This article first appeared in the March 2019 edition of the Liverpool Law Society magazine

What are the costs consequences when a Defendant makes a Part 36 offer and then without withdrawing it simply reduces the value of that offer under CPR 36.9, thereby leaving the offer open for acceptance throughout – but in its downgraded state? Should the reduction be treated as a new offer, thereby entitling C to a new 21-day period for consideration? This issue was considered recently in a County Court case in which I acted for the Defendant.

The claim arose from an RTA which was uploaded to the portal. Proceedings were issued and shortly afterwards in October 17, the Defendant made a Part 36 Offer of £17,000. That offer expired in early December, following which the matter was allocated. In March 18 the Defendant notified the Claimant that the terms of the offer had been varied to offer £10,000, i.e. the offer had been downgraded. The matter was listed for trial but 11 days before the trial, the Claimant accepted the £10,000.

The parties agreed that, pursuant to CPR 36.20(4), as a result of accepting the offer out of time C was entitled to costs for the stage applicable at the date on which the ‘relevant period’ expired and that the claimant was liable for the defendant’s costs for the period from the date of expiry of the relevant period to the date of acceptance, but there was a dispute between the parties as to when the relevant period expired.

D contended that there was just one offer and therefore C was entitled to costs limited to the expiry of the initial Part 36 offer (post-issue/pre-allocation) and C had to pay D’s fixed costs calculated as the difference between the costs applicable at the time when the offer was accepted (post listing/pre-trial) and the costs to which C was entitled (post-issue/pre- allocation). By contrast, C contended that C was liable to pay only those costs arising after the expiry of 21 days following the revision of the offer and thus from 6th April 18 (post-listing /pre-trial).

The parties agreed that the question for the Court was when the ‘relevant period’ expired.

D argued that there had been only one offer and that the variation simply meant that the terms of that offer had been changed pursuant to CPR 36.9 which permits an offeror to change the terms of the offer without permission. CPR 36.9(5) expressly provides for an upgraded offer to create a new offer and a new period of 21 days in which to consider it. D argued that the Court could infer that if the draftsman had intended that a downgraded offer would amount to a new offer he would surely have drafted 35.9 to apply to any varied offer rather than only an improved offer.

D further argued that the Court need only step back and look at the justice of the situation; if an offeror decides that the existing offer is too low and that more should be offered, it is only right that C recover the costs for the period between expiry of the first offer and the expiry of the improved offer (which, pursuant to 36.9(5) is a new offer) since the improved offer shows that C was justified in not accepting the lower offer and entitles C to time to consider the improved offer. However, where an offer is revised downwards, C has in effect had the opportunity to accept a sum equal to or greater than the settlement sum since the offer was made (in this case since October 17). In these circumstances C was not justified in declining to accept the offer and causing D to incur continuing costs for 9 months after expiry of the higher offer. Moreover, justice demanded that C ought not to be compensated for recovering less than the sum that had initially been on offer.

The Claimant argued that the immediate impression given was of two offers, especially since the event which triggered the settlement of the case was the ‘second’ offer. C argued that the purpose of Part 36 was to encourage parties to settle and that an offer had to be taken in context. At the stage C accepted the offer a trial was looming and the perception of risk had changed. C argued that the earlier offer had impliedly been withdrawn and D ought not to have the costs benefits of that offer when it was no longer available for acceptance.

C argued that there was no express provision in the rules which set out the relevant period where an offer was downgraded and therefore it would be dangerous to draw any inference from the rule about upgraded offers attracting an extra 21 days. Had the rule drafters intended that downgraded offers would not attract an extra 21 days then given that they went to the trouble of making an express provision as to the existence of a second ‘relevant period’ when an offer was upgraded, the fact that nothing had been said about downgraded offers could not give rise to any inference at all.

Having heard the argument, the Deputy District Judge accepted D’s proposition because he found that it would be unjust to award costs to C for the extra period.

Although this was a fixed costs case there are parallels with the operation of 36.13(5) in standard costs cases which require the Court, unless it considers it unjust to do so, to order that C have costs up to the date on which the relevant period expired and that the offeree pay the offeror’s costs thereafter, until acceptance. In deciding if it is “unjust’ the Court must consider ‘all the circumstances’ including the list of factors in 36.17(5), hence there is potentially a higher hurdle to cross. However, in the writer’s view, the injustice of an offeree having costs for a period after expiry having declined to accept the earlier offer and later settled for less, will weigh heavily in the balance against the other factors.

Michelle Fanneran, Barrister Complete Counsel

Article by James Byrne

Though this truism was scribed by Plato around 380 BC in his seminal work on justice, ‘The Republic’, little has changed.  Fraudulent personal injury claims are a booming business.  You only have to open the tabloid press on any given day and you are likely to see the photograph of a smiling sun-tanned holidaymaker posing by a large plate of seafood with a headline above it informing that that ne’er-do-well will be spending 18 months at Her Majesty’s Pleasure for fraudulently claiming gastroenteritis whilst in Corfu.

Legal background

Prior to the coming into force of section 57 of Criminal Justice and Courts Act 2015, if a Defendant suspected that the claim they were defending was fraudulent they had to rely on CPR r3.4(2) (b) or the court’s inherent jurisdiction to have the claim struck out as an abuse of process.  Where the claim was founded on an obvious falsity such as an RTA where CCTV showed it did not actually happen this was relatively straight forward, but what about cases involving exaggeration?  Convincing a Judge that an exaggeration claim should be struck out for fraud was a herculean task.

