MOTORING NEWS Summer 2008 Welcome... Welcome to the Summer 2008 Dolmans Motoring News update. In this edition we focus on:- C A S E R E V I E W S A R T I C L E S L e s l e y C a r r v E a s t S u s s e x F i r e & R e s c u e A u t h o r i t y ( 2 0 0 8 ) B e n B y r n e v M o t o r I n s u r e r s B u r e a u ( 1 ) S e c r e t a r y o f S t a t e f o r T r a n s p o r t ( 2 ) ( 2 0 0 8 ) K i l b y v G a w i t h ( 2 0 0 8 ) G a l l i f o r d T r y C o n s t r u c t i o n L t d v M a c D o n a l d s L t d ( 2 0 0 8 ) L a m o n t v B u r t o n ( 2 0 0 8 ) R o b e r t C o r n e s ( b y h i s L i t i g a t i o n F r i e n d J u l i e B a i r d ) v. D a v i d S o u t h w o o d ( 2 0 0 8 ) S l a v a J o s e p h i n e D a v i e s v. C r a i g B r a d s h a w ( 1 ) M i c h a e l B r a d s h a w ( 2 ) ( T A H a n s o n s F r a n c h i s e e ) ( 2 0 0 8 ) P r o v i n g S p o t H i r e R a t e s o n t h e S m a l l C l a i m T r a c k A B I A g r e e H i g h e r C r e d i t H i r e R a t e s C h a n g e s f o r L e a r n e r D r i v e r s L e s l e y C a r r v E a s t S u s s e x F i r e & R e s c u e A u t h o r i t y ( 2 0 0 8 ) The Claimant motorcyclist appealed against the decision of the Judge, who dismissed his claim for personal injury arising out of a road traffic accident between him and a fire engine, belonging to East Sussex Fire and Rescue Authority. The Claimant and the Defendant had been travelling towards the same cross road junction from different directions. The traffic lights at the junction operated in such a way that after the lights had been green for one of the 4 adjoining roads, there was a period of 4 seconds in which all of the other traffic lights remained red so as to allow the junction to clear of traffic. This was referred to as the safety margin. It was held on Appeal that due to the safety margin it was not possible for the Defendant s lights to have already been green and the Claimant s lights to have been turning red as he passed through. The Appeal was allowed on the basis that the trial judge had made a material error of law and the case was subsequently submitted for a re-trial. At trial, the timings of the safety margins, the timings of the colour change from red to green, and the distances between the point of impact and point of acceleration were all agreed between the parties. In contention was the fact that both parties claimed that the light had been green in their favour. The trial judge found that the lights had been green in the Defendant s favour and that the Claimant had passed through the lights when they were turning red. 1
B e n B y r n e v M o t o r I n s u r e r s B u r e a u ( 1 ) S e c r e t a r y o f S t a t e f o r T r a n s p o r t ( 2 ) ( 2 0 0 8 ) This claim came before the Court of Appeal on 22 May 2008 on a preliminary issue relating to the 1972 Untraced Drivers Agreement. The Claimant (a minor) had been injured in a hit and run accident but it was not until 8 years later that his parents made a claim against the MIB. The Untraced Drivers Agreement requires any claim to be brought within 3 years. The Claimant brought his claim 13 years after the accident when he was 16 years of age and as such outside the time limit as set by the Untraced Drivers Agreement. The Claim was refused by the MIB. However an issue arose because the European Court of Justice had previously ruled that the protection provided by the national scheme had to be equivalent and as effective as the protection available under the national legal system to victims of insured drivers. The Court of Appeal held that there is no reason to adopt a more restrictive meaning in respect of the Untraced Drivers Agreement. Readers will recall that any claim in tort against an insured driver can be brought at any time prior to the Claimant s 21 st Birthday by virtue of Section 28 of the Limitation Act 1980. The same would apply to an identified but uninsured driver under the Uninsured Drivers Agreement. The Court of Appeal took the view that whilst the Untraced Drivers Agreement had many procedural advantages the same had to be looked at as a whole within the context of both Agreements and found that the advantages of the scheme did not justify a shorter time limit. It therefore found that in order to meet the intended objective of implementing Directive 84/5 the Untraced Drivers Agreement should be subject to a limitation period no less favourable than that which applied to the commencement of court proceedings by a minor under Section 28 of the Limitation Act 1980. 2
K i l b y v G a w i t h ( 2 0 0 8 ) This case is another example of the many issues that have arisen out of the fixed fee regime under CPR 45 as to precisely what a Claimant is entitled to by way of costs under that regime. In the instant case the Claimant had the benefit of before the event insurance (BTE) and entered into a CFA with her solicitor despite the fact that liability had been admitted. Quantum was agreed and the Defendant agreed to pay the costs but disputed that the fixed success fee of 12.5% under CPR 45.11(2) was payable. The Defendant s argument was principally that the Court had a discretion as to whether or not to allow a success fee and at what level due primarily to the fact that the wording of CPR 45.11(1) provides that a Claimant may recover a success fee. Due to the large number of motor claims this argument had significant importance and proceeded to the Court of Appeal on the 05.06.08. The Court of Appeal held that the natural.meaning of the wording was that the Claimant was entitled to a success fee under CPR45.11(1) and that the wording.of CPR 45.11(2) which provides that the.success fee shall be 12.5% meant that the success fee had to be 12.5% and.there was no discretion. 3
