Update | Personal injury: Damages uplift, novel situations, fatal accidents

With the forthcoming implementation of the Jackson reforms on 1 April 2013, many claimant firms are bracing themselves for the drastic effect these changes will have.

This all seemed to move a step closer following the ruling in Simmons v Castle [2012] EWCA Civ 1039, but this case only created more controversy.

Its facts are relatively unremarkable. At first instance, a motorcyclist, S was awarded damages totalling £24,712.72 which included pain, suffering and loss of amenity (PSLA) of £20,000. S sought to appeal because this made no provision for the risk of him developing further disability.

He was granted permission to appeal, but following this, the defendant made a part 36 offer which, while being for the same amount, was made on a provisional basis. S accepted and so, the Court of Appeal was only required to approve this settlement. However, they considered this an opportune moment to implement the Jackson reforms on general damages and declare that ?awards for PSLA in personal injury claims, nuisance, defamation and all torts causing suffering, distress or inconvenience would be increased by 10 per cent from 1 April 2013. This would have meant that if S’ claim settled after this date, the PSLA award would have been £22,000.

Implementing the ten per cent uplift

While on the surface this may seem straightforward enough, there was one major difficulty. The court was silent as to the claimants who have or will have already entered into a conditional fee agreement (CFA) with a success fee before the above implementation date, but whose cases settle after. It was not clear whether these claimants would be entitled to recover the contractual CFA success fee and the 10 per cent uplift on damages. If there was a dispute on this point, it appears the defendants and their insurers would have most likely lost out as the courts would have been bound by Simmons to automatically increase general damages and the costs judges bound by the terms of a CFA to allow a reasonable success fee. Such disputes would have left the costs judges in an unenviable position.

As a consequence and following criticism by the Association of British Insurers, the Court of Appeal has taken the very unusual step of re-opening this case. The matter was since re-heard and a revised ruling handed down confirming the uplift will not be applied to cases where a CFA was entered into before 1 April 2013.

It seems that these consequences have arisen because of the unusual manner in which this ruling came into being. If an otherwise unremarkable case was not turned into something of such significance and particularly, if the court was addressed by counsel on both sides on the issue of increasing damages (the latter being absent in this case when it was first heard), this may have all been avoided.

However, and notwithstanding all the other criticisms of the Jackson reforms, this case affirms many peoples’ fears ?about the complexity and workability of these regulations.

Novel situations

Turning to liability, the last few months have seen some interesting developments.

In Selwood v Durham CC & Others [2012] EWCA Civ 979, the court provided some useful commentary on establishing a duty of care in novel situations.

Also, this case is all the more remarkable because a public authority, namely the NHS, was held to owe a duty for a third party’s criminal acts whereas in most cases, there are policy arguments against this.

The claimant, A, was a senior social worker employed by the respondent county council in a child protection team. A was the designated social worker of a girl whose father, G, suffered mental problems.

There were three defendants; the respondent county council, (R1) and 2 NHS trusts, (R2 and R3).

These parties were considerably interlinked. R2 operated a Child and Adolescent Mental Health Services team (CAMHS) involved in the care of G’s daughter and another one of his children. This Trust also operated a Community Health Team (CMHT) and Crisis Resolution Team (CRT) which shared staff with R1. Also, CMHT and CRT looked after G.

R3 ran a small acute mental health ?ward of which G was a patient. The psychiatrist looking after G here was also associated with CMHT.

In addition to the above, all three defendants signed a document called “Working together in the delivery of services to adults and children” which required co-operation on many matters between them.

In this case, there was evidence to show that both R2 and R3 knew G was making violent threats against A, but failed to inform her or R1.

The incident giving rise to the claim occurred when A attended a case conference where there were no security arrangements. She was attacked by G causing her grave injuries which resulted in her action against the three defendants.

R2 and R3 however made an application to strike out the claims against them alleging that they owed A no duty of care for the actions of a third party (i.e. G). In referring to the three-stage test of Caparo Industries plc v Dickman [1990] 2 AC 605, (which requires foreseeability, proximity and fair, just and reasonableness) it conceded the attack was foreseeable, but disputed the other parts were made out.

