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Awarding Aggravated Damages in Sexual Abuse Claims - Helen Nugent, No 18 Chambers

22/10/14. With the ongoing process of Operation Yewtree and the decision of the Yorkshire Police last month to commission an independent investigation into its handling of the Rotherham child exploitation scandal, reports of historic sexual abuse have a continued and wide reaching presence in the national headlines.

From a civil liability perspective, the issue of compensation for the victims of sexual abuse is a difficult and very sensitive one. No sum of money can put right the wrong; and reducing the injury element of the claim to a figure can seem an incredibly cold and artificial task.

The current guidelines for psychological harm arising from sexual (or physical) abuse are provided at Chapter 4A of the Judicial College Guidelines (12th Edition); where specific reference is made to the aggravating features of false imprisonment and breach of trust. In determining the relevant bracket of damages, other aggravating factors can include cases where the damaging effect has been longstanding; where the injury has gone untreated or even been denied for a sustained period of time. The provisions also set out that aggravated damages may be appropriate.

In many abuse cases, the injury to the individual’s feelings; the indignity, mental suffering, disgrace and humiliation is such that a separate sum is awarded to the claimant, over and above the conventional award for pain, suffering and loss of amenity. In W v Meah [1986] 1 All ER 935 Woolf J. outlined that the award of aggravated damages should be moderate; compensation for the personal injury being the primary purpose of General Damages.

Separate awards were made to the four young, female victims in Dulghieru [2009] EWHC 225 QB, who were induced by fraud to travel from Moldova to the UK, where they were falsely imprisoned and sexually abused. They suffered significant psychological harm as a consequence of being trafficked; and they were later diagnosed with chronic Post Traumatic Stress Disorder. In the Court’s assessment of PSLA, there was no express identification of the many obvious aggravating features of the case; these were considered specifically in relation to the level of aggravated damages, so as to avoid any duplicity or double recovery. Overall, the awards ranged from £125,000.00 to £82,000.00 (updated to £146,250.00 and £95,940.00).

Three years later in GLB v TH [2012] EWHC 3904 QB an award for aggravated damages was made by the Court in the sum of £15,000.00 (updated to £15,450.00; and in addition to PSLA at £67,500.00; updated to: £69,010.00); for a claimant who had suffered abuse on the part of her paternal grandfather. Plainly, there had been a breach of trust in addition to what the Court described as emotional upheaval; and with the defendant’s persistence in denying liability, the claimant had to face the ordeal of giving live evidence at trial.

The issue of aggravated damages arose more recently, in JXL & SXC v Winston Britton [2014] EWHC 2571 QB the claimants contended for separate awards to reflect the injury to their feelings, the humiliation, loss of pride, feelings of chronic anger and resentment. The claimants were sisters who were assaulted at a young age, whilst in the defendant’s care. Both sisters suffered from permanent Post Traumatic Stress Disorder; the younger sister was diagnosed with an Emotionally Unstable Personality Disorder and she had also become substance dependent.

As with Dulghieru, the aggravating features (the abuse of trust; and the significant delay of over 20 years in the matter being properly investigated and Police action taken) were more relevant at the aggravated damages stage. The Court then had to assess the total of the final award: to ensure that it was proportionate. At trial, the separate sums of £15,000.00 and £25,000.00 were awarded in addition to General Damages at £32,5000.00 and £40,000.00 respectively.

Whilst the awards themselves are modest, the fact that a separate award has been made in these cases is important recognition of the injury to a victim’s feelings, beyond the psychological harm already accounted for in the guidelines. Against a backdrop of so many historic abuse claims, it will be interesting to see how the Courts continue to approach the assessment of this key aspect of a claimant’s claim.

Helen Nugent
No 18 Chambers, Southampton

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Vnuk: End of the Road? - Nicholas Bevan, Solicitor, Mediator, Consultant and Trainer

20/10/14. On 4th September the Court of Justice of the European Union (CJEU) delivered what is arguably its most important ruling to date on the scope of compulsory third party motor insurance (TPMI). The decision in Damijan Vnuk v Zavarovalnica Triglav d.d., [2014] CJEU Case C-162/13 is a ‘game-changer’, in the sense that it is likely to precipitate significant legislative reform across the European Union, including the UK. It is also something of a ‘name-changer’, at least for those of us who specialise in ‘RTA work’: because that term has become something of a misnomer. The Vnuk ruling confirms the scope of TPMI regime is wider than is signified by terms like ‘road accident’.

False assumptions

From a claimant practitioner’s perspective, one reassuring feature of motor loss and injury work is the knowledge that there is usually a motor insurer somewhere in the background and, ultimately, that it will satisfy any award or settlement; failing that, the Motor Insurers Bureau (MIB) will usually step in. Consequently, in the vast majority of motor loss and injury claims, our main efforts are usually directed to establishing liability and proving the quantum of our client’s loss and injury. To this extent at least, the legal aspects of TPMI is often perceived to be something of a placid backwater, one that has been left relatively undisturbed by the turbulence inflicted by that tide of European law that Lord Denning so vividly portrayed in Bulmer (HP) Ltd v J Bollinger SA [1974] Ch 401.

It is well established that European law does not concern itself with civil or criminal liability arising out of the use of motor vehicles, here our indigenous law reigns more or less supreme1 as does the contractual autonomy of insurers and their policyholders to define the terms of cover under a TPMI. It is also true that when it comes to TPMI the contractual and statutory liability of motor insurers has been regulated by a succession of Road Traffic Acts over the past 84 years and even that relative latecomer, the MIB, has been with us for 68 years. This statutory and extra-statutory provision has attracted its own coterie of case authorities, much of it well settled and seemingly unaffected by European law principles.

Unfortunately appearances can be very deceptive, particularly in the context of TPMI. In Churchill Insurance Company Limited v Benjamin Wilkinson and Tracy Evans v Equity and Secretary of State for Transport [2012] EWCA Civ 11662 the Court of Appeal was obliged to apply a European law consistent approach to interpreting section 151(8) of the Road Traffic Act 1988 (the I988 Act). The relevant European law is the directives on motor insurance that Part VI of the 1988 Act is supposed to implement. There are six of these directives3 but mercifully the sixth is a consolidating instrument. Even so, it boasts a rather cumbrous title: Council Directive 2009/103/EC of the European Parliament and of the Council of 16 September 2009 relating to insurance against civil liability in respect of the use of motor vehicles. We will content ourselves here with referring to the latter directive as ‘the Sixth Directive’. When the Court of Appeal compared s151(8) of the 1988 Act with the legislative objectives set out in these directives, it was found wanting. In short, it found it necessary to find a means of patching and mending the gap in our national law provision for safeguarding the interests of motor accident victims so that it complied with the minimum standards required under European law. It achieved this by adding an extensive passage of ‘notional’ wording to the offending subsection that applies in a rather unusual scenario4. Hitherto, the way the 1988 Act operated was to confer TPMI cover to the claimant under s151(5) of the 1988 Act only to remove it under s151(8)5. The Court of Appeal inserted new ‘notional’ wording that conferred a qualified entitlement to indemnity on policyholders foolhardy enough to allow themselves to be driven in their own car by an uninsured driver. The ruling produces what is in effect a judicially contrived ‘statutory’ annotation to the 1988 Act. All said and done, this was a relatively discrete judicial intervention but it confirms an important point of principle: namely that our national law provision in this area must be interpreted and applied consistently with the European law it is supposed to implement6.