G a l l i f o r d T r y C o n s t r u c t i o n L t d v M a c D o n a l d s L t d ( 2 0 0 8 ) In this matter there was a dispute between the parties arising out of a design build contract for a major building project. It was alleged that the Defendant was in breach of their common law duty of care in not giving proper advice regarding supporting structures for the façade of the building. There had been a number of meetings and discussions between the parties and a dispute arose as to whether or not the same were without prejudice when a director of the Claimant company made a witness statement in the substantive proceedings containing evidence of those discussions. This was of significant importance because the director was seeking to rely on what happened at the meeting and thereafter the same would give rise to important admissions. It was held that admission of the kind which the director sought to rely on could only have arisen out of detailed negotiations between the parties. This Judgment is being interpreted by some as a further indication by the judiciary that parties should be encouraged to enter into negotiations to resolve disputes without fear that material may subsequently be used against them if proceedings do ensue. It is, however, clear that the CPR has not altered the fundamental rules of dealing with the admissibility or otherwise of without prejudice material especially where disclosure had been an obvious mistake and it would be wrong and unfair to find that the privilege had been lost. The various letters that had passed between the parties were not marked without prejudice, however that was held to be irrelevant as it seemed plain looking at the documents that the meeting was a without prejudice meeting and had been treated as such. Further, the fact that disclosure of those documents and notes of the meeting in lists of documents did not amount to a waiver of privilege as the CPR procedure for disclosure did not mean that inclusion of a document in a list rendered it admissible in evidence. L a m o n t v. B u r t o n ( 2 0 0 8 ) An anomaly between the fixed fee regime and Part 36 offers/payments manifested itself in the case of Lamont v. Burton (2007) and has serious implications for any fixed fee claim including road traffic and employers liability cases. Mr Lamont was injured in a road traffic accident and instructed solicitors under a CFA who in turn took out ATE insurance. Liability was admitted early on however the matter proceeded on quantum issues. The Defendant made an offer of settlement that was not accepted by Mr Lamont and which was subsequently not beaten by him at Trial. The usual costs sanctions were applied with the Claimant only recovering those costs up until the date of the payment in (or 21 days thereafter). The issue arose as to what level of success fee should be applied to the costs recovered by Mr Lamont. Mr Lamont argued that he was entitled to a 100% success fee because pursuant to CPR Part 45.15(6) the case was concluded at Trial. This Judgment is being interpreted by some as a further indication by the judiciary that parties should be encouraged 4
Unsurprisingly, the Defence argued that the Claimant should be limited to the fixed success fee of 12.5% on the basis that Mr Lamont should only be able to recover the costs he would have been entitled to had he accepted the Part 36 offer or payment. Whilst Mr Lamont s argument clearly had technical merit, the Defence argument was equally logical if an injustice was to be avoided. The Court of Appeal held that while there may well be a case for deciding that where a Claimant fails to better a Part 36 offer or payment he should be allowed only the same success fee as he would have recovered had he accepted it, that was not the effect of the CPR. Rule 45 which gives entitlement to the 100% success fee could not be circumvented by utilising the Court s discretion under Rule 44. You will appreciate that circumstances will therefore exist where a Claimant can recover more in costs by refusing a reasonable offer and proceeding to Trial, and losing, than if he were to accept the reasonable offer at the time that it was made. The converse is equally true for Defendants making offers. The net result of this decision is that careful consideration needs to be given as to whether or not to run cases to Trial solely in relation to quantum bearing in mind the Claimant will recover a 100% success fee. Circumstances will arise where it will be prudent to pay a little more solely with a view to curtailing the success fee to 12.5% in road traffic cases. Ultimately, it will be a matter for the Rules Committee and the Civil Justice Council to consider whether to amend Part 45 to make special provision to deal with this issue and therefore avoid the injustice of the situation. However, for now, should a fixed fee matter look like its going to proceed to Trial on quantum only the overall economics in terms of claims spend should be taken into account. 5
