Occupational Disease Brief: latest decisions and insights October 2021

A roundup of recent court decisions and insights raising issues relating to qualified one-way costs shifting, dependency claims under the Fatal Accidents Act 1976, the importance of parties proving and not assuming exposure to asbestos, and the government’s announcement regarding fixed recoverable costs.

Landmark QOCS ruling – disappointing news for defendants

Ho (Respondent) v Adelekun (Appellant) [06.10.21]

The Supreme Court has determined that defendants, in cases to which qualified one-way costs shifting (QOCS) apply, are not entitled to seek set-off of their own entitlement to costs against claimant’s costs entitlement (a “costs against costs set off”) where the defendant’s costs exceed the level of damages recovered by the claimant.

This is a disappointing judgment for insurers who may, in some cases, see the value of costs orders made in their favour depreciated to the level of damages recovered by the claimant. This decision will lead, in many cases, to alterations to litigation strategy given the more limited opportunity to recover costs. The judgment itself raises further points as to the potential approaches available when determining costs, and the same will require case by case consideration.

Contact: Lewis Thompson

What qualifies as a dependency?

Steve Hill Ltd v Witham [26.08.21]

Mr Hill, the deceased, was the primary carer of two foster children, which allowed his wife/the claimant to work as the breadwinner for the family. Following Mr Hill’s death, the claimant quit her job and took over the full-time care of their foster children.

The Court of Appeal held that it was the claimant who had lost the benefit of the service which the deceased provided in caring for the children and which allowed her to work, rather than the foster children, who are not dependants under Section 1(3) of the Fatal Accidents Act 1976.

The Court of Appeal also held that where earnings have been lost, the commercial rate of care may be appropriate. Of note is that a commercial rate was allowed despite no professional package being in place by the time of trial.

Further, the court allowed new evidence showing that the foster children were no longer in the care of the claimant and that the matter be remitted to the trial judge to allow for a re-evaluation of the claimant's claim regarding the lost benefit.

Various articles have been published suggesting the decision as akin to a landmark case on the application of commercial care rates and as a route to widening the scope of applicable dependants. However, the market must bear in mind that because of the highly unusual facts of this case, the majority of fatal accident cases are distinguishable.

Contacts: Stephen Foster and Thomas Panter

If you inherit the goose can you claim you are deprived of the eggs?

Paramount Shopfitting Limited v Rix [28.07.21]

Mr Rix (the deceased) died from mesothelioma aged 60 following exposure to asbestos early in his career. Later in his career, the deceased spent his working life building up a successful business.

The trial judge found that the claimant, despite being a director, drawing a salary and receiving a dividend, was a dependant on the deceased under the Fatal Accidents Act 1976.

The High Court considered the following:

1 Whether the claimant had a dependency; and

2 If there was indeed a dependency, how it was to be calculated - either by reference to the share of the annual income received from the business had the deceased survived (Basis 1) or by reference to the annual value of Mr Rix’s services to the business by reference to the cost of a replacement Managing Director (Basis 2).

The High Court imposed a practical solution by seeking to distinguish the income derived from capital and that brought about by the deceased’s labour. This is generally consistent with the earlier Court of Appeal case of Head v The Culver Heating Co Limited [2021].

However, Head may well be revisited in the Supreme Court where the passive investment/deceased’s labour dichotomy is likely to be the epicentre of any further appeal. Pending any further appeal in Head, future claims will require careful consideration of the factual case presented by any claimant to establish the workings of the business. This is likely to be a challenge for those investigating similar claims and will involve more detailed investigations of the business affairs than has previously been the case.

Contact: Liam Bedford

Related items:

Fatal accident claims: quantifying damages for dependants

Chouza v Martins & Ors [22.06.21]

The High Court has offered useful guidance on a number of principles in a fatal accident claim in terms of how to assess pain, suffering and loss of amenity (PSLA) where death was almost instantaneous, how to calculate the dependency ratio and who should be considered a dependant.

