06/06/2017
A round up of recent court decisions raising issues relating to Roberts v Johnstone in negative discount rates; liability for claims arising from the Setanta liquidation; the repayment of Stage 1 fixed costs; highway authority duty of care where a positive act taken; tour operator liability in contaminated food claims and local authority duty of care towards supervision of school pupils.
The accommodation conundrum: Roberts v Johnstone applies in negative discount rates
JR v Sheffield Teaching Hospitals NHS Trust [25.05.17]
The claimant had significant accommodation needs arising from severe spastic cerebral palsy. The claim for alternative accommodation was not in issue. The question was whether and to what extent there was a loss. The claimant argued that the 2.5% used in Roberts v Johnstone calculations was arbitrary. The trial judge disagreed. He noted that the Court of Appeal had “expressly approved the proposition that damages for accommodation costs should not represent the full capital value of the asset since that would remain intact at the claimant’s death and thereby represent a windfall to the claimant’s estate”.
Accordingly, the judge held the correct approach was to consider the loss by reference to the cost of the lost income. Roberts bound him and given the negative discount rate, he had to consider the return on a risk-free investment as representing the claimant’s loss. Therefore, on the evidence (and discount rates) there was no loss.
Related item: Impact of Lord Chancellor’s dramatic discount rate reduction
Contact: Mark Burton
Setanta liquidation: Irish Supreme Court finds in favour of MIBI
The Law Society of Ireland v The Motor Insurers’ Bureau of Ireland [25.05.17]
In a decision which will be greatly welcomed by Irish motor insurers, Ireland’s Supreme Court has overturned the Court of Appeal’s decision – confirming the state funded Insurance Compensation Fund rather than the Motor Insurers’ Bureau of Ireland will now have to cover the costs of claims arising from the collapse of Setanta Insurance Company Limited. The total costs of the claims are estimated at €90 million.
Full case review: Setanta liquidation: Irish Supreme Court finds in favour of MIBI
Contact: Daniel Scanlon
‘£400 club’: Court of Appeal rejects “theoretical risk of abuse”
J C and A Solicitors Ltd v Andeen Iqbal & Another [16.05.17]
The appeal arose out of three materially identical road traffic accident (RTA) claims, which were brought under the RTA Protocol. In each case, the defendant insurer admitted liability and paid Stage 1 fixed costs. None of the claimants advanced their claim and the insurers sought recovery of the costs. The judge at first instance accepted the Protocol gives rise to an entitlement to repayment in such circumstances. The Court of Appeal disagreed. It held the intention of those who drafted the Protocol is clear – the claimant should receive the fixed sum at the end of each stage regardless of what, if anything, happens at a later stage.
Contact: Ian Davies
Highway authority: no duty of care if taking a positive act does not create a danger
Robinson v (1) North Yorkshire County Council (2) Richmondshire County Council [30.01.17]
The claimant suffered catastrophic spinal injuries following a day out at Doncaster Races for his brother’s stag party after falling into the road below him when the railing he was holding on to came to an end.
Neither the first defendant (the highway authority) nor the second defendant (the local authority owner of the adjoining land) owed a duty of care to the clamant under the Occupiers Liability Act 1957 and, therefore, the claimant had to rely on the common law duty of negligence. The appropriate test was whether the first defendant created a danger by erecting the railing in the manner in which it did. It was held that the railing itself did not create a danger and even if there was a danger, there was no negligence on the part of the first defendant. Further, there were no grounds for imposing a duty of care on the second defendant.
If a primary breach of duty had been found, as the claimant’s alcohol levels were just under four times the legal driving limit, the judge held that an appropriate degree of contributory negligence would have been 85%.
Contact: Charles Martin
Package travel holidays: tour operator liability for contaminated food
Wood v Wood v TUI Travel Plc t/a First Choice [16.01.17]
The claimants suffered gastroenteritis during an all-inclusive holiday in the Dominican Republic in 2011 contracted with Tui Travel Plc (trading as First Choice). All parties accepted that the illness was caused by eating or drinking contaminated fare at the hotel. The claimants argued that a contract could be both a contract for the supply of goods and supply of services at the same time. The judge accepted the provision of food and drink was the supply of goods - even though most of what First Choice contracted to provide were services. The Court of Appeal agreed: the claimants could rely on the implied term as to ‘satisfactory quality’ under the relevant legislation.
Full case review: Clarification of tour operator liability for sickness claim
Contact: Claire Mulligan
Local authority duty of care: adequate supervision of pupils
Dyer v East Sussex County Council [19.12.16]
The claimant pupil, aged 14 at the time, suffered a significant head injury when struck by a metal gate in the school playground during lunch break. He sought damages for severe personal injuries and claimed the local authority was in breach of its common law duty of care owed to visitors under the Occupiers' Liability Act 1957. The local authority argued successfully that the claimant was not a visitor and that the duty under the 1957 Act did not arise. With regard to the common law duty of care, the court held the risk of such an accident was remote and there had been no breach of duty to ensure that the gate was locked at all times. The court also held the supervision was adequate in the circumstances. There was a balance to be struck between intrusive over-supervision and discipline and safety. The accident was a combination of unexpected events. Even if there had been increased supervision, it would not have prevented the accident.
Contact: Charles Martin