R o b e r t C o r n e s ( b y h i s L i t i g a t i o n F r i e n d J u l i e B a i r d ) V. D a v i d S o u t h w o o d ( 2 0 0 8 ) The Defendant drove his car into a bus shelter causing it to collapse onto the Claimant, who consequently suffered a severe injury, which caused permanent intellectual impairment. The Claimant was able to live on his own, but required the assistance of support workers and the benefit of a Case Manager. Liability was admitted and Judgment entered in the Claimant s favour with damages to be assessed. All aspects of quantum were agreed between the parties, save for the cost of future care and/or case management. The Court had to decide upon the following: 1. The appropriate level of support to assume, in order to be able to assess the future cost of care. 2. Contingencies for holidays and sickness, and for cover in case the Claimant encountered a crisis and therefore required additional support. 3. Whether an agency, or people directly employed on behalf of the Claimant, should and would provide the requisite support. Namely, 48 weeks of the year should be calculated using the normal rate and 4 weeks should be calculated using an enhanced rate to take into account holidays and sickness. As regards the possibility of a crisis occurring, the Court did not think it appropriate to make a provision in this respect as there was no reason to suppose that such a crisis, for which the Claimant would require additional support, would occur each year. It was decided that the Claimant would benefit from assistance from appropriate staffing agencies rather than directly employed support workers, and decided that 30 per week should be allowed for support workers expenses until the end of 2009, reducing to 22.50 per week thereafter. The Claimant had failed to prove the cost claimed for support workers to accompany him on holiday. It was also held that it would not be appropriate to alter the multiplier agreed between the parties as it had been fixed taking into account all relevant material factors. 4. Whether the agreed life time multiplier of 24.67, to be utilised in the calculation of the future cost of care claim, should be reduced to take into account contingencies other than mortality and accelerated receipt. 5. What should be allocated for the expenses of support workers going on holiday with the Claimant and/or engaging in activities with him. It was held that provision could be made for the Claimant to receive 33 hours of support per normal week up until the end of 2009 and 18 hours a week thereafter. The state of the evidence in relation to holidays for the Claimant was deemed to be unsatisfactory, and there was also said to be no evidence that the Claimant had been ill or received or required additional support. Consequently, the Court held that the issue of provision for holidays and sickness should simply be included in the evaluation of the future care costs. 6
S l a v a J o s e f i n e D a v i e s v. C r a i g B r a d s h a w ( 1 0 M i c h a e l B r a d s h a w ( 2 ) ( T A H a n s o n s F r a n c h i s e ) ( 2 0 0 8 ) As in the case of Robert Cornes above, the only issues to be determined by the Court were in respect of future care and case management. All other heads of damage had been agreed. The Claimant suffered incomplete tetraplegia, when the First Defendant, an employee of the Second Defendant, drove into the back of her vehicle as she was stopped at a junction, pushing the same across the road and into a dry stone wall. A resident carer had been employed by the Claimant to assist her with her day to day activities. The Claimant also claimed provisional damages in respect of her increased risk of developing syringomyelia. The issues before the Court were as follows: 1. What award should be made for future care? 2. What award should be made for future case management? 3. What the Claimant s life expectancy and consequential multiplier should be? 4. Whether, and if so to what extent, payments of future care should be made by way of periodical payments whether in whole or in part. 5. Whether there should be an award of provisional damages in respect of the risks of syringomyelia It was held that, whilst the provision for a live in carer was not a reasonable provision as at the date of Trial, such care should be provided once the Claimant reached 70 years of age and, from the age of 75 it would be reasonable to provide for double up care and night time care. From the date of Trial until the Claimant reached the age of 70, it was held that the provision of 42 hours per week of care, at a rate of 10.00 per hour was reasonable. The Court concluded that it would also be reasonable to make provision for 2 hours of case management per month with 9 months being at an enhanced level of 4 hours per month, at the rate of 80.00 per hour. The Court accepted that the Claimant would lose 3.9 years from her normal life expectancy figure and that consequently the appropriate life multiplier was 15.7. As there was a chance that the Claimant would develop syringomyelia as a result of the accident, the case of Wilson v. Ministry of Defence (1991) applied. It was highlighted by the Court that the case of Wilson makes it clear that the Court should be slow to invoke a concept of provisional damages, where it is in a position to make a judgment on future developments of the injury for which damages are being assessed. Accordingly, the Court refused to make a provisional award to cater for the possible eventuality. 7
