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Two key legislative reforms to Personal Injury law due

Two key legislative reforms to Personal Injury law due

Two key pieces of legislation affecting personal injury and clinical negligence law, the Criminal Justice and Courts Act 2015 and the Social Action, Responsibility and Heroism Act 2015, were given royal assent on 12 February 2015 and are expected to come into force in April 2015.

Catriona Stirling, barrister at Cloisters Chambers examines the key provisions of which personal injury practitioners should be aware.

 

Criminal Justice and Courts Act 2015

Much of the focus on this Act during its passage through Parliament was on proposed reforms to judicial review and the criminal justice system. However, two key reforms relevant to personal injury claims were hidden away in Part 3 of the Act.

Fundamental dishonesty

Section 57 of the Act will apply to a personal injury claim where the court finds that the claimant is entitled to damages in respect of the claim, but is satisfied on the balance of probabilities that the claimant has been ‘fundamentally dishonest’ in relation to the claim or a related claim (s.57(1)). A related claim is a claim for personal injury made by someone else in connection with the same incident (s.57(8)).

If s.57 applies, the court must dismiss the primary claim, unless it is satisfied that the claimant would suffer ‘substantial injustice’ if the claim were dismissed (s.57(2)). All of the claim will be dismissed, including any element of the primary claim in respect of which the claimant has not been dishonest (s.57(3)).

If the court dismisses the claim, it must record the amount of damages that the court would have awarded to the claimant in respect of the primary claim, but for the dismissal of the claim (s.57(4)). When assessing costs, the court must then deduct this amount from the amount which it would otherwise order the claimant to pay in respect of costs incurred by the defendant (s.57(5)).

These provisions will not apply to proceedings where a claim form is issued before the day on which the section comes into force (s.57(9)).

A claimant who has a valid personal injury claim against a defendant, and is entitled to damages in respect of that claim, will therefore find that his claim is nevertheless dismissed by the court if it considers that he has been ‘fundamentally dishonest’ in respect of any part of the claim, unless the court is satisfied that this would cause him ‘substantial injustice’.

The main questions which arise in interpreting s.57 are: what is meant by ‘fundamentally dishonest’ and what is meant by ‘substantial injustice’?

Unfortunately, there is no clear guidance on what will constitute ‘substantial injustice’. It may depend on what interpretation is given to the words ‘fundamentally dishonest’. For example, dismissing an entire claim (and requiring payment of a defendant’s costs) by reason of a mild exaggeration of certain symptoms would be far more likely to cause ‘substantial injustice’ than striking out a claim wholly based on completely fabricated events. It is to be hoped that the courts will take a sensible and sympathetic approach to claimants here. 

It is worth mentioning that the words ‘fundamentally dishonest’ also appear in the costs rules, in CPR r.44.16(1), which provides for an exception to the protection of qualified one-way costs shifting where ‘the claim is found on the balance of probabilities to be fundamentally dishonest’. There has been some very limited judicial interpretation of ‘fundamentally dishonest’ in this context, but it is not clear if the same interpretation will apply to the new Act.

A claimant to whom s.57 applies will be left without any compensation for his injuries and is also likely to have to pay the defendant’s costs, albeit that there will be a deduction from those costs to reflect the damages which he would have received.

The fear of such sanctions could discourage claimants with genuine claims from pursuing those claims in case of a finding of fundamental dishonesty.

Legal practitioners, too, are likely to be wary of proceeding in many cases for fear that a claimant’s initial evidence is subsequently damaged and found to be fundamentally dishonest, with the consequent implications for recovery of their own costs.

There would seem to be no good reason for personal injury litigation to be singled out in this manner when there may be ‘fundamentally dishonest’ claimants in any field of the law.   

Moreover, the legislation is notable for its imbalance as between claimants and defendants. There is no provision stating that a defence will be struck out if a defendant is found to have been fundamentally dishonest in respect of part of his defence, and it is difficult to see why that should be the case. What is sauce for the goose should be sauce for the gander.

Ban on inducements

Section 58 introduces a ban on regulated persons offering benefits as an inducement to make a claim for damages in civil proceedings for personal injury or death, other than the provision of legal services in connection with the claim (s.58(1)). The ban also applies to benefits offered by others in accordance with arrangements made by or on behalf of a regulated person; in that instance, the regulated person is to treated as offering the benefit (s.58(4)).

An offer of a benefit to another person will be considered an inducement to make a claim if the offer of