The approach taken by the Court of Appeal in Delaney v Pickett [2011] EWCA Civ 1532 serves as a counterpoint to Churchill: it is an object lesson on the unfortunate consequences of failing to apply a European law consistent interpretation. This claimant was also a passenger but the car in which he was riding was subsequently deemed to be uninsured because its insurer managed to obtain a declaration under s152 of the 1988 Act that the policy was void for non disclosure of material facts. The insurer, acting as an agent of the MIB, later refused to pay out on the ground that clause 6.1(e)(iii) of the Uninsured Drivers Agreement 1999 excludes any liability to compensate a passenger who knows that the vehicle is being used in the furtherance of a crime. It was alleged that the driver and passenger were en route to sell their supply of cannabis. Unfortunately the Court of Appeal blithely applied the plain and natural meaning of this exclusion of liability without troubling to check whether this was permitted under the same European directives on motor insurance. In consequence, it upheld the first instance rejection of the claim. It was this author’s strong view at the time7 that had the Court applied a European law consistent interpretation then it would have realised this particular exclusion of liability was blatantly unlawful. Unfortunately the European law issues were neither appreciated nor raised by those concerned until far too late and so an appeal to the Supreme Court was refused.

Fortunately for Mr Delaney, this was not the end of the road. It took an able team of human rights specialists to set matters to rights in Delaney v Secretary of State for Transport [2014] EWHC 1785 (QB). Philip Moser QC and Eric Metcalf of Monkton Chambers succeeded in obtaining a Francovich award against the minister on the ground that clause 6.1(e)(iii) of 1999 Agreement was unlawful. They achieved this by addressing the European law issues that had been ignored in the Court of Appeal. The minister is unrepentant and has decided to appeal this decision8. Although it would be wrong to offer any views on how the Court of Appeal will approach this case, or to speculate on its likely outcome, it is fair to observe that Mr Justice Jay’s first instance finding is supported by a series of consistent and directly relevant CJEU rulings that preclude member states from introducing any exclusion not expressly sanctioned by European law9. The reader will be aware that the CJEU is the final arbiter on issues such as the interpretation of a directive10 and so may draw his or her own conclusions.

Churchill and Delaney both demonstrate that the European directives on motor insurance can have a decisive influence on whether a claimant is entitled to compensatory protection, regardless of whether this is actually conferred under our national law provision. This sets the scene for what is probably the most significant and far reaching CJEU ruling to date on the compulsory third party insurance requirement. Damijan Vnuk v Zavarovalnica Triglav d.d., [2014] CJEU (Case C-162/13) is a case one that no practitioner in this field can afford to ignore.


It is important to emphasise from the start that the Vnuk ruling is no aberration. It is better understood as a logical development emanating from a trend of CJEU rulings that date back to its seminal judgment in Bernaldez (C-129/94) [1996] E.C.R. I-1829. Although Bernaldez was did not consider the geographic or technical scope of the TPMI cover required under European law, its evocation of the legislative objective of the European directives on motor insurance, namely of protecting motor accident victims and the comprehensive nature of that policy aim, lies at the heart of any proper understanding of European and national law provision in this area.

In Bernaldez the CJEU ruled that a Spanish law that absolved a motor insurer from liability to compensate the victims of intoxicated drivers was unlawful because (i) the aim of the directives, is to protect third party victims, and (ii ) any derogation from that protection must be expressly sanctioned by the relevant directives to be valid. It went on to rule: ’...that statutory provisions or contractual clauses in an insurance policy may not be relied on as against passengers and third parties who are the victims of an accident.’11 This ratio and the protective principle that underscores it has been extensively quoted with approval and applied in a number of later CJEU rulings12.

1996 can be viewed as a watershed moment, when the UK Government appears to have made a conscious decision not to fully implement these directives. It is worth noting that UK Government intervened in Bernaldez, and so had firsthand knowledge of the ruling and presumably its implications. Unfortunately, far from undertaking a comprehensive comparative law review of its own national law provision it determined on introducing a raft of new (and clearly unlawful) limitations and exclusions of liability in the Uninsured Drivers Agreement 1999.

It takes no large leap of logic to apply the comprehensive nature of what in this article is dubbed ‘the protective principle’ (used in the context of permitted exclusions of liability) and then to extend its application to the general scope of the TPMI cover required. Permitted restrictions to liability and the scope of that liability are to a large degree two sides of the same coin: between them, they define the extent of cover.

Mr Vnuk: Up a ladder in a farm yard

The case facts in Vnuk appear, at first glance, to be a most unpromising candidate for an ‘RTA’ or motor insurance liability claim. The accident scene has a decidedly rustic setting as well as an occupational injury theme because Mr Vnuk was working as a farmhand, loading bales of hay into the loft of a barn using a ladder that was in turn standing in a farmyard. Unfortunately a reversing tractor propelled its trailer into the ladder, knocking Mr Vnuk off and injuring him in the process. The accident occurred on private land in rural Slovenia in the dog days of the 2007 harvest13.

Initial setbacks

The first and second instance decisions in Slovenia dismissed Mr Vnuk’s claim against the motor insurers of the tractor but his lawyers persevered. It wsa the Slovenian appeal court, who despite having evident misgivings, finally referred the case to the CJEU for a preliminary ruling; just to be certain sure. It asked the CJEU to determine whetherthe concept of ‘the use of vehicles’ within the meaning of Article 3(1) of [the First Directive14] should be interpreted as not extending to these case facts on the basis that the incident did not occur in the context of a road traffic accident.

Differences of emphasis

A number of member states intervened, including the UK, and they argued that the compulsory insurance requirement should not apply. The European Commission and the Advocate General thought it should: in order to uphold the wider interest of ensuring a consistent approach to implementing the directives throughout the European Union.

It is worth noting that there are a number the subtle variations of emphasis within the terminology employed in the different language editions of these directives on motor insurance and that this has lead to discrepancies in the way in which individual member states have implemented the compulsory TPMI requirement. For example, whilst the English version of the First Directive refers to the ‘use of vehicles’, the French version refers to the 'circulation' of vehicles, the latter phrase inviting an inference of use confined to some kind of traffic scenario. The Court expressed the importance of adopting a consistent approach and it noted that ‘where there is divergence between the different language versions of a European Union text, the provision in question must be interpreted by reference to the general scheme and purpose of the rules’15.