C h r i s t o p h e r H a r p e r v. K h o d i n H u s s a i n This was a road traffic case in which liability was conceded pre-action. The insurers however were not in a position to settle the matter until they had received the Claimant s medical evidence. This was provided, and at the same time, the Claimant s solicitors informed the Defendant s insurers that proceedings would be issued if an offer was not advanced within 21 days. 28 days expired and as no offer had been put forward by the Defendant, the Claimant issued proceedings. That same day, the Defendant put forward an offer of settlement. This offer was expressly stated to be made pursuant to Part 36 of the CPR. The offer would have been received by the Claimant at around the same time that the proceedings were actually sealed by the Court. The offer was subsequently accepted. The Defendant argued that although the offer had been expressed to be made pursuant to Part 36, it was not in fact a Part 36 offer, and, secondly, that the offer should have been treated as it if it was a pre-issue offer, meaning that the Claimant was only entitled to predictive costs. These arguments were dismissed by the judge at first instance and the Defendant appealed. Part 36 was considered in detail, together with the offer in question. The offer complied with all the requirements of Part 36, save for that it did not specifically state whether or not it was taking into account any counter-claim. This was the basis for the Defendant s argument that it could not be a Part 36 offer. It was held on Appeal that in this case, there was no counter-claim, real or prospective, and nor could there be one, given the full admission in respect of liability and further admission that no issue would be taken with contributory negligence. It therefore followed that a Part 36 offer had been made. The Appeal was therefore dismissed. Readers will recall that an acceptance of a Part 36 offer gives rise to an automatic entitlement to costs. This claim highlights the importance of clarity when making offers to settle and an appreciation of the cost consequences. 8
A R T I C L E S Proving Spot Hire Rates on the Small Claim Track An issue facing defendant insurers in relation to road traffic accident claims is the amount a claimant can recover in respect of credit hire. This issue appears to be becoming more prominent in low value claims allocated to the small claims track. By way of background, only a claimant who is impecunious is entitled to recover credit hire rates. This is due to the fact that such rates include charges for additional benefits, which are irrecoverable pursuant to the case of Dimond v. Lovell (2002). A claimant can therefore only recover the equivalent spot hire rate, namely, the rate that would typically be charged by a local vehicle hire company, which is not providing credit or litigation management along with hire. In the assessment of the spot hire rate, it was held in the case of Burdis v. Livsey (2002 that the claimant must provide evidence to the rates charged by a car hire company in the relevant area. The evidential burden then passes to the defendant insurer to show that it would not have been reasonable to use that particular car hire company, and that the reasonable course would be to use another company with lower rates. The problem for a defendant is that it is expensive to obtain a report/witness statement on hire rates, especially if the witness has to attend Court. The costs of taking these steps in small claims matters can often therefore outweigh any potential benefits. It was previously thought, and accepted, that evidence simply printed off the internet relating to car hire charges would not suffice. However, defendants have recently started to rely on this type of evidence more and more. Such evidence is beneficial as it is brief and economical. The first issue to consider however, is whether or not internet rates are admissible as evidence. In the case of Smith v. Burney (2007) it was argued that it could not amount to evidence at all as there was no evidence in support. On appeal, the Court ruled that the evidence was admissible for the following reasons: Consequently, the internet rates were admitted. The second point to consider is whether or not the internet rates, as evidence are sufficient to prove the equivalent spot hire rates. Some of the criticisms of such evidence are as follows: 1. The full terms and conditions are not set out with the internet rates, leading to speculation about whether there are any additional charges in the small print and/or a substantial excess. 2. Whether the internet rates cover the relevant geographical area. 3. Whether the rates would cover young drivers or drivers with driving offences. 4. To what period the rates actually apply and whether they fluctuate on a regular basis. Despite these criticisms it may be possible to successfully argue that, on the basis of proportionality, internet rates should be utilised, especially in small claims matters. Whether or not internet rates can be used in evidence in fast and multi track cases has yet to be tested but could face greater difficulties due to evidential rules applying. Whether or not this type of evidence becomes more frequently used in practice remains to be seen. 1. Strict rules of evidence do not apply on the small claims track 2. The evidence spoke for itself, such that the Claimant could comment on the evidence without the need to cross examine a witness. 3. The evidence was easily verifiable. 9