The reason for this was outlined in Summers v Fairclough Homes Ltd [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][2012] 1 WLR 2004 where the Supreme Court commented; first, that such an application should only be granted as a last resort because it was a draconian step that would deprive a claimant of a substantive right to a fair trial; second, if fraud was found then Judges could account for it in their assessment on liability and quantum in the ordinary way; and third, there were other ways to punish and/or deter claimants for making fraudulent claims such as: orders for costs, reduced interest, proceedings for contempt and criminal charges.

Section 57:

(1) This section applies where, in proceedings on a claim for damages in respect of personal injury (“the primary claim”)

(a) the court finds that the claimant is entitled to damages in respect of the claim, but

(b) on an application by the defendant for the dismissal of the claim under this section, the court is satisfied on the balance of probabilities that the claimant has been fundamentally dishonest in relation to the primary claim or a related claim.

(2) The court must dismiss the primary claim, unless it is satisfied that the claimant would suffer substantial injustice if the claim were dismissed.

(3) The duty under subsection (2) includes the dismissal of any element of the primary claim in respect of which the claimant has not been dishonest.

(4) The court’s order dismissing the claim must record the amount of damages that the court would have awarded to the claimant in respect of the primary claim but for the dismissal of the claim.

(5) When assessing costs in the proceedings, a court which dismisses a claim under this section must deduct the amount recorded in accordance with subsection (4) from the amount which it would otherwise order the claimant to pay in respect of costs incurred by the defendant.

The section came into force on 13 April 2015, and was the Parliamentary response to the fear that lying, through seriously false claims, undermined the administration of justice in the eyes of the public.  In drafting the legislation in the way that it did, Parliament specifically rejected the former line of jurisprudence, that it is in principle more appropriate to penalise a fraudulent claimant as a contemnor than relieve the defendant of what the court has held to be a substantive liability (Lord Clarke in Summers at §61).

Instead, though severe, the language of s.57 provided “[95]…that in a case where such a claim has been exaggerated by a “fundamentally dishonest” claimant, the court is to dismiss the claim altogether, including any unexaggerated part, unless satisfied that substantial injustice would thereby de done to him… [96]  Severe as the rule is, these considerations demonstrate that there is  no occasion to depart from its very long-established status in relation to fraudulent claims, properly so called… Nor can there be any room for the rule being in some way limited by consideration of how dishonest the fraud was, if it was material in the sense explained above, that would leave the rule hopelessly vague” (Versloot Dredging BV v HDI Gerling Industrie Versicherung AG [2017] AC 1 §95-95).

‘Fundamental Dishonesty’

The key words in the section are “fundamental dishonesty”.  Unhelpfully, nowhere in the section, nor the statute for that matter, did Parliament seek to define what fundamental dishonesty actually means in respect of this Act.  It was not an unfamiliar term however.  With the introduction of qualified one-way cost shifting (QOCS), CPR r44.14 had introduced the phrase as part of an effort to deny the fraudulent claimant protection from defendant costs.  Within the body of case law dealing with this subject matter, the case of Howlett v Davies [2017[ EWCA Civ 1696 cited with approval the County Court judgement of His Honour Judge Moloney QC in Gosling v Hailo (29 April 2014) stating that the phrase had to be interpreted purposively and contextually so that it distinguished between two level of dishonest: dishonesty which was not fundamental (QOCS would still apply), as opposed to dishonesty which was fundamental (QOCS dis-applied).  In particular, at §45, HHJ Moloney QC stated “The corollary term to ‘fundamental’ would be a word with some such meaning as ‘incidental’ or ‘collateral’.  Thus, a claimant should not be exposed to costs liability merely because he is shown to have been dishonest as to some collateral matter or perhaps as to some minor, self-contained head of damage.  If, on the other hand, the dishonesty went to the root of either the whole of his claim or a substantial part of his claim, then it appears to me that it would be a fundamentally dishonest claim: a claim which depended as to a substantial or important part of itself upon dishonesty.”

There is, however, a clear distinction between the wording of s57 and CPR r44.16 (aside from the amount of costs to be recovered).  This rule states that the court must be satisfied that the ‘claim’ is fundamentally dishonest, whilst in s57 it is the claimant. In practical terms whether this makes a difference remains to be seen, only in the most limited of circumstances would a situation arise where a claim would be found to be fundamentally dishonest without the same finding being made against the claimant.

Developing a model for s57

It was only in December 2017 (judgment released in January 2018) that the High Court gave guidance on the provisions of s57 ‘fundamental dishonesty’.  In London Organising Committee for the Olympic and Paralympic Games (in Liquidation) v Sinfield [2018] EWHC 51 (QB), Mr Justice Knowles ruled that a volunteer injured whilst working at the London Olympics had exaggerated his special damages by creating a fictitious £14,000 claim for gardening assistance that represented 28% of the whole of his claim (42% of his special damages claim), and that the exaggeration was one which was fundamentally dishonest.  Giving general guidance Mr Justice Knowles set out the following principles:

• Dishonesty is to be judged according to the test set out by the Supreme Court in Ivey v Genting Casinos Limited (t/a Crockfords Club) [2017] UKSC 67).

• It was for the defendant to prove on the balance of probabilities that the claimant has acted dishonestly in relation to the primary claim and/or a related claim, and that he had thus substantially affected the presentation of his case, either in respect of liability or quantum, in a way, judged in the context of the particular facts and circumstances of the litigation.

• By using the formulation ‘substantially affects’ he intended to convey the same idea as the expressions ‘going to the root/heart’ of the claim.