A primary objective

The Court then made an important observation on the policy that underlies these directives. It stated, for the first time, that the objective of protecting accident victims is of equal importance to the aim of freeing the movement of persons and vehicles with a view to achieving the internal market. Hitherto, the social aim of providing compensatory protection was widely considered to be incidental or subordinated to the wider objective of encouraging free movement within the EC16.

The newly confirmed importance of this protective principle affects not only how one should interpret the motor insurance directives but also the prospects of securing Francovich damages where an individual has sustained loss caused by a member state’s failure to properly implement a directive17.

Court of Justice ruling

As to Mr Vnuk's claim, the Court ruled that the accident circumstances were capable of falling within the scope of insurance cover required under the directives. It referred Mr Vnuk's case back to the Slovenian courts to make the necessary factual findings.

Vehicles caught by the TPMI requirement

On the specific issue as to whether a reversing trailer propelled by a tractor was required to be covered by the article 3 insurance requirement affecting the ‘use of vehicles’, it ruled that it was.

Motor vehicle use covers ‘any use of a vehicle that is consistent with the normal function of that vehicle’18. Compare that with the much narrower definition to be found in section 185 of the 1988 Act19 and sections 143 and 145 that impose the duty to insure and prescribe the extent of the TPMI cover.

When one considers the definition of ‘vehicle’ provided in what is now article 1.1 of the sixth consolidating directive on motor insurance (2009/103/EC ) in the light of the new interpretation given in Vnuk, it is clear that some vehicles which are currently considered under our national law to be exempted20 from the third party insurance requirement21 are in fact now capable of falling within the duty to insure under a European law consistent reinterpretation of our national law.

It should be noted that article 5.2 of the sixth directive provides member states with an escape mechanism that allows them to devise a list of vehicle types that are to be derogated from the insurance requirement. However these must also be covered by the compensatory guarantee scheme under what is now article 10 that prescribes the MIB’s responsibilities for compensating victims of uninsured and unidentified vehicles. Hitherto, the Department for Transport (DfT) has considered it unnecessary to compile such a list. The minister will now be forced to take prompt steps not only devise a list of exempted motor vehicles. He will also need to notify the European Commission, incept regulatory provision for these vehicles to be ‘plated’ and to ensure that the MIB Uninsured Drivers Agreement encompasses claims arising out of their use. These are all preconditions of the power to derogate under article 5.2.

The Court also ruled that ‘the fact that a tractor, possibly with a trailer attached, may, in certain circumstances, by used as an agricultural machine has no effect on the finding that such a vehicle corresponds to the concept of 'vehicle' in Article 1(1) of the First Directive.’ The Vnuk ruling opens the way to arguments that third party cover extends to the use of a stationary tractor or other motor vehicle generating electricity or powering machinery, provided this is a ‘normal use’. Compare that with the much narrower definition within section 185 below.

One crumb of good news for motor insurers is that because the motor insurers liability for derogated vehicles is capable of being subordinated22 to other existing cover, such as under a household, employers or public liability policies, then the financial impact of the Vnuk ruling can be mitigated.

All accident locations are caught by the TPMI requirement

Although the Court’s characteristically elliptical judgment does not expressly rule that the geographic scope of the duty to insure extends to private property, such as the farm yard where Mr Vnuk was injured, this is the inescapable conclusion to be drawn from the Court’s judgment23. It is inherent in the broader concept that any kind of motor vehicle use, consistent with its normal function, must be covered by insurance.

Flawed UK statutory and extra statutory provision

It will be readily appreciated that sections 143 and 145 of the Road Traffic Act 1988 restrict the duty to take out third party motor insurance and the scope of cover to be provided by authorised motor insurers in the United Kingdom to the ‘use of a motor vehicle on a road or other public place’. These restrictions conflict with the wider scope required by the motor insurance directives.

These same restrictions in the scope of the duty to insure also impact on the Uninsured Drivers Agreement 1999 or the Untraced Drivers Agreement 2003. This is because these agreements inherit the same defective restrictions in geographic and technical scope that are grafted on directly from the Road Traffic Act 1988.

Closing the gaps in protection

Under a conventional naive UK centric interpretation of UK law24 all those injured by motor vehicles in private lanes and car parks, gated communities and private caravan sites are (wrongly) excluded from the compensatory guarantee provided under the various schemes for which the Secretary of State for Transport is also responsible. The same applies to anyone injured on a public road by a motorised vehicle not intended or adapted for road use.

The UK’s current national law provision is not only unlawful but it is also lacks common sense. When the life-time compensatory needs of a chronically injured victim can amount to many millions of pounds, what good is served by exposing these motor accident victims to these arbitrary restrictions? One way or another, the tax payer always funds the bill, the only uncertainty being the extent to which motor insurers are able to evade their proper responsibilities in what is a highly regulated and artificial market.

Failings at the Department for Transport

Early last year, the Secretary of State for Transport was warned (in the responses to his own consultation on the MIB Agreements) that the UK statutory and extra-statutory provision for road accident victims contained a large number of defects that breached the minimum standards of protection required under EU law. This included a detailed explanation as to why the geographic and technical scope of the insurance obligation within the Road Traffic Act 1988 was too narrowly confined25. The minister chose to do nothing. The Vnuk ruling confirms that these warnings were correct.

The minister's inaction is unacceptable not only for those unfortunate enough to be motor accident victims but also for the motor insurers that underwrite the cost of compensating these victims. The minister needs to discharge his constitutional duty to implement European law and this involves articulating a clear and Community law compliant policy that will confer proper compensatory safeguards and enable insurers to revise the terms of their policies and to set appropriate reserves. The Vnuk ruling will compel the minister to act and we can expect urgent revisions to Part VI of the 1988 Act early in 2015.

Vnuk’s wider implications

The Vnuk judgment confirms that the use of a farm tractor as an article of farm machinery26, on private land27, is capable of falling within the scope of the compulsory third party insurance requirement. In explaining its reasoning, the CJEU has also elevated the European law protective principle28 to an equal status with the objective of ensuring the freedom of movement of vehicles and people within the EU. The judgment also explains how the second and third directives on motor insurance served to progressively restrict the discretion enjoyed by member states to implement their own standards of protection in this area.

The promotion of the protective principle in the Vnuk decision goes much further than justifying and explaining the extensive geographic and technical scope of the third party insurance obligation. It is a policy aim that is justified in its own right.

It will be recalled from the above that the Vnuk case was preceded by a consistent line of CJEU rulings29 that have gradually restricted the freedom of member states to carve out their own exceptions to or restrictions in TPMI cover extended to passengers under these directives. These decisions were also based on a purposive or teleological approach that seeks to give effect to the same European law protective principle30.

