Personal injury update: undervalued claims

In the Court of Appeal case of Dunhill v Burgin [2012] EWCA Civ 397, the claimant, 'C', suffered severe traumatic brain injury when she was hit by a motorcyclist. She experienced 'significant' cognitive, emotional and psychiatric difficulties. There was also a change in her personality. As a consequence, she required ongoing assistance that included case management and sheltered therapeutic employment.

She instructed solicitors and, later, had the benefit of counsel's advice. However, despite her condition and need for continued support, a relatively low award was claimed on her behalf. Moreover, the question of whether she was a 'patient' within CPR part 21 appears to have ?never been considered, meaning no litigation friend was appointed despite ?her injuries.

Her case was subsequently set down for trial, but compromised at the court door for just £12,500. However, and subject to any element of contributory negligence, her claim was actually worth somewhere between £800,000 and £2,000,000.

When these errors were later realised, C, understandably, sought to declare the compromise agreement void. At first instance, the court was asked to make a retrospective decision of C's capacity at the relevant time. However, the parties disagreed as to what this entailed. The defendant claimed this should be restricted to considering capacity in relation to the compromise itself, whereas C contended that it was only necessary to consider her capacity to conduct proceedings as ?a whole.

C failed at first instance. After considering previous authorities, Silbler J concluded that it was necessary to determine the issue of capacity by reference to the 'particular transaction' which meant the focus was solely on the compromise.

However, Ward LJ, who gave leading judgment in the Court of Appeal, disagreed with his interpretation of the phrase 'particular transaction'. He referred to Arden LJ's reasoning in Bailey v Warren [2006] EWCA Civ 51, where she distinguished transactions that are self-contained from those that are multi-faceted. For the latter, she gave the example of a person making a will involving several gifts which, for the purposes of capacity, is usually treated as a single transaction meaning it is not necessary to consider capacity by reference to each gift.

Therefore, where the individual steps form part of a larger set of events, it was necessary to adopt a common sense approach to determine whether these should be regarded as self-contained or connected with each other. When applied to legal proceedings, Ward LJ considered the compromise an inseparable part of proceedings and so C's appeal was allowed.

If C was unsuccessful, she had the fallback option of a professional negligence claim against her former solicitors, not just for the failure to appoint a litigation friend, but also because of what appears to be a gross undervaluation of the claim. However, she could have only claimed for the 'loss of chance', meaning she would almost certainly have not received her full damages. It is therefore understandable ?that she would embark on this route. There is a fear, however, that if she was subject ?to the forthcoming funding regime, she may not have been able to pursue this matter ?to appeal because of the greater risks involved. This would have meant she ?would have likely not ended up with ?the full financial support she needs for ?her ongoing care.

JSB damages bracket

Another example of where the court addressed an issue that gave rise to undervaluation of claims is the case of Ball v Secretary of State for Energy and Climate Change [2012] EWHC 145 (QB). This resolved the previous uncertainty concerning the low quantification of general damages in mesothelioma claims where the period of suffering is relatively short.

Mesothelioma is a terminal cancer that affects the pleural lining of the lungs. It is understood this can only be caused by asbestos exposure and there is no cure for it. The symptoms can be extremely painful and difficult to endure. These include severe chest pain, loss of appetite, lethargy and weight loss. A common symptom is shortness of breath and the fact that someone is unable to do something as fundamental as breathing can cause them anxiety. Also, and because the sufferer becomes deprived of oxygen, this can lead to confusion and disorientation.

The average life expectancy varies from just a few months to several years. However, irrespective of how long someone survives, the last two or three months of life tend to be particularly traumatic. There is usually a rapid deterioration at this point and the stress placed on those looking after them can be immense. Consequently, the general damages awarded for mesothelioma are relatively high. In 2007, the applicable Judicial Studies Board (JSB) bracket for general damages was £47,850 to £74,300.

In this case, Swift J confirmed that ?judges are not bound by these brackets, ?but stated they were 'extremely influential' given there are relatively few judges ?who have specialist expertise in asbestos disease claims.

However, the JSB is itself guided by awards made in previous cases. Unfortunately, they have little material to work from as many cases settle, the county court judgment transcripts are frequently unavailable and only brief details are provided on published reports following out-of-court settlements. This creates a problem in that just one unusual or differently reported decision can have a serious effect on subsequent ?JSB classifications.

This is exactly what occurred following the decision in Gallagher v Vinters Armstrong & others [2007] (reported in Kemp & Kemp) to award just £20,000 for a claimant who suffered the disease for about three months.

Master Whitaker (probably the most experienced UK judge in asbestos disease claims) sought to address some of the resulting confusion in Smith v Bolton Copper Ltd [2007]. This case involved a similar duration of symptoms of between two or three months, but Master Whitaker confirmed that there were other crucial factors to be considered. For instance, the claimant may have endured painful surgical procedures. Taking these other matters into account, he concluded the then JSB bracket represented 'a very fair spread' and so awarded the claimant a sum within the bracket of £55,000.

Subsequently, however, in Cameron v Vinters Defence Systems [2007] EWHC 2267 (QB), where the suffering was endured for six months, Holland J decided to award £35,000, which was well below the then ?JSB bracket.

As a likely consequence of Gallagher, the JSB, while slightly increasing the bracket of general damages in the subsequent edition of its guidelines for 2008, decided to include a caveat that, for cases involving 'unusually short periods' of suffering, an award of £25,000 might be appropriate.

This decision was controversial. Swift J expressed concern about the JSB's focus on duration and set out a non-exhaustive list of other factors that should be taken into account. She also noted that, more recently, the JSB had opted to reduce the lower end of the bracket to £35,000. She was concerned that this would reduce the average level of damages awarded in such cases. Therefore, without placing too much weight on the duration of symptoms (which in this case was just five months), she made an award of £50,000. The fact the claimant was a 92 year old had little impact.

The decision is welcome, but it is unclear why the JSB did not view Gallagher simply as an instance of the judge exercising his discretion '“ the brackets are not binding on judges after all. Also, there appears no reason why Master Whitaker's comments in Bolton were not taken into account. In any case, it is hoped this case will lead to a redrafting of the guidelines which places less emphasis on duration. However, it is concerning that many cases may have settled for disproportionately low damages following publication of the 2008 guidelines.

Non-delegable duty of care

In the last personal injury update (156/8, 28 February 2012), we discussed the first instance decision involving a ten-year-old school girl, W, who suffered permanently disabling brain injury in a swimming accident. The court at first instance had to consider whether the school's local authority owed her a 'non-delegable duty of care' for the actions/wrongs committed by others, namely those actions of the lifeguard and swimming teachers at a pool that was not on school premises. This goes beyond the school's duty to ensure that suitable and competent persons are used to look after their children because even if this duty is discharged, they could potentially remain liable if these other persons or contractors breach their own duties of care. This is due to the 'non-delegable' nature of this duty which is similar to the duty owed in vicarious liability cases.

W was unsuccessful at first instance and so has since appealed. Tomlinson LJ gave the leading judgment in the Court of Appeal in Woodland v Essex C.C. [2012] EWCA Civ 239. Unfortunately for W, the outcome for her was the same, but there remains the possibility this will be appealed to the Supreme Court. In fact, the Court of Appeal remained of the view that in the right circumstances a local authority could owe a non-delegable duty.

Also, Laws LJ gave a dissenting ?judgment that the facts of W's case warranted such a finding. It remains to be seen what approach the Supreme Court will adopt if permission to appeal is sought and granted. If the Supreme Court confirms the existence of such a duty, then this will have far-reaching implications for school operators and also hospitals that utilise independent contractors.