The deceased, a passenger in a minibus, was fatally injured as a result of a road traffic accident in 2015 during which the minibus collided with a lorry being driven on the wrong side of the road. The deceased died almost instantaneously following the physical injury, but had warning that a severe accident was about to occur. The deceased left behind a wife and four children; three sons aged 29, 24 and 20 and a daughter aged 11.

The key points arising from this case are as follows:

1 PSLA in a fatal claim can include damages for ‘fear and anguish’ where there is associated pain arising from an injury.

2 The court is entitled to depart from the dependency ratios set out in Harris v Empress Motors [1984] and apply different percentages based on anecdotal evidence from the family alone.

3 Adult children cannot bring claims for loss of earnings as a result of a parent’s death and will not be dependants for the purposes of the Fatal Accidents Act 1976 unless they were financially dependent on the deceased prior to the accident.

Contacts: Charles Martin and Tracey Richmond

Exposure to asbestos cannot be assumed – it must be proven

R (Wandsworth Borough Council) v HM Senior Coroner for Inner West London [31.03.21]

Mrs Johns died from a mesothelioma in 2018 having lived in her council flat from 1996 which was known to contain asbestos. The High Court was asked to consider whether the Senior Coroner was entitled to conclude that it was probable, as opposed to merely possible, that Mrs Johns had been exposed to asbestos.

The causation test applied in civil claims as set out in the case of Fairchild v Glenhaven Funeral Services Limited and others [2003] did not apply. The court therefore considered if the relevant event made a material contribution to the death of Mrs Johns. In applying this test, the court overturned the coroner’s verdict.

The appeal serves as a further example that exposure cannot be assumed and must be proven. Such an approach is in keeping with the comments of Lord Roger in Sienkiewicz v Greif UK (Ltd) [2011] and with Lugay v London Borough of Hammersmith and Fulham [2017]. In Lugay, the court declined to find an exposure to quantities of asbestos above background levels when asbestos was present in a council house. It therefore follows that practitioners should closely assess the evidence to ensure that exposure can be proven and should not make assumptions based on the mere presence of asbestos.

Contact: Liam Bedford

Ministry of Justice confirms intention to extend fixed recoverable costs

On 28 March 2019, the government launched a consultation on the extension of fixed recoverable costs (FRCs) in cases worth up to £100,000. The consultation sought views on a number of recommendations made by Sir Rupert Jackson in his ‘Review of Civil Litigation Costs: Supplemental Report Fixed Recoverable Costs’ published in July 2017, with the government aiming to take forward most of his recommendations.

In a long-awaited update, the Ministry of Justice announced on 6 September 2021 that the proposals to extend FRCs will indeed be introduced.

FRCs will be introduced in the fast track for most civil cases worth up to £25,000, with four bands of complexity. The fast track will be extended (rather than the creation of a new separate intermediate track as originally thought) to include ‘intermediate’ cases valued between £25,000 and £100,000, with the four bands proposed by Lord Justice Jackson.

Cases involving mesothelioma/asbestos, clinical negligence, actions against the police, child sexual abuse, and intellectual property will be excluded from the extended fast track at this stage.

Noise-induced hearing loss (NIHL) claims within the fast track will be subject to a distinct process and FRC. This was recommended by both Sir Rupert Jackson in his 2017 report and the Civil Justice Council’s working group.

The government has confirmed that “certain mandatory actions to be taken by both claimants and defendants in letters of claim and response, as well as the proposed accompaniments to letters of claim”, will apply. Further, in terms of introducing standard directions, the government confirmed that this will be a matter for an industry working group “with consideration being given to examples adopted by district judges in the county court as an initial starting point”.

This is welcome news for insurers. Greater clarity from the claimant as to the claim being pursued allows a defendant an earlier decision on liability. Furthermore, we anticipate a saving of at least 50% on the claimant’s current NIHL costs.

Contact: Cameron Clark

Read other items in Occupational Disease Brief - October 2021