• An argument that the greater part of the claim was honest would be irrelevant for the purposes of fundamental dishonesty; as long as the dishonest head of loss was not peripheral, the entire claim would be struck out.

• In potentially affecting the defendant’s liability in a significant way, by ‘in the context of the particular facts and circumstances of the litigation’ he meant that the dishonesty should be judged against the value of the claim, not the wealth of the defendant.

• In respect of the approach of the court to hearing such an application it was suggested:

• First, the court would need to consider whether the claimant was entitled to damages.  If not, that would end the matter subject to CPR r44.16 arguments.

• Second, if the answer was yes, the court would need to determine whether the defendant had proved, to the civil standard, fundamental dishonesty.

• Third, if yes, then the court must dismiss the claim unless the claimant would suffer substantial injustice if the claim were dismissed.

• Substantial injustice must mean more than the fact the claimant would lose his damages for those heads of loss that were not tainted by dishonesty, and if it arises it will normally be as a consequence of the loss of those damages.

Hopefully, now armed with Mr Justice Knowles’ guidance, defendants can have confidence that where they have evidence of a fundamentally dishonest claimant they will more likely than not be spared the upfront cost, time and effort of having to settle matters at trial.[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Reaney – the yet to be resolved questions

The case of Christine Reaney v. University Hospital of North Staffordshire NHS Trust (1) and Mid Staffordshire NHS Foundation Trust (2)^{[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][1]} has now compromised on a largely pragmatic basis, reflecting both parties’ perception of the risks in proceeding. These risks were increased by Mr Justice Foskett’s understandable difficulty in considering how he should proceed on the remitted hearing after the decision of the Court of Appeal. This difficulty is reflected in his written Preliminary Judgment on remission in [2016] EWHC 1676 (QC) where the Judge discussed the Court of Appeal’s Judgment in [2015] EWCA Civ 119, allowing the appeal against Mr Justice Foskett’s initial Judgment in [2014] EWHC 3016 (QB). The Court of Appeal, whilst allowing the Defendant’s appeal on the most significant issue in the case, that is the legal identification of loss in the context of the claim, were not prepared to give any further illumination as to how this should be approached at the remitted hearing, notwithstanding requests from both parties. There are, thereafter, unresolved questions which are likely to be considered in forthcoming cases.

The facts of the case are well known and require little exposition by way of background. Christine Reaney had the misfortune at the age of 61, in 2008, to develop transverse myelitis, a rare constitutional inflammatory condition which damaged her spinal cord and rendered her paraplegic. Her disability from this illness, however, was substantially increased by the Defendants’ breach of duty in permitting the Claimant to develop bedsores and failing to treat them properly, so that she became septic. On Mr Justice Foskett’s findings in the first judgment, which were not appealed, the Defendants’ breach of duty made a substantial difference to the Claimant’s disability, in particular in terms of rendering her permanently bed-bound; whereas he found she would have enjoyed a much more substantial degree of independence to the extent of independent transfers had she not had her injury aggravated by the Defendants.

There was no doubt that the Claimant’s overall presentation would have entitled her to very substantial damages in terms of care, therapies, accommodation, etc. The issue at first instance was the extent to which the Judge in his assessment of damages should reflect the fact that the Defendants were only responsible for aggravating the Claimant’s disability, given that she would have been paraplegic in any event. The initial award made by Mr Justice Foskett, in practical terms, was equivalent to that which would have been made had the Defendants been responsible not only for the aggravation but also for the Claimant’s paraplegia.

1. QUESTION 1: How is additional loss defined?

In one sense, both parties accepted at first instance that the Defendants should only be liable to the extent that they had caused additional loss to the Claimant. However, they argued that as a matter of law that this should be assessed in significantly different ways.

Notwithstanding Mr Justice Foskett’s protestations, it is suggested that the analogy of apples and pears is helpful. The Defendants’ case was that the Claimant’s loss should be assessed in the same way for both the loss resulting from the Claimant’s constitutional condition, and the loss caused by the Defendants breach; that is to assess the Claimant’s reasonable requirements arising from both. This would form the subject of an award of damages (apples with apples). This analysis would apply even if, as here, the Claimant would not be in a position to finance her reasonable requirements arising from her pre-existing needs.

On the Defendants’ argument as accepted by the Court of Appeal, the position of a constitutionally injured Claimant should be no different to that of a Claimant who has already suffered loss as a result of breach of duty but has not been effectively compensated in respect of that loss; Performance Cars Ltd v. Abraham [1962] 1 QB 33[2]. This important conclusion is somewhat submerged in Paragraphs 28 and 29 of the judgment but the implication is that the Court of Appeal endorsed the Defendants approach to identification of loss.

The Claimant’s argument at first instance was that the comparison should be between the actual factual situation likely to have resulted from the pre-existing injury (the “make do” position) with the Claimant’s current reasonable requirements for her overall disability (apples and pears).

It was realistically conceded by the Claimant in the Court of Appeal that the apples and pears analysis could not be sustained and that specifically the Claimant’s personal circumstances could not be taken into account so as to establish whether a loss had occurred as a matter of law.