ABI Agree Higher Credit Hire Rates As of 1 June 2008 the Association of British Insurers (ABI) has increased credit hire rates by 3.5% from 35.00 per day to 36.50 per day. Help Hire, a UK provider of credit hire services to accident victims welcomed the news. However, it is not good news for insurers who have to pay the rates. This increase will undoubtedly represent a growing cost for the insurance industry. Changes for Learner Drivers The Government (Driving Standards Agency) has published a consultation paper called Learning to Drive. This sets out proposals for a major review in the way learner drivers are taught and tested. Whilst the proposals do not incorporate all of the calls made by road safety groups and The Commons Transport Select Committee, for example, setting a lower alcohol limit for novice drivers, banning them carrying any passengers late at night, and raising the minimum driving age to 18, they do still amount to the biggest planned reform of the driver education system since the driving test was introduced in 1935. The need for change has become pertinent due to the number of newly qualified drivers, and their passengers who are being killed in road traffic accidents. Driving Test 1. The proposals are for a complete overhaul with a greater emphasis placed on testing driver initiatives. This will result in a much reduced theory test, but will also include several more probing questions based on photographs of common situations encountered by drivers, rather than only multiple choice questions. It is also proposed however, that questions to the theory test will no longer be published, meaning that candidates will no longer be able to memorise the answers without understanding the principles. For the situational awareness test, the candidate will be directed by the examiner to a road containing numerous hazards. The candidate will then be asked to explain to the examiner how they would deal with the risks presented. The on-road test will probably consist of a 20 minute examination focusing on manoeuvres, such as reverse parking, and a 30 minute test of the candidate s general driving ability. When carrying out the manoeuvres section of the examination the candidate will be required to choose when and where to carry out the manoeuvre safely. If the candidate fails either section of this test only that particular section will have to be retaken. 2. A section on independent driving will be introduced. It is believed that this will better prepare learners for the transition onto unaccompanied driving. Independent driving will not require candidates to have specific knowledge of an area or map read, but rather to navigate to a landmark or well sign posted location, without directions being given by the examiner. The aim of is to ensure the candidate is able to properly control the vehicle, whilst also dealing with other tasks, such as navigation. 10
2. An Improved Learning Process The aims are to produce a new syllabus for instructors and accompanying drivers setting out what needs to be learned, and a student workbook, which will explain the syllabus from a learner s perspective. It is believed that used properly the syllabus and workbook will offer a better style of learning and allow learners to avoid taking their test prematurely. 3. Better Information About Driving Instructors and Improved Instructor Training Driving Instructors will be given the power to compel learners to have extra lessons before taking their driving test. It is proposed that the Instructor will assess the candidate s readiness to take the practical driving test, and only once the learner has demonstrated an ability to drive safely and consistently, issue and sign a test readiness certificate. There will also be a star rating system developed in respect of Driving Instructors. This will provide learners with a method of comparing which Instructors in their areas have the highest pass rates and best qualifications. 10 Finally, the person presenting the candidate, whether it be the instructor or parent, will sit in the rear passenger seat during the practical test so they are present to listen to any feedback given by the examiner. If the candidate does not pass, the Instructor and/or parent will then understand the areas in which the learner needs more training and thereafter be better placed to provide remedial and focused training targeting the specific weaknesses highlighted 4. Further Options for Learning and Qualifications The proposals highlight the desire to create a culture of progressive learning, which can begin before people commence learning to drive in a car and which continues after a full driving licence has been obtained. It is hoped that additional training will make drivers safer by providing them with more rounded experience and greater self awareness. It is hoped that this will be reflected in their insurance premiums and greater employer confidence in driving ability If there are any topics you would like us to examine, or if you would like to comment on anything in this update, please e- mail the editor, Simon Evans, at simone@dolmans.co.uk 2 This briefing note is for guidance purposes only and should not be regarded as a substitute for taking legal advice. (c) Dolmans Solicitors. 17-21 Windsor Place Cardiff CF10 3DS 029 2034 5531 www.dolmans.co.uk 11