Navigating the global liability defence agenda
New liabilities, new investigations, but the same inflationary pressures
Like many other jurisdictions, there has been a huge shift towards remote and digital working. Even the court system, which had been slowly embracing technology, found itself fully embracing remote hearings, electronic bundles and e-filing. Against that backdrop, litigation in England and Wales has continued with claimants constantly striving to find new bases on which to make an injury claim. For example, in head injury cases we are increasingly seeing claims alleging the early onset of dementia. The causal link between head trauma and early-onset dementia is highly controversial but has led to increasing sports-related litigation, and most notably the high-profile World Rugby litigation, which Ben Appleton discusses below. The increased reliance on digital working has shown the importance of interrogating digital media as a routine part of injury cases. Amber Jenner covers the developing field of computer forensics below. Finally, the increasing cost of claims and particularly claimant’s costs has been an issue for many years. Lewis Thompson discusses the impact of a recent increase in the guideline hourly rates.
Kennedys acts in the defence of world rugby test cases brought by nine former international rugby union players. The players allege that the rugby governing bodies failed to take adequate steps to prevent permanent brain damage from concussive and sub-concussive injuries. Their lawyers are also said to be representing more than 100 other former rugby union players. The same lawyers act for former Rugby League players and this is likely to form part of a separate class action. It is further envisaged that litigation will shortly be commenced in the UK against football clubs and governing bodies.
Sport-related concussion is a global issue for the sports world. Kennedys has been at the forefront of similar cases in the US, where we have been appointed by insurers of every major sport in connection with the defence, coverage or monitoring of head trauma claims.
The causal link between head trauma and early-onset dementia is highly controversial. The science is ever changing but there remains an absence of agreed medical opinion. Consequently, the defence of these actions requires a complex claims handling process that brings together expertise in the following areas: policy coverage issues, e-disclosure, media strategy, group litigation orders and rehabilitation strategy.
The rapid expansion of sports-related litigation in some parts of the world has created significant legal and financial exposure for the insurance industry. Insurers across the globe will need to stay vigilant to this body of claim and take steps to effectively evaluate potential exposure.
Whilst surveillance and social media are commonly used in injury cases, they are not the only useful tool for investigating a claimant’s pleaded case and assessing the genuine elements. There is a wealth of data generated by electronic devices or apps that the CPR permits disclosure of, but in reality is often overlooked.
Electronic data stored on items such as computers, mobile phones, fitness trackers and apps can all provide useful information to either support or discredit a claimant’s case. For example, access to a self-employed claimant’s work email account can show how much they have actually been able to progress their business, whilst a video doorbell might show how frequently an alleged social recluse leaves the house. Equally, a Sat Nav or Fitbit may assist in more accurately calculating the speed of a cyclist involved in a collision whereas metadata could be used to prove that documents supporting an allegation are fraudulent.
Where surveillance may show limited contradictions to the claimant’s evidence over a limited number of days, computer forensics can often show a fuller picture over a prolonged period making it harder for a claimant to argue against. As the world becomes more technologically dependent, the more widely available such useful data becomes to defendants as it becomes harder for people to not leave an electronic trail for the most basic of actions. Using such data can strengthen allegations of fraudulent or exaggerated cases, assist in resolving liability and may ultimately lead to significant savings on quantum.
The level of hourly rates sought by claimant solicitors and recoverable upon detailed assessment continues to cause concern as one of the key inflationary pressures on costs claims faced by insurers.
Following a review in 2010, the guideline rates set by the court for summary assessment had remained static for 11 years, prompting increasingly loud complaints by solicitors that they should be increased. A consultation launched in 2014 was abandoned after the inquiry found that there was a lack of available data. Pressure continued to build however, and a number of judicial decisions over the last two years emphasised that the old hourly rates were no longer of significant relevance, in particular on detailed assessment. Prompted by concerns raised by the courts, the Civil Justice Committee undertook a review during late 2020 and published its consultation in January 2021. The final report was published on 30 July 2021, and recommended substantial increases to the hourly rates, with some grades of fee earner and location seeing upward revisions by up to 27%.
The recommendations were adopted in full by the Lord Chancellor, with the new hourly rates applicable from 1 October 2021. A number of questions and concerns remain, both with regards to the methodology adopted for the consultation, and the impact of the increases. The review focused primarily on the hourly rates allowed on assessment by the court, rather than undertaking any investigation as to the actual costs faced by solicitors, or the impact of remote working during the pandemic on location and overheads.
Whilst the guidance is clear that the new rates are not to be applied retrospectively, it is anticipated that claimants will seek to push the boundaries further with regards to historical claims. In addition, the exposure to costs for insurers on the majority of lower value claims not subject to fixed costs will increase by approximately 20% as solicitors revise their client retainers to include reference to the new rates. On higher value cases, it is anticipated that the key players in the claims industry will continue to push for rates higher than the new guidelines, and the courts’ attitude to such inflationary tactics remains to be seen.