That the happenstance of the Claimant’s impecuniosity can be taken into account in assessing whether a loss had occurred as a matter of law is not supported by any authority and could not reasonably represent a proposition of law. The Claimant conceded at first instance that if she had been able to finance the care package and accommodation required as a result of her paraplegia, she would not have suffered any loss as a result of the Defendants’ breach of duty. Such an approach could reasonably be objected to as it penalises those who have acquired wealth. But whilst wealth can be acquired fortuitously through inheritance or even a lottery win, the usual position is that wealth is acquired through talent and industry, and persons who achieve this could reasonably object if they were required to finance their own care programmes and accommodation needs. The common law does not traditionally penalise prudence and endeavor, for example, as is indicated by the non-deductibility of insurance monies.

Further, such an approach would be very difficult to work in practice. Whilst the position was easy to assess in relation to Mrs Reaney, given her very extensive reasonable requirements and relative impecuniosity, difficulty could arise in more borderline cases in assessing the Claimant’s actual worth and the extent to which the Claimant should be expected to finance their own care package and accommodation needs. For example, would the Claimant be required to exhaust his or her own life savings or would some surplus over these savings be required?

2. QUESTION 2: What does “qualitatively different” mean?

The Court of Appeal considered, at paragraph 19:

“It was (rightly) common ground that if the Defendants’ negligence caused Mrs Reaney to have care and other needs which were substantially the same kind as her pre-existing needs, then the damage caused by the negligence was the additional needs. On the other hand, if the needs caused by the negligence were qualitatively different from her pre-existing needs, then those needs were caused in their entirety by the negligence.”

It will be appreciated that these are two complementary propositions: specifically that the needs will not be considered merely additional if they are qualitatively different to the Claimant’s pre-existing needs. In the Court of Appeal the Claimant attempted to argue that the current needs for Mrs Reaney were qualitatively different from those which would have arisen from paraplegia alone, relying in particular on the difficult decision of Mr Justice Edwards-Stuart in Sklair v. Haycock [2009] EWHC 3328 (QB)[3]. The Claimant’s argument in the Court of Appeal in Reaney was that there was evidence that the new needs were qualitatively different and therefore could be reflected in their entirety in the award of damages.

This was a difficult argument in the circumstances, given that this issue had not been explored, and was not the subject of submissions at the first instance hearing. Reference was made to suggestions that carers of different quality would now be required. This was dealt with very briefly in the evidence, and in practical terms it is difficult to envisage how there could be a meaningful difference in the quality of carers once the Claimant’s needs were those of a paraplegic. The Court of Appeal unsurprisingly considered that there was insufficient evidential basis for this submission to be advanced.

In the circumstances, this issue remains for further analysis in forthcoming cases, but on a proper understanding of the facts of Reaney it appears unlikely that this argument would have enjoyed any success, even if fully explored at first instance. The Court of Appeal helpfully analysed the Judgment in Sklair and essentially concluded that the Judge reached the right conclusion, but for the wrong reason. In Sklair the Claimant had pre-existing care needs resulting from Asperger’s syndrome. These needs were essentially of a supervisory nature. The Claimant was then injured seriously in a road traffic accident and required constant 24/7 care. The Judge assessed the damages on the basis of 24/7 care and took no account of the pre-existing care needs. In the Court of Appeal judgment in Reaney it was accepted the Judge was correct to do this, but because the 24/7 care needs could be considered as caused in their entirety by the Defendant’s breach of duty. The pre-existing care needs were qualitatively different; that is that they stood no basis for comparison with the care needs now required.

This analysis falls under the broad principle of res inter alios actos reflected in the older authority of Shearman v. Folland^[4]. In that case, the Court of Appeal refused to deduct from the costs of an elderly Claimant requiring nursing care provision the costs of living in a hotel where she had resided before the injury. The Claimant would rather have lived in a hotel and the Court of Appeal considered that the Defendants had caused her to have to live in a nursing home, against her wishes. On the other hand, they indicated that had more direct comparisons been made, for example as to the provision of food in both the hotel and nursing home, then arguments as to loss could arise.

On the facts in Reaney, the care regime reasonably required from the pre-existing injury as compared with the care now required, even allowing for any dubious arguments as to the actual quality of care, could not be said to be qualitatively different, as properly understood. In practical terms, Mrs Reaney needed more care of the same type, but would have had substantially comparable care needs in any event.

3. QUESTION 3: To what extent must the Claimant prove the likely future actual arrangements so as to quantify loss?

Given the compromise of the case, this issue was never explored in detail. On the facts of the case, it can be best illustrated by reference to the accommodation claim. On the basis of a proper understanding of additional loss, and there being no argument as to “qualitatively different”, the Claimant would undoubtedly have had reasonable requirements for single-storey accommodation arising out of her paraplegia, which should then be reflected in the assessment of loss. It could be argued that the Claimant’s accommodation requirements were increased as a result of the Defendant’s breach of duty, in particular through the need to provide sleeping accommodation for additional carers.

However, on the correct legal analysis, the Defendants would only be liable to the extent that they had caused these additional requirements, say a four bedroom bungalow as opposed to a three bedroom bungalow. The question would then arise as to whether the Defendants should be liable to pay the Claimant for this additional loss in circumstances in which by reason of the Claimant’s inability to finance the purchase of the three bedroom bungalow the loss would never occur in fact.

In this context, the separate requirements of proving reasonable requirements so as to constitute a loss as a matter of law, and factual proof of actual loss so as to form the basis of quantification, should not be conflated.

The Claimant sought to suggest that arguing that the actual arrangements should be proved was an attempt to revive the now discredited approach of suggesting that a Claimant must prove loss in terms of actual expenditure. This approach was rejected in Donnelly v. Joyce [1974] QB 454[5] and subsequent cases. It is now accepted that loss can be proved without the need to prove actual expenditure, as evidenced in awards for gratuitous care regimes. However, these authorities do not go so far as absolving the Claimant of proving a factual basis of loss.