In the operative and concluding part of its judgment in Vnuk, the CJEU ruled:

Article 3(1) of Council Directive 72/166/EEC of 24 April 1972 on the approximation of the laws of Member States relating to insurance against civil liability in respect of the use of motor vehicles, and to the enforcement of the obligation to insure against such liability must be interpreted as meaning that the concept of 'use of vehicles' in that article covers any use of a vehicle that is consistent with the normal function of that vehicle....’

It seems reasonable to assume from this that the same principle is capable of general application when applying the legislative intent of the Sixth Directive. Consequently, there seems a strong implication that the article 3 requirement that ‘any use’ made of a motor vehicle must be covered by compulsory third party insurance cover, means just that: any use31. In which case, the author’s earlier criticism32 of the Court of Appeal’s unanimous ruling in EUI v Bristol Alliance Partnership Ltd [2012] is vindicated33.

If we accept the general application of the protective principle, then provided a motor vehicle has some insurance cover in place, regardless of the contractual limitations that prevail between the insurer and the policyholder, it will be good for any claim arising out of any use that consistent with its normal function. Accordingly motor insurers cannot exclude liability to third party victims for deliberate damage34, road rage or because the driver is running a minicab service with a social and domestic user policy35.

A European law consistent interpretation of s151 of the 1988 Act leaves no room for a statutory motor insurer to posture as a so called ‘article 75 insurer’ when a correct application of the law obliges it to compensate the victim as though acting under its contractual indemnity; still less to impose the notoriously unfair and arbitrary terms of the Uninsured Drivers Agreement 1999 on the hapless victim.

Motor accident victims, and consumers of motor insurance policies, and are being short changed and it is time that we did something about it. Happily the solution is readily to hand. All that is required is for legal professionals to reacquaint themselves with the directives and to demand a European law consistent application of our national law to cure these defects, and failing that, to claim damages from the Secretary of State under the Francovich principle. However, it is also clear that urgent training is needed if fee earners are to be equipped to spot the numerous instances where our UK national law provision in this area fails to conform with the minimum standards of compensatory protection required under European law and how to challenge them effectively and profitably.

The European Commission is currently investigating over forty potential infringements of these directives36.

Practical implications

Our national law provision works satisfactory enough in in 90% of cases, if not more. The overwhelming majority of motor claims are against defendants who are entitled to a contractual indemnity from their insurer, so the insurer’s liability to indemnify the policyholder and to satisfy the claim is not at issue. However, there are glaring gaps, as the Vnuk ruling makes explicit, where our UK law fails to offer any compensatory protection at all where the victim is injured by an unusual vehicle type or on private property. Furthermore there is also a plethora of flaws, over forty, where our national law provision fails to meet European law minimum standards in the quality of the protective principle. These range from unlawful exclusions or restrictions of cover to highly prejudicial procedural impediments that either dilute the compensatory protection for victims or in extreme circumstances deny it completely.

There is also the problem caused by our defective national law implementation as it affects the growing incidence of fraudulent misuse of insurance by some drivers. Whilst recent initiatives by insurers and the State against uninsured driving have discouraged the more flagrant use of vehicles without any insurance in place at all, the misuse of insurance through unauthorised use of vehicles or bye practices such as ‘fronting’37 of insurance appears to be on the increase. Breaches of a policy term often result in insurers treating an ostensibly insured incident as though no insurance cover exists. This practice acquired a new authority following the Court of Appeal’s ruling in EUI Ltd v Bristol Alliance Ltd Partnership [2012] which endorsed the common practice of insurers in raising contractual breaches against third party claimants, save where expressly precluded under s148 and s151 of the 1988 Act38. That ruling is misconceived since the qualified nature of the UK compensatory guarantees that it advocates is incompatible with the comprehensive nature of the European law protective principle that requires full compensatory cover to be extended to third parties, save where expressly excluded by the directives39.

Under European law, and subject to the single permitted exception that applies to a passenger who voluntarily allows himself to be carried in a vehicle that he or she knows to be stolen40, once a TPMI policy is issued, as far as a third party victim is concerned it is good for any use made of the vehicle. European jurisprudence does not recognise, still less permit, the UK practice of discriminating against victims of insufficiently insured drivers.

The basic precept of European law on TPMI cover is that requires that cover to be good for any use.

Fitness Check

Every RTA and motor insurance liability text book is badly out of date on this topic and they have been for some time.

Law firms specialising in this field of practice would be wise to undertake an urgent review of their fee earners’ understanding on motor insurer and MIB liability issues. They should check whether their lawyers are aware of the yawning implementation gap between the UK’s statutory, extra-statutory implementation of these directives.

They might usefully enquire:

  • Whether the firm’s case management software reflects a European law consistent interpretation of the nature, scope and extent of the TPMI requirement.
  • Whether the lawyers who select, approve and risk assess cases appreciate the significance of the CJEU rulings in Bernaldez in 1996 and now Vnuk in2014.
  • The same applies to those how have a responsibility for marketing and liaising with introducers of work.
  • Whether their lawyers appreciate that many long-honoured leading authorities are misleading or unreliable because they fail to apply the CJEU’s interpretation of the directives?41 Do they realise the dangers of blithely accepting the extensive body of UK case authorities that apply a restrictive and literal interpretation of our law?
  • Many other authorities are rendered obsolete by Vnuk; do they know which ones42?
  • Whether their lawyers, including paralegal staff, who have day to day contact with clients possess the necessary legal know-how and the confidence to decide these issues for themselves and to apply a European law consistent interpretation of our law without incurring the delay and potentially unrecoverable cost of instructing counsel’s?

Unless a firm’s legal teams are familiar with: articles 143, 344, 545, 946, 1047, 1248, 1349 and 1850; the relevant recitals that explain them; as well as the extensive body of CJEU rulings whose interpretation has developed their meaning and reach, as well as the European law principles of equivalence and effectiveness, direct and indirect effect of directives – then their staff are unlikely to be able to accurately identify the flaws in our national law provision that allow insurers to exploit these loopholes and which by the same token create such excellent opportunities for successful, well remunerated legal challenges.

Furthermore, if practitioners are not familiar with the techniques of a consistent European law interpretation, nor comfortable with the legal authorities that oblige our UK courts to apply this technique51 and the multifaceted criteria for establishing a viable Francovich claim, then they will not be able to distinguish between a technical breach and one that has sound prospects of success.

There are also risk management issues presented by case management systems and lawyers applying the wrong legal criteria to individual case facts.

The good news is that the European law issues are relative easy to understand. Professional support lawyers and training managers will find that the academic principles are best absorbed if demonstrated and applied through simple practical workshops featuring realistic scenarios. Staff can be encourage to participate in a ‘before’ and ‘after’ approach to different situations.