On proximity, R2 and R3 referred to cases where no duty was found, but in those cases, the threat of violence was not directed at a specific person or class of persons.

On the remaining part, they claimed there were policy arguments against such a finding as it would impose a duty on the NHS to investigate all threats thereby diverting attention from their primary function of looking after patients. A similar argument prevents claims against other public authorities such as the police.

These defendants however acknowledged that if there was an ‘assumption of responsibility’ this would be another way of proving a duty of care, but they erroneously argued that this required some factual basis of something “said or done” (such as an express or implied agreement to protect A) which did not exist here.

At first instance, the judge stated that proximity could be established, but considered that in order to attach liability for the actions of a third party, something more, namely an assumption of responsibility was required. For this, he more or less agreed with the defendants that some action or undertaking was required to create the assumption. He also agreed there were policy arguments against finding NHS trusts liable.

Accordingly these claims were struck out and so, A appealed.

Dame Janet Smith provided a clear and helpful summary of the law. Prior to the Caparo judgment, the courts had outlined a set of different scenarios where a duty could be established (Dame Smith acknowledged these could overlap). A defendant assuming responsibility was one example. If a three part test was made out, that was sufficient.

As concerns whether such an ‘assumption’ existed here, she disagreed with the lower court’s approach considering that this could be inferred from the circumstances. The interlinking between the defendants and the written agreement were considered sufficient for this inference.

Dame Smith stated this was one aspect of the wider issue of whether it was fair, just and reasonable to hold that there was a duty and that with public authorities such as the police, ‘special circumstances’ were also required. In particular, claimants in a ‘special relationship’ with the defendant may be deemed to be owed a duty of care. Such a relationship is more likely to exist if the class of persons were small or restricted as opposed to the ‘world at large’ where the policy argument is stronger. Here, A was part of a small group of social workers who were entitled to protection from harm, which was potentially also as a matter of public policy.

As such, she allowed the appeal meaning this case will now proceed to trial.

Some will consider that this case is restricted to the ‘special circumstances’ Dame Smith describes. However, it is incredibly significant that a public body such as the NHS could be deemed to owe a duty of care in appropriate circumstances. It will be important to see how the law develops following this ruling, but it is likely that multi-disciplinary teams will need to review their procedures when any worker is at risk.

Fatal accidents

On a different note, Swift v Secretary of State for Justice [2012] EWHC 2000 QB represents an attempt by the claimant, C to address one of the many anomalies of the Fatal Accidents Act 1976 (FAA).

Currently, section 1(3)(b) of the FAA entitles someone who has lived with their partner for two or more years to claim for a ‘loss of dependency’.

C, who cohabited with her partner for less than the required two years before he died from a workplace accident, sought a declaration under the Human Rights Act 1998 that FAA section was incompatible with articles 8 (the right to private and family life) and 14 (to be able to enjoy those rights without discrimination) of the European Convention on Human Rights and Fundamental Freedoms (ECHR) because, among others, it treated her less favourably than those who had cohabited for at least two years.

Sadly, C was unsuccessful. First, concerning article 8, the court had to consider whether the government were under a ‘positive obligation’ to extend section 1(3)(b) to these other cohabitants. For this, there needed to be a ‘direct and immediate link’ between the FAA and her family life which court found did not exist because it considered that the purpose of the FAA was not to “improve, promote or benefit ongoing private life” but to provide financial assistance to certain bereaved persons. The action also failed under article 14 because C was unable to show that she fell within a class of persons who received less favourable treatment. The length of someone’s cohabitation was not a ‘characteristic’ that could form the basis of discrimination.

This aspect of the FAA is just one of ?many which attract widespread criticism. As an example, many consider the bereavement award to be disproportionately low. There is also no logical basis for requiring some class of persons - like parents who are dependent on financial support from their grown up children who are earning themselves – to prove a dependency whereas for others, ?it is automatic.

This case confirms however that ?arguing any incompatibility with the ?ECHR is not the best route, and that the only means of resolving some of the many anomalies of this act would be to lobby parliament for change.