The alternative argument was the proposition that a Claimant can expend his or her damages as he or she wishes. This proposition is substantially derived from claims for property damage where it is accepted the Claimant does not have to prove repair or exact replacement of a damaged chattel. However, in this context the Claimant has already proved in factual terms the loss that is represented by the damage to the chattel. Such a proposition cannot be extended in a simplistic and overarching way to any claim for damages, in particular, for future loss.

This is notwithstanding the approach of Mr Justice Bean in Knaur v. Ministry of Justice [2014] EWHC 2513[6] where the Judge held that he could take this approach in relation to a future services claim. Instructively, he directed himself in accordance with the proposition that if a Rolls Royce is damaged, the Claimant is entitled to expend the damages represented by the costs of repair in such way as the Claimant wishes. However, as suggested above, this ignores the crucial distinction that damage is already proved in this case by reference to the physical damage to the Rolls Royce. There is in fact no authority beyond this which would suggest that a Claimant can establish a claim for future loss on a notional basis without any evidence as to the likely occurrence of the circumstances said to quantify the loss and then expend damages as thought fit.

If this was the case, then the Claimant could claim for accommodation needs even if the Claimant had no intention of moving house, or indeed even if the Claimant already had suitable accommodation. Such an approach would also be inconsistent with the line of authority in relation to the Claimant’s right to seek private medical treatment, but where Courts can take into account the likelihood of the Claimant in fact obtaining treatment privately as opposed to the NHS provision; most recently, XYZ v. Leeds Teaching Hospitals. In fact, the routine approach of a Judge assessing the likely future factual position is well illustrated in paragraph 18 of the Quantification Judgment where Mr Justice Foskett accepted that he could not award damages on the basis of the full care regime during the period whilst a move to new accommodation was pending.

4. QUESTION 4: Why should the Claimant’s needs be assessed in such a radically different way in relation to “reasonable requirement” for loss in tort and under statutory provision, in particular Section 47 of the National Health Service and Community Care Act 1990?

This issue was only relevant obliquely in this case. However, it is a striking feature of the Judgment that Mr Justice Foskett considered that there could be very substantial and justifiable improvement in Mrs Reaney’s quality of life through the arrangements subject to the claim for damages. Nonetheless, if approached directly on the facts of the case, he would have considered that the Local Authority were not in any way in breach of their statutory obligations in providing a much lower value care package. This distinction is characteristically justified by reference to the statutory provisions, in particular the use of the word “needs”, the stretched financial position of Local Authorities and the policy difference in relation to a tortfeasor. All these arguments are questionable, in particular in the context of a claim against the NHS. Perhaps the most telling unresolved question from the Reaney case is therefore why this very marked disparity is really justified.

^[1] Reaney v University Hospital of North Staffordshire NHS Trust [2016] EWHC 1676

[2] Performance Cars Ltd v. Abraham [1962] 1 QB 33

[3] Sklair v. Haycock [2009] EWHC 3328 (QB).

^[4] Shearman v Folland (1950) 2 KB 43

[5] Donnelly v. Joyce [1974] QB 454

[6] Knaur v. Ministry of Justice [2014] EWHC 2513[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Synopsis

The Claimant employee was exposed to asbestos dust during the course of his employment over 50 years ago. This judgement sheds light on the importance of selecting the correct expert and the need for sound methodology to analyse the possible extent of asbestos exposure when proving causation in industrial disease cases.

The Claimant was diagnosed with interstitial lung fibrosis, a disease which in 70% of cases is idiopathic (i.e. there is no identifiable cause). It can also be caused by exposure to asbestos, in which case the condition is known as “asbestosis”.

The single issue to determine was “how much asbestos had the Claimant been exposed to?” The judge accepted 25 f/ml years cumulative exposure as the benchmark for proving asbestos exposure caused the Claimant’s disease. The judge recognised, obiter, that this threshold might be decreased in some cases, but the fact both experts treated 25 f/ml years as a bright line meant there was no need to go behind that figure.

Exposure took place at the Defendant’s factory for 3 years, as a result of using dustbins full of asbestos to douse fires that were ignited during the production of magnesium. Further exposure to asbestos dust would occur in the 30 minutes during which the resultant mess was cleared. Around 9 fires would occur per year per machine. The Claimant operated one machine, and his colleagues the others.

The Claimant’s expert had no practical experience of measuring asbestos exposure outside the context of asbestos litigation. The judge accepted this would affect the weight of his evidence. Relying on an obscure TUC pamphlet aimed at informing workers of their rights, the expert concluded that the act of tipping out the dustbin, would result in a peak asbestos concentration 10,000 f/ml (the top-end of a concentration range of 10-1000 f/ml set out in abstract in the pamphlet) and so a mean of 1000 f/ml.

This figure of 10,000 f/ml far exceeded the figures provided in a seminal study (“Dr Harries’ study”), which provided that similar activities would result in concentrations of asbestos in the hundreds, not thousands f/ml. The Defendant’s expert stated that he had witnessed visually some of the activities in Dr Harries’ study, and believed the high levels of asbestos dust exhibited were similar to the release of dust in the present case.

The Defendant’s expert had been a member of the Committee for Fibre Measurement and so was strongly placed to assist with quantifying the asbestos exposure. He carefully analysed the degree of asbestos dust that would drift away from the Claimant along the rising thermal currents caused by the fire.