Points to take away

  • Vnuk is good news for claimants and those who represent them;

  • It is bad news for insurers who have been lulled into a false sense of security by the Government’s inaction. Reserves and pricing will need to be reviewed. Any increase in premiums is likely to be subjected to close scrutiny from the Parliamentary Select Committee for Transport, if not from the DfT itself.

  • The scope of compulsory third party motor insurance has the potential to extend to:

    • any motor vehicle type;

    • to any use (provided it is consistent with its normal function);

    • anywhere, whether occurring on private property, off road, in a field, on a lawn or, as in Vnuk, in a farm yard.

  • The European directives on motor insurance ranks the objective of protecting victims equally to that of liberalising the movement of people and vehicles.

  • Much of our national law provision for guaranteeing the compensatory safeguards of accident victims is unlawful or misleading because the UK government has permitted numerous qualifications to the basic protective principle and these infringe European law.

  • Millions of TPMI policies fail to comply with European law minimum standards of cover, leaving the Secretary of State exposed to infringements actions, judicial review and Francovich actions52.

  • We cannot take any of our national law provision in this area at face value, it is safest to assume that it is defective;

  • These defects affect not only our statutory53 and extra-statutory provision54 but much of the case law interpreting this domestic law provision;

  • Our national law provision in this area must always be construed in the light of the Directives, now consolidated in the Sixth Directive55 and the relevant ECJ rulings; not just when the meaning is unclear but always;

  • These directives and the ECJ rulings interpreting them are our primary sources of law. Ironically, it is this EU law that brings us much closer to the original UK Parliamentary concept of a comprehensive guarantee scheme envisaged under the Road Traffic Act 1930 than the much adulterated regime we have to contend with now;

  • Whole rafts of familiar authorities that differentiate between:

    • public and private land56;

    • different vehicle types57;

    • authorised and unauthorised use58;

    • permissible and nullified or void exclusions and restrictions of contractual liability59;

.......are either defunct or at the very least of questionable authority.

  • It is no longer apposite to describe this area of tort law as ‘RTA’ practice– the potential scope of a motor insurer’s liability extends beyond ‘accidents’ and ‘roads’, thanks to the broad terminology employed in the Sixth Directive and its predecessors and, of course, Vnuk;

  • The DfT’s shambolic transposition of this European law presents excellent opportunities for successful and highly profitable legal challenges - for those who know what they are doing;

  • Legislative reform of some kind is imminent. However, the rights of injured victims under European law are not dependent on the caprice of Euro-sceptic administration; ultimately they are enshrined by Treaty obligation and so, with the right skills set, claimant lawyers have the ability to ensure that their clients’ full compensatory entitlement is upheld;

  • Competence in all facets of European law that affect, directly or indirectly, the legal entitlement of motor injury victims is not a counsel of perfection but a basic indicator that an individual is fit to practice in this field;

  • Fresh, clear and independent thinking is needed along with a working knowledge of EU law.

  • We are all European lawyers now!

Nicholas Bevan
is an award winning solicitor, formerly senior counsel at Bond Pearce. He is a nationally acclaimed commentator and presenter on motor insurer liability, asbestos related claims and regulatory compliance. He leads the campaign for wide ranging reforms to the United Kingdom’s compensatory safeguards for motor injury and loss claims and he is extensively published on this topic. His campaign blog is NOTA BENE at Nicholas provides in-house training to law firms and presents regularly for APIL and MBL Seminars. Nicholas’ contact details are: This email address is being protected from spambots. You need JavaScript enabled to view it. Telephone: 07968 427134.

1 The CJEU has ruled that national laws cannot deprive the directives of thier effectiveness, see Candolin and Others v Pohjola and Others [2005] CJEU (Case C‑537/03 ECR I‑5745) para 28, see also Churchill v Benjamin Wilkinson and Tracy Evans [2011] CJEU Case C-442/10, para 48.

2 The author’s case comment on Churchill is published in the Journal of Personal Injury Law.

3 Practically every CJEU ruling on the nature and extent of the TPMI requirement feature accidents that predate the implementation of the Sixth Directive in October 2009. According these cases refer to the first three directives that developed the concept of compulsory TPMI within the European Community, these are: Council Directive 72/166/EEC of 24 April 1972; Council Directive 84/5/EEC of 30 December 1983 and the Council Directive 90/232/EEC of 14 May 1990.

4 This concerns a policyholder who is injured by someone whom he has permitted to drive his insured vehicle but where that person is not authorised to drive it under the terms of the victims’ policy. In Churchill, the policyholder was an impressionable teenager who succumbed to peer pressure by allowing an older acquaintance, whom he knew to be uninsured, to driver his car.

5 S151(8) of the 1988 Act confers on an insurer a statutory right of recovery where the policyholder has permitted the use of vehicle in breach of the terms of the policy.

6 ‘When a national court has to has to apply the domestic provisions which have been specifically enacted for the purpose of transposing an EU Directive intended to confer rights on individuals, the national court must presume that the Member State, following its exercise of the discretion afforded it under that Article, intended entirely to fulfill the obligations arising from the Directive concerned’ Bernhard Pfeiffer et al v Deutsches Rotes Kreuz, Kreisverband Walshut eV: Case C-397/01 to C-403/01; [2004] ECR 1-8835, para 110.

7 See the author’s case comment on Delaney published in the Journal of Personal Injury Law and his article Trial and Error, published in the New Law Journal, 20 April 2012.

8 The appeal is listed for February 2015.

9Bernaldez (C-129/94) [1996] E.C.R. I-1829; Ferreira v Companhia de Seguros Mundial Confianca SA 2000 ECR 1-6711; Case C-348/98; Candolin [2005] ECR I-5745 Case C-537/03; Farrell v Whitty 2007 ECJ Case C-356/05; and Churchill v Benjamin Wilkinson and Tracy Evans 2011 Case C-442/10.

10 Section 3 of the European Communities Act 1972

11 See Bernaldez, paragraph 42.

12Ferreira v Companhia de Seguros Mundial Confianca SA 2000 ECR 1-6711; Case C-348/98; Candolin [2005] ECR I-5745 Case C-537/03; Farrell v Whitty 2007 ECJ Case C-356/05; and Churchill v Benjamin Wilkinson and Tracy Evans 2011 Case C-442/10.

13 The Sixth Directive was not then in force, so the first three directives applied, as with the Churchill and Delaney cases.

14 Council Directive 72/166/EEC of 24 April 1972, now repeated in article 3.1 of the Sixth Directive (2009/103/EC ) of 16 September 2009.

15Vnuk, paragraph 46.

16 See paragraph 106 of Mr Justice Jay’s decision in Delaney [2014].

17 As the protective principle is now one of the two main objectives of these directives and as member states no longer enjoy any significant discretion in the scope or extent of the TPMI requirement, any detraction from these minimum standards is likely to be treated as a serious infraction, see Francovich and Others [1991] ECR I-5357 (Joined Cases C-6/90 and C-9/90), paragraph 35; Brasserie du Pêcheur and Factortame [1996] ECR I-1029 (Joined Cases C-46/93 and C-48/93), which is an important factor in establishing a claim for damages against the State.

18 Paragraph 59, Vnuk

19 Section 185 restricts the definition of ‘motor vehicle’ to ‘a mechanically propelled vehicle intended or adapted for use on roads’

20 For example: ride along mowing machines, mini-bikes, airport tugs, quarry dumpsters, most go-carts, golf buggies and certain invalid wheel chairs not specifically covered by specific regulatory provision.

21 i.e. because they are not intended or adapted for road use, see Burns v Currell [1963] 2 All ER 297A and Chief Constable of Avon and Somerset v Fleming [1987] 1 All ER 318.

22 Subordination is permitted under article 10.1 of the Sixth Directive.

23 In its concluding paragraph the court stated: ‘the concept of 'use of vehicles' in that article [viz article 3 of the both the First and the Sixth Directive] covers any use of a vehicle that is consistent with the normal function of that vehicle. That concept may therefore cover the manoeuvre of a tractor in the courtyard of a farm in order to bring the trailer attached to that tractor into a barn, as in the case in the main proceedings, which is a matter for the referring court to determine.’

24 That is to say an interpretation that does not give proper effect to European Law, an occurrence that is all too common.

25 For an extract from the author’s response to the DfT consultation paper see:

26 As opposed to the sense of transporting people between destinations off-road, see Cutter v Eagle Star Insurance Ltd [1998] All ER (D) 481.

27 Compare with Hardy v MIB [1964] [1964] 2 All ER 587 or Brewer v Director of Public Prosecutions [2004] EWHC 355 (Admin).

28 Namely, of safeguarding motor accident victims’ compensatory entitlement, see paragraph 51 of Vnuk.

29 Case C-129/94 Ruiz Bernáldez [1996] ECR I-1829, Ferreira v Companhia de Seguros Mundial Confianca SA 2000 ECR 1-6711; Case C-348/98; Candolin [2005] ECR I-5745 Case C-537/03; Farrell v Whitty 2007 ECJ Case C-356/05; and more recently in Churchill v Benjamin Wilkinson and Tracy Evans 2011 Case C-442/10 and Csonka v Magyar Állam [2013] CJEU Case C 409/11.

30 See the footnote above for the extract from Bernhard Pfeiffer et al v Deutsches Rotes Kreuz, Kreisverband Walshut eV: Case C-397/01 to C-403/01; [2004] ECR 1-8835, para 110

31 Subject of course to the ‘normal function’ qualification.

32 JPIL case comment by Nicholas Bevan in JPIL issue 2 of 2012 and his article Marking the Boundary, 2013 J.P.I.L., Issue 3

33 This criticism was based on the Bernáldez line of CJEU rulings.

34 This was the exclusion clause relied on by the motor insurers in the EUI case to avoid their contractual and statutory liability to compensate the third party.

35 Recital 15 of the Sixth Directive is very clear on this: ‘It is in the interest of victims that the effects of certain exclusion clauses be limited to the relationship between the insurer and the person responsible for the accident.’

36 The complaint was filed by the author in August 2013, see:

37 Fronting denotes the passing off of the driver as though insured under an existing policy: such as where a newly licensed driver is named as a secondary user under a policy in a parents name, when in reality he is the main and only driver.

38 For further comment on EUI, see later under Practical Implications.

39 See recital 15 of the Sixth Directive: ‘It is in the interest of victims that the effects of certain exclusion clauses be limited to the relationship between the insurer and the person responsible for the accident.’ and the CJEU ruling in Bernaldez (C-129/94) [1996] E.C.R. I-1829. For a detailed explication, see also Marking the Boundary, by Nicholas Bevan, Journal of Personal Injury Law, issue 3 of 2013, see also the four part series of articles under On The Right Road? by Nicholas Bevan, New Law Journal, 8 -21 February 2013

40 See Article 13.1 of the Sixth Directive which s151(4) of the 1988 Act fails to fully implement.

41 The CJEU is the supreme authority in these matters, see section 3 European Communities Act 1972.

42 See under the Points to take away heading below.

43 Definitions

44 The third party motor insurance requirement

45 Derogations

46 Minimum levels of cover

47 The role of the compensating body, i.e. the MIB

48 A hotchpotch of special categories of victims that adds little to the core protective principle other than to provide illustrations.

49 Sets out the single permissible contractual exclusion of liability

50 Confers the right to sue an insurer directly

51 We have moved on sinceMarleasing SA v La Comercial Internacional de Alimentacion SA [1990] ECR I-4135 - Case 106/89 and White (AP) v White & MIB [2001] UKHL 9 see the footnote above on the CJEU ruling in Pfeiffer.

52 That said, the imprecision of the wording employed within the directives to define the geographic scope of the TPMI requirement, the divergence within the different language versions and the different approaches to implementation adopted by different members states may well militate against a Francovich award. See Lord Clyde’s House of Lords judgment in R v Secretary of State for Transport, ex parte Factortame Ltd and others [2000] 1 AC 524.

53 Part VI of the Road Traffic Act 1988 and the EC Rights Against Insurers Regulations 2002.

54 The Uninsured Drivers Agreement 1999, the Untraced Drivers Agreement 2003 and the so called Article 75 procedure.

55 The Sixth Motor Vehicle Insurance Directive (2009/103/EC) of 16 September 2009.

56 The test in Harrison v Hill 1932 J.C. 13; 1931 S.L.T. 598 has no relevance to the TPMI cover required under a European law consistent interpretation of our national law.

57 For example the test for determining whether a motor vehicle is caught by the TPMI provisions of what is now the 1988 Act, in Burns v Currell [1963] 2 All ER 297A is redundant. The House of Lords reasoning on the restrictive interpretation to be given to the term ‘territory’ in article 3 of the First (now Sixth) directive on motor insurance, in Clarke v Kato and Cutter v Eagle Star Insurance Ltd [1998] All ER (D) 481, is now wrong.

58 See: Gardner v Moore 1984 UKHL, Keeley v Pashen [2004] EWCA Civ 1491, AXA Insurance UK plc v Norwich Union Insurance [2007] EWHC 1046; EUI Ltd v Bristol Alliance Ltd Partnership [2012] EWCA Civ 1267

59 See in particular EUI Ltd v Bristol Alliance Ltd Partnership [2012] EWCA Civ 1267 that argues that with the exception of those exclusions expressly excluded under the 1988 Act an insurer has a free hand to exclude or restrict its liability to compensate a third party under s151 and which justifies this assertion by erroneously limiting the general application of the CJEU ruling inBernaldez (C-129/94) [1996] E.C.R. I-1829. Bernaldez expounds the protective principle which the Vnuk ruling has elevated to rank as a dual objective with liberalising the free movement of vehicles and persons throughout the EU.

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Top Five Tips for... Video Surveillance - Sarah Venn, Hardwick

Watch all of the surveillance 

As Barabara Fari discovered, surveillance evidence can be powerful and turn a case upside down. However, both sides need to carefully and methodically review surveillance evidence before drawing conclusions about its impact on a claim. Surveillance companies typically adopt the "Match of the Day" approach – they send edited footage, depicting the highlights of the surveillance, often accompanied by a log and report with their emphatic analysis. But, continuing the football analogy, the number of goals scored does not always reflect the performance overall. Context is of paramount importance and the viewer must (amongst other things) consider what the claimant has stated they can do; what the medical experts have been told; what the claimant says about the footage; and, whether what is shown on the footage is consistent.  That necessitates watching the whole 90 minutes to see what happens either side of the highlights: five minutes of activity may be accompanied by complete inactivity and recuperation for the rest of the day; a claimant may tire as the day goes on and show signs of pain which were not apparent at the start of the day; a carer may attend and offer assistance.  The unedited footage is crucial and can further or undermine either sides' case.

The procedure to challenge video evidence

In Tavenor Joe Douglas v Matthew James O’Neill [2011] EWHC 601 (QB) HHJ Collender QC reviewed authorities on video evidence and the law.  He re-stated that video evidence is a document, not a piece of witness evidence.  Pursuant to CPR 32.19, a party is deemed to admit the authenticity of a document disclosed to him unless he serves notice that he wishes the document to be proved at trial; that will then necessitate witness evidence from the surveillance operative. If the claimant is going to challenge the authenticity of the surveillance evidence (whether by instructing an expert or by this own evidence), it is important that he does so promptly, by the latest date for serving witness evidence, or within 7 days of disclosure, whichever is later.

When to raise surveillance evidence

The Courts view surveillance evidence as a legitimate weapon to undermine a claimant’s evidence and prevent the successful advancement of a case based on untruths.  However, defendants do not have a carte blanche.  In Rall v Hume[2001] EWCA Civ 145, Potter LJ said that it is necessary that the matter be ventilated with the judge managing the case at the first practicable opportunity once a decision has been made by a defendant to rely on video evidence obtained.  Claimants often complain of ambush when surveillance evidence is obtained; defendants will want to wait until the claimant has nailed his colours to the mast before revealing their hand, but leaving it too late (and not raising it at the first practicable opportunity) can result in the evidence being excluded; however, the more powerful and persuasive the evidence, the more difficult it will be to persuade the Court that it should not be admitted. In Douglas v O’Neill the judge thought that the defendant was entitled to wait until the Claimant had produced a witness statement with a statement of truth. 

Carefully manage experts

Some experts will quickly espouse opinions on surveillance evidence which the evidence does not sustain, undermining otherwise good expert evidence; you may have strong arguments on causation, but if your expert expresses unsustainable views on credibility, it may undermine all of his evidence.  You will normally want experts to view unedited footage and it can be beneficial to meet them in conference to explore their views.

Step by step disclosure

A defendant does not need to serve all of their surveillance evidence in one go; relevant surveillance can be obtained throughout the life of a claim and contrasted against the contemporaneous accounts of a claimant’s injuries and recovery.

Sarah Venn

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PI Practitioner, October 2014

16/10/14. Each issue a particular topic is highlighted, citing some of the useful cases and other materials in that area. You can also receive these for free by registering for our PI Brief Update newsletter. Just select "Free Newsletter" from the menu at the top of this page and fill in your email address.

Ogden Tables A to D: The Use of Adjusted Reduction Factors

The High Court's recent decision in Billett v MOD [2014] EWHC 3060 (QB) provides practitioners with salutary guidance on the adjustment of reductions factors (RF) from Ogden Tables A to D when assessing an award of damages for future loss of earnings.

Since their first appearance in Ogden Table 6 published in 2007, the RFs from Tables A to D have been applied to the multipliers used in future loss of earnings calculations to reflect contingencies other than mortality. 

In Billet, the Claimant sustained a non-freezing cold injury whilst on military exercise with the Royal Logistics Corps which left his feet with permanent sensitivity to the effects of cold weather. The Claimant subsequently left the Army and started civilian employment as an HGV driver. His personal injury claim against the MOD included a substantial future loss of earnings claim.

Andrew Edis QC (as he then was; now Edis J) sitting as a High Court Judge, held that while the Claimant would have left the Army in any case in the absence of his injury, he was entitled to an award of damages to reflect the potential difficulties as a result of his physical impairment in finding alternative work in the event of future unemployment. He considered that such an award should be assessed using the RFs from Ogden Table A (for a non-disabled man) and Table B (for a disabled man), the Claimant meeting the definition of disability under the explanatory notes to Ogden 7, but that a substantial reduction should be applied to the RF to reflect the very minor extent of his impairment.

In arriving at this conclusion, the Judge broadly considered the explanatory notes to Ogden 7 and the analysis of the use of RFs provided by Dr Victoria Wass, an actuary and member of the Ogden 7 Working Party.

He highlighted a number of important points relevant to the application of RFs in future loss of earnings claims which can be summarized as follows:

i. First, there is no statutory obligation to apply the actuarial tables and explanatory notes from Ogden 7 in a particular way, though a strict application of RFs to future loss of earnings claim should be the default position.

ii. Second, the Court is permitted to depart from a mechanistic application of the Tables in appropriate cases. Discretion is justified where the claimant is idiosyncratic in some way: the adjustment can be to increase the RF, for example, where the claimant's impairment is unusually mild, or to reduce the RF, where the claimant has sustained a particularly severe impairment or suffers from multiple impairments.

iii. Third, though the RFs provide the best available measure of the employment prospects for a typical member of each group, and are accurate as a measure of the group average, they are not likely to be accurate for any individual. If the Tables are applied without adjustment, the right overall figures of damages across all tables will be awarded but no claimant will receive the correct sum in damages and no defendant will pay the correct sum. The Court is required to fix a figure for compensation in the individual case before it, and is unlikely to apply unadjusted RFs without evaluating the result and adjusting it if it appears necessary to do so.

iv. Fourth, the Court should make an adjustment to the RF where the circumstances of the case indicate that it is appropriate to depart from the strict application of the Tables.

v. Fifth, where the application of the Tables produces a result which is manifestly inaccurate, it is preferable for an arbitrary adjustment to be applied to that result than for the Court to decline to use the statistical material at all. 

Piers Taylor & Matthew Waszak
Temple Garden Chambers

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Part 36 and PI Claims: Truth and Myths - John-Paul Swoboda, 12 King’s Bench Walk

  1. Part 36 was brought into existence to encourage settlement between the parties. However it can sometimes feel that as opposed to encouraging settlement Part 36 has imported an additional layer of complexity into proceedings. This two-part article will consider some essentials truths about part 36 and some myths about part 36.

    1. The truths - Part 36 offers, Part 36 acceptance and withdrawal

  1. Given Part 36 is a code and not a contract the common law doctrines of offer and acceptance do not apply. In other words to benefit from the code you have to be within it, which in turn means complying with the codes requirements.

  1. The basic mandatory requirements for part 36 offers are as follows:

    1. The offer must be in writing (CPR36.2(2)(a))

    2. The offer must state on its face that it is intended to have the consequences of of Part 36 (CPR 36.2(2)(b))

    3. The offer must specify a period of not less than 21 days within which the Defendant will be liable for the Claimant’s costs (CPR 36.2(2)(c)). The requirement is applicable to both Claimants and Defendants and the period specified is sometimes referred to as ‘the relevant period’.

    4. State whether the offer relates to the whole of the claim or part of (or an issue in) the claim (CPR 36.2(2)(d))

    5. State whether it takes into account a counterclaim (CPR 36.2(2)(e)). If there is a counterclaim in the case do not forget to mention it as it could conceivably invalidate an otherwise legitimate part 36 offer.

  1. As well as the basic mandatory requirements there are additional requirements for part 36 offers which are also mandatory.

    1. CPR 36.5 requires, in personal injury claims for future pecuniary loss, the offer must state what part of the offer is to be paid by way of periodical payments.

    2. CPR 36.6 requires, where provisional damages are claimed, to state whether the offer is of provisional damages or final damages. Further the return factors, under an offer for provisional damages, must be specified in the offer.

  1. Finally there are two requirements which only defendants have to meet when making a part 36 offer. Again these two requirements, in relation to defendants’ offers, are mandatory.

    1. CPR 36.4(1) states that on offer by the defendant must be an offer to pay a single sum of money

    2. CPR 36.15, deduction of benefits and lump sum payments, relates only to defendant offers but states that a defendant should state whether the offer takes into account recoverable benefits.

  1. In total therefore there are seven requirements to fulfil if you are a Claimant making a part 36 offer and nine requirements if you are a Defendant making a part 36 offer: no wonder mistakes are made!

  1. The requirements for accepting a part 36 offer are simpler but still not without nuance. To validly accept a part 36 offer acceptance must be in writing (CPR 36.9(1)). The same is also true for withdrawal of a part 36 offer (CPR 36.3(7)).

ii. The myths - Part 36 offers, Part 36 acceptance and withdrawal

      1. To properly effect service of a Part 36 acceptance or withdrawal it needs to be at the address for service as stated by CPR 6.22(2). That invariably will be the solicitors’ office. A situation arose in Sutton Jigsaw Transport Ltd v Croydon LBC [2013] EWHC 874 where one party was seeking to accept and the other to withdraw an offer simultaneously. However counsel for the accepting party used a scrap of paper to seek to accept the part 36 offer whilst counsel for the withdrawing party cunningly instructed his solicitors to urgently fax withdrawal of the offer to the opponent solicitor’s office, the address for service. Notwithstanding that the accepting party was first to get his notice in, the withdrawing party was successful as only the notice of withdrawal had been validly served. The myth therefore is that acceptance or withdrawal of a Part 36 offer can be undertaken at the door of court. Whilst in reality acceptance or withdrawal at the door of court is unlikely to be controversial where it is if you fail to serve at the solicitors office you may find you acceptance or withdrawal was invalid.

      1. The second myth about part 36 offers is that they can be accepted at any time. The times for acceptance are set down by the CPR 36. The time and circumstance restrictions on accepting a part 36 offer are as follows:

        1. A part 36 offer cannot be accepted without the courts permission where the trial has started (CPR 36.9(3)(d)) nor between the end of trial or before judgement unless the parties agree (CPR 36.9(5)). The restriction is also relevant in cases where a preliminary issue is tried as in Wilson v MOD LTL 23/4/13. As, per the judgement of HHJ Hughes, trying a preliminary issue amounted to starting the trial so one party cannot accept a part 36 offer after the preliminary issue had started without permission of the court.

        2. In certain circumstances permission is also required where there are multiple Defendants (apart from CPR 36.12(3) &(3))

        3. Where further recoverable benefits have been paid since the offer was made (CPR 36.15) – which can quite easily occur in a short period of time where the injury is serious and the Claimant is claiming benefits.

        4. In a fatal accident claim where apportionment is required under CPR 41.3A

        5. Withdrawal within the ‘relevant period’ (i.e. the 21 days for which the offer must be kept open before part 36 cost consequences can apply) can only be made with the courts permission pursuant to 36.3(5). In other words if you make a part 36 offer but evidence comes to light shortly thereafter to show the offer is too high or too low, you either have to hope it is not accepted, or make an application to withdraw the offer, and in the process risk tipping off your opponent as to the change in circumstances.

      1. The third myth about Part 36 offers is the concept of rejection of an offer. This is virtually meaningless, in so far as there is no scope for rejection within the part 36 scheme. It is unnecessary to reject an offer and, should you later wish to accept the offer, because of a change in evidence or circumstances, your earlier rejection may become a cause of contention.

iii. Truths - Offers which are not quite Part 36 offers

      1. Some principles can be distilled:

        1. Technical breaches of the requirements of part 36 may be overlooked especially where they have no impact on the decision to accept the offer (Huntley v Simmons [2009] EWHC 406)

        2. The court will go strive to construe an offer as a part 36 offer if it is labelled as such (and if the circumstances are right) (C v D [2011] EWCA Civ 646)

        3. Offers which fail to engage in any way with the fundamental requirements under part 36.2 are likely to fail (PHI Group Ltd v Robert West Consulting Ltd [2012] EWCA Civ 588).

          Examples include:

          1. Offers which are time limited or insert no relevant time period before which part 36 cost consequences follow

          2. Offers which assert they can be withdraw at any time

iv. Myths – the consequences of non-part 36 offers

      1. Any non part 36 offer is governed by part 44 CPR (general rules about costs). If the offer is not a part 36 offer the cost consequences of part 36 will not apply. The Court of Appeal has very recently indicated in Coward v Phaestos Ltd &ors [2014] EWCA Civ 1256 that the consequences of part 36 offers are unique:

‘…the starting point is to recognise that Part 36 and Part 44 are separate regimes with separate purposes. Part 36 is a self-contained code dealing with offers of settlement made in accordance with and subject to the terms of Part 36, which specifies particular consequences in the event that such offers are not accepted. That those consequences include features which go far beyond that which might be ordered by way of costs under Part 44 only serves to underline that it is a separate regime from Part 44.’

To be continued...

John-Paul Swoboda
12 King’s Bench Walk

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