vehicle by pushing against it, injuring his back. The vehicle crushed both the pram and the car behind. Expert engineering evidence was obtained which confirmed that the handbrake had failed. Prospects of success were assessed at 65-75% against Toyota, the car manufacturer. Counsel confirmed that the claim had reasonable prospects of success.

8 At trial, the court preferred the evidence of the defendant and the claim was dismissed. The ATE insurer met the defendant's costs of 20,000 an the claimant s own disbursements of system, still at large), which the defendants would have to pay, even though they won, but the claimant would still have been liable for his own disbursements, which would have been prohibitive without the ATE cover, which would cease to be available as a consequence of the LASPO Bill. Case 10: highway claim against local authority Mr L, the claimant, was a police officer who was on duty with a colleague, riding police mountain bikes. He was proceeding to an incident when the front wheel of his bike hit a hole on the road. The handlebars twisted from his grip, throwing him off the bike. He landed impaled onto the handlebars. The prospects of success against the local council were assessed at 65-75%. ATE was provided. The claim was dismissed although the judge commended Mr. L and found him extremely honest. The ATE insurer met the defendant's costs of and the claimant s own disbursements of 2,142. system, still at large) which the defendants would have to pay, even though they won, falling to be met by the council tax payer. This is one of the reasons why local authorities have made clear they wish to maintain the present system and not go down the QOCS route. Even so, the claimant would still have been liable for his own disbursements, which would have been prohibitive without the ATE cover, which would cease to be available as a consequence of the LASPO Bill.

9 Case 11: Fatal accident claim (fatality abroad) The claimant s, Ms T s, fiancé drowned whilst on a white water rafting event in Prague. Ms T s claim was brought against three defendants: the travel broker; the tour operator; and the rafting company. Counsel assessed prospects of success against the broker and the rafting company to be 60%. Although it was unlikely that the tour operator would be found liable, counsel advised it was justifiable to include them in the proceedings at that stage. Counsel s further opinion confirmed that, following the receipt of expert evidence, the claim had been strengthened. There were concerns the first defendant might be uninsured, but counsel confirmed that the merits and the chances of recovery were sufficient to proceed. ATE cover commenced. Later, after extensive investigations and further financial checks on all the companies involved, the prospects of success were now found to be insufficient and the claim had to be discontinued. The second and third defendants agreed to bear their own costs. The ATE insurer met the first defendants costs, agreed at 3,500, and the claimant s own disbursements, mainly experts and agents fees, of 22, Under LASPO, the defendants would have met their own costs under QOCS system, still at large), as the second and third defendants agreed to do here, but the claimant fiancée would have been liable for her own disbursements of more than 22,000, as the QOCS alternative will not cover these. The claim would have been prohibitive. Case 12: Road accident: maximum severity injury Mr J suffered extreme brain injury when riding a motorcycle which hit by a car. The defendant, whose vision was obscured by parked cars. Emerged from a side road. There was likely to be some contributory negligence as Mr J was going too fast, but the value of the claim on full liability was about 3m.

10 There were no offers on liability and the defendant was not open to discussion. The case failed at trial. The ATE insurer paid out over 21,000 to meet the claimant s disbursements. Under LASPO, whilst Mr J might not have been liable for the defendant s costs (subject to the qualified aspect of QOCS and here covered by an inadequate BTE policy) he would have been faced with a large bill of 21,000 for his own disbursements. CASE 13: personal injury on the highway The claimant, Mrs W, tripped over a utility access manhole cover and claimed against BT to whom it belonged. BT then sought an indemnity from the local authority, (as they relied on their inspection regime), who were then added as a second defendant. The case failed at trial. The defence costs of 39,085 and the claimant s disbursements of were met by the ATE insurer. Under QOCS, (depending on what qualifications are introduced for the proposed QOCS system, still at large), the defendants would bear their own costs; in this case the second defendants would be met from the public purse, as these defendants were the local authority. The claimant would have been responsible for her own disbursements, which in this case would have been impossible for her to meet without ATE. Case 14 personal injury tripping claim The claimant, Mrs T, tripped in a car park pothole and lost consciousness, there was no witnesses other than her young children. When the paramedics arrived Mrs T was

11 still unconscious with her feet in the pothole. The paramedics took her to hospital and the ambulance note referred to the claimant having fainted, which erroneous record continued throughout the care notes. This was a. multi-track case worth in excess of 50,000. At trial the judge found that the claimant had not proved her case and found in favour of the defendant local authority. The ATE insurer paid defence costs of 50,000 and the claimant s disbursements. Under QOCS, (depending on what qualifications are introduced for the proposed QOCS system, still at large), the defendants would bear their own costs; in this case met from the public purse, as the defendants were the local authority. The claimant would have been responsible for her own disbursements, which in this case would have been impossible for her to meet without ATE. Case 15: Personal Injury Claim The claimant G was an inmate at HMP Forest Bank. he suffered a serious injury whilst being confined in a holding cell. Counsel s opinion stated the claim had reasonable prospects of success and ATE cover was provided. proceedings were issued. Liability was denied throughout and the ATE policy was extended to trial. The case failed at trial. The ATE insurer made an immediate interim payment of 35,000 towards the defendants costs, which are expected to amount to 70,000 after assessment; and the ATE insurer met the claimant s disbursements of 13,645. Under QOCS, the defendants would bear their own costs, in this case met from the public purse, as the defendants were the Ministry of Justice. The claimant would have been responsible for his own disbursements, which in this case would have been impossible for him to meet, given his circumstances.