Further, he took issue with the Claimant’s assumption that the exposure to asbestos would be the same regardless of whether the fire was at the Claimant’s own machine or that of a co-workers. The figure the expert reached was a peak concentration of 2000 f/ml.

The judge concluded that he preferred the Defendant’s expert evidence. There was no provenance behind the 10,000 f/ml peak figure (a fortiori nor the 1000 f/ml mean figure), nor any clear reason why the highest possible figure in the pamphlet had been selected by the Claimant. Nor was the unexplained departure from the figures in Dr Harries’ study justified, where that study had been published in a reputable journal and had used clear methodology.

In contrast, the Defendant based his figures on Dr Harries’ study, but made appropriate allowances in the Claimant’s favour, such as account for any remaining dust lingering throughout the day. He properly considered the impact of the Claimant’s distance from the dust, and the fact that on the evidence, the workers would clean up as quickly as possible, reducing the exposure time.

The result of these findings was that the threshold of 25 f/ml years was not met. The figure was more likely to be below 10 f/ml years. This judgement is a welcome shift away from reactive, policy-driven decision-making and a nod toward logical, scientific analysis.

Sammy Nanneh

For a full copy of the judgement text, click here

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Further Comment

Warne is an interesting decision for a number of reasons.

First, it represents a finding of causation by Idiopathic Pulmonary Fibrosis (“IPF”) in the face of known asbestos exposure. In this context, none of the clinical features are necessarily decisive. The late onset of disease and the significant progression did favour IPF, but they would have been trumped had there been a finding of sufficient asbestos exposure to cause asbestosis. Historically, such cases have been determined against Defendants because of the known asbestos exposure history. However, with the passage of time, cases involving genuine heavy exposure will become less common and it is likely that Defendants will be able to defend more cases by reference to the alternative diagnosis of IPF.

Secondly, the Judge acknowledged the greater expertise of a trained Occupational Hygienist, Martin Stear, over that of a traditional experienced engineer, Ken Taylor. Whilst experts such as Ken Taylor can bring great value to these cases in terms of their contemporaneous knowledge of working conditions in the 1950s and 1960s, they were trained in an environment in which numerical assessment of asbestos exposure was unknown. Mr Stear, on the other hand, through his training as an Occupational Hygienist and experience as a Principal Specialist Inspector at the HSE, had much greater insight into the likely actual levels of exposure from the situation as described in the evidence. At one stage, there appeared to be a curious judicial hostility, in particular in the High Court in London in relation to the instruction of occupational hygienists in cases of this nature. This hostility does now appear to have ended and decisions such as this show the wisdom of so doing.

Thirdly, perhaps the most interesting point is one which did not require resolution on the facts of the case, that is whether the exposure would be considered substantial within the meaning of Section 47 of the Factories Act 1937. The point did not arise for consideration since if the Claimant’s case in relation to exposure and causation had succeeded, then the exposure would inevitably be regarded as substantial, that is at 25 fibre/ml years, creating a risk of asbestosis specifically. If the claim, however, had been a mesothelioma claim and Martin Stear’s evidence was accepted, then there would undoubtedly have been sufficient exposure to cause mesothelioma and the question would then arise as to whether the Defendants would have been in breach of their statutory duty to prevent dust exposure under Section 47 of the Factories Act 1937.

Sammy’s article, which appears below, discusses the relevant authorities. This issue is becoming increasingly important; in particular in the light of the Macdonald v National Grid [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][2014] UKSC 53 decision (see below), which confirmed that exposure need only be substantial at emission, not necessarily inhalation, to amount to a breach under the Act. It is obvious that the exposure must be substantial at its occurrence, often synonymous with a large dust-cloud. The more difficult issue to determine is whether any degree of duration or repetition is necessary so as to constitute substantial exposure within the Act.

Against this background, it is instructive to consider how the term was regarded at the enactment of Section 47 of the Factories Act 1937. The Chief Inspecting Officer of Factories wrote in his annual report for 1938,

“While Section 47 of the Factories Act 1937 may be thought somewhat ambiguous in its reference to a “substantial quantity of dust of any kind”, it is I consider, an admirable one in that it requires precautions even before it is possible to say specifically that the dust in question is harmful to a recognisable pathological extent. There can be no doubt that dust if inhaled is physiologically undesirable. Moreover, dust that is thought today to be harmless may, following research, be viewed in another light tomorrow. It is not many years ago when the dust of asbestos was regarded as innocuous, while today it is recognised as highly dangerous”.

This would imply that during the course of the enforcement of the Factories Act 1937, the terms “substantial” and “likely to be injurious” would have been interpreted by the Inspectorate in a synonymous way in relation to asbestos, so that very brief irregular exposures would not have been thought to be substantial within the meaning of the Act.

Against this background, as we have argued in PI Update ( link ) ,it would be reasonable to assume that there must be some degree of duration or repetition so as to create a substantial exposure under the Act.

In the present case, the issue would likely have been determined against the Defendants, even on Mr Stear’s evidence, by reference to the concept of potential exposure, which was developed by the Court of Appeal in Jeromson v Shell Tankers (UK) Limited [2001] EWCA Civ 101. The Claimant was only exposed for two to three years but if such exposure occurred at this level and at this frequency during a working lifetime, then a risk of asbestosis would have been apparent. On this basis, the exposure could be considered substantial at the time of occurrence, even if the Claimant himself would not be regarded as being foreseeably at risk given his short period of exposure.

The problem will become more acute if the exposures were much less frequent and of much shorter duration, even perhaps a one-off. In this context, it would appear difficult to argue that the exposure would ever have been considered substantial within the meaning of the 1937 Act. In this context, Smith v Portswood [2016] EWHC 939 (QB) probably represents the better approach as a matter of law. Given the lack of precision in measurement, substantial must to an extent be impressionistic. It follows that there will be cases either side of the borderline as evidenced by the conflicting decisions discussed in the article below.

Charles Feeny, Sammy Nanneh.

 

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Are standards maintained because at least in part, a threat of litigation, and are lessons learnt (as claimed) from litigated cases?

Patient safety is described by the World Health Organisation (WHO) as ‘the most important common issue in health care internationally’. It includes the prevention of errors and adverse effects to patients associated with health care. Currently, 1 in every 10 patients in Europe experience preventable harm or adverse events in hospital.

WHO statistics show that strategies to reduce the rate of adverse events in the European Union alone would lead to the prevention of more than 750,000 harm-inflicting medical errors per year, leading in turn to over 3.2 million fewer days of hospitalisation, 260,000 fewer incidents of permanent disability, and 95,000 fewer deaths per year.

The WHO/Europe 2008 Tallinn Charter: Health Systems for Health and Wealth, combined with the contents of Health 2020, provides guidance for the strengthening of people centred health systems for coordinated/ integrated health services. National health authorities are encouraged to consider policies that can support safer care and engage patients, families and health care staff working together to improve patient safety.

NHS England has identified that ‘Patient safety improvement is about tackling the causes of errors in care that can come from bad working environments or the lack of training and support for staff’, with ‘The Care Quality Commission’ (CQC) policing such, in the hospital environment.

In relation to its stance on patient safety, the NHS stipulates that,

‘Every patient in the NHS should expect the people and organisations caring for them to make their safety the first priority. They should expect to be treated in a clean environment, with a minimal risk of infection. The equipment used should be in good working order and used in the correct way. 

Medicines should be given on time and in the correct doses. Treatments should be appropriate for their condition, with procedures performed correctly and in a timely and effective way. 

Patients who are being cared for in hospitals, in their own home, or in nursing or care homes should receive care that minimises the risk of any further harm.

Care should be delivered in a co-ordinated way by competent professionals who work in an effective team. This includes communicating patients’ needs effectively.’

Included within the Simon Stevens’ 5 year programme vision for the NHS, there is an emphasis on a radical upgrade in prevention and public health, as well as providing patients with a far greater control of their own care.

This has been reflected already within the courts, with the decision seen by The         Supreme Court in Montgomery v Lanarkshire Health, whereby the parameters in relation to the issue of medical consent are now to include ‘any material risk’ to be disclosed by the doctor to the patient, prior to any treatment being administered. An ‘informed, intelligent patient’ being mostly, the duty of the treating doctor.

Whether clinical negligence litigation does have a role to play in patient safety, is not currently reflected by a decrease in number of claims or annual expenditure on such.

The NHS Litigation Authority Report and Accounts 2014/15 reports a 26% increase in the number of NHS claims over the last 9 years, with the proportion of NHS activity reported to the National Reporting and Learning System as an incident resulting in harm (moderate, severe or fatal), also increasing. The total clinical negligence expenditure including interim payments in 2014/15 was £1,169,586,958 compared with £1,192,538,084 in 2013/14. 11,497 new clinical negligence claims were received in 2014/15, an average of 958 new clinical claims every month, with a steady increase over the last 3 years.

The report goes on to highlight,

‘Whilst annual expenditure on clinical negligence claims saw a small reduction from 2013/14 to 2014/15, this does not account for future income streams agreed on high value claims resolved on a periodical payment basis within the year. In addition, the financial impact of the high number of claims received during 2013/14 is likely to be seen in 2015/16 and beyond, when those claims fall for settlement.

For the year 2014/15 orthopaedic surgery accounted for 14% of clinical negligence claims, with 12% relating to A&E, 11% general surgery, 10% obstetrics, 6% gynaecology, 5% general medicine, 3% radiology, 3% urology, 2% gastroenterology, 2% paediatrics and 32% aggregated specialities……

Our aim is to support the NHS to learn from things that go wrong, to help reduce harm, improve patient safety and prevent claims from happening in the future.’

At the end of last year, The Health Foundation published the report ‘Continuous improvement of patient safety, The case for change in the NHS’ by John Ilingworth. One observation of Illingworth stated,

‘The factors are systemic, cultural, contextual and human in nature, and elements of all of them were also identified in the inquiries into failings of care at Mid Staffordshire NHS Foundation Trust and, most recently, Morecambe Bay, some 46 years after the Ely Hospital Inquiry. While such factors are complex, multifaceted and difficult to eradicate, their persistence across the decades is cause for serious concern.’

Going on to conclude, Ilingworth states,

‘Given the tendency to focus on measuring individual aspects of harm in the NHS, rather than system measures of safety, it is inevitable that an answer to the question of whether the NHS is getting safer remains “curiously elusive”.’

The report ‘Patient Engagement in Patient Safety: A Framework for the NHS was published in response and provides guidance for patient inclusion, at every level.

Over the last decade, as the increase in litigation cases and expenditure on such have increased, so too, has the pressure on the treating doctor’s susceptibility to be litigated against. This has created the sometimes advantageous, and the sometimes not-so advantageous situation of ‘defensive medicine’, for the patient and doctor alike.

Ortashi reported in the article ‘The practice of defensive medicine among hospital doctors in the United Kingdom’

‘More than three quarters (78%) of doctors reported practicing one form or another of defensive medicine, and although this seems to be a high prevalence rate, in fact this is well below the prevalence of defensive medicine reported in United states of America (USA) and Japan where the prevalence of defensive medicine practice is reported to be above 90%’ ……

‘Though one in three consultants have a direct experience with litigation, however consultants are practicing less defensive medicine. We think this is expected finding, as consultants are taking the ultimate responsibility in the NHS, most of the claims are not successful so most of the consultants are used to deal with these claims on frequent base.

Over half of the sampled doctors in this study (59%) practice defensive medicine in the form of ordering un-necessary tests. Interestingly this is exactly the same percentage that Nicholas Summerton found in 1995 among general practitioners in the UK where 59% said they would request diagnostic tests to avoid complaints and litigation.

Conclusion

Defensive medicine practice is common among hospital doctors who responded to our survey. Ordering un-necessary tests is the commonest form of the defensive medicine identified in this study. Senior grade is significantly associated with less practice of defensive medicine. Further research is needed on the cost of defensive medicine on the NHS.’

In the article ‘Does defensive medicine protect doctors against malpractice claims’ published in the British Medical Journal last November, the authors concluded,

‘Defensive medicine refers to medical care performed primarily to reduce the risk of litigation. Positive defensive medicine occurs when doctors perform more tests or procedures than are necessary. Negative defensive medicine occurs when doctors avoid high risk procedures or refuse to care for high risk patients…… It’s too early to say, although there seems to be a link between higher healthcare spending and lower risk.’

The same conclusion was reached in a 2015 study from the University of Southern California, Harvard Medical School and Stanford University, whereby, it was found that, ‘higher-spending physicians across all specialties face fewer malpractice claims.’ The same study reported, ‘an average physician with a 40-year career will spend 4.25 years with an unresolved, open malpractice claim’.

The personal toll on the physician has been discussed in 2013 in the article ‘Defensive Medicine: A Bane to Healthcare’,

‘the personal finances or professional status of most physicians is not affected by a lawsuit as they have malpractice insurance. This notwithstanding, some physicians show symptoms of anxiety, depression, behaviour or personality changes due to reputational consequences that might undermine their professional career and respect.’

 The article goes on to conclude that,

‘practicing defensive medicine is not good for patients or physicians. The adverse effects of defensive medicine are not limited to the increased cost of healthcare, but also affect the overall quality of the healthcare system’.

In an attempt to avoid the limitations posed by defensive medicine, ‘The Medical Innovation Bill’, now renamed ‘Access to Medical Treatments (Innovation) Bill’ is  scheduled to be reintroduced to the House of Commons on the 6th December later this year. This Bill sets out the instances where a doctor is not negligent in departing from the existing range of accepted medical treatments provided they act responsibly. The doctor then has to show that they have considered a number of factors (risks, likely success rates, patient and peer views) and followed a process which is transparent, accountable, and allows full scope for considering all relevant matters. Thus widening the parameters of the standard Bolam test.

The following 8 reasons are stated to be why hospital negligence claims are on the rise in the UK:

1. Waiting Lists and Medieval Doctor Referrals
2. Overcrowding and Lack of Doctors
3. Glitches in Computers
4. Communication from Patient to Doctors
5. Jobs That Are Rushed
6. An Influx in Private Clinics
7. Overcrowding and Immigration Issues in Hospital Negligence
8. No Win No Fee Claims

To conclude, for purposes of my article, the expenditure paid out by the NHS in clinical litigation is clearly way too excessive to support a continued healthcare system operating in this way.

Although, best practice guidelines and best patient care management can be of assistance with improving patient safety, it remains on the medical individuals for implementation and ultimately carrying out the actual reality of making best practice happen.

However, it stands to reason that best practice guidelines can be extremely useful to the patient and care provider alike, and especially so, with the 8000 rare diseases currently identified.

The introduction of the ‘Access to Medical Treatments (Innovation) Bill’ most certainly has a very important role to play in the improvement of patient safety and reduction of clinical litigation. Let us hope that the newly formed government share the same view.

SOURCES:

http://www.euro.who.int/en/health-topics/Health-systems/patient-safety/patient-safety

http://www.euro.who.int/en/health-topics/health-policy/health-2020-the-european-policy-for-health-and-well-being/about-health-2020/priority-areas

http://www.nhs.uk/NHSEngland/thenhs/patient-safety/Pages/about-patient-safety.aspx

http://www.nhsla.com/AboutUs/Documents/Business%20plan%202016-17%20-%20Final%2022%20April%202016.pdf

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/454320/NHS_LA_Annual_Report_and_Accounts_2014-15.pdf

https://www.england.nhs.uk/wp-content/uploads/2014/10/5yfv-web.pdf

Montgomery v Lanarkshire Health Board (Supreme Court, 11/3/2015)

http://www.health.org.uk/sites/default/files/ContinuousImprovementPatientSafety.pdf

https://www.england.nhs.uk/signuptosafety/wp-content/uploads/sites/16/2016/05/pe-ps-framwrk-apr-16.pdf

http://bmcmedethics.biomedcentral.com/articles/10.1186/1472-6939-14-42

http://www.bmj.com/content/351/bmj.h5786

http://medicaleconomics.modernmedicine.com/medical-economics/news/defensive-medicine-versus-value-based-care?page=0,3

http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3728884/

http://medicalinnovationbill.co.uk/

http://www.medicalnegligenceassist.co.uk/hospital-negligence-claims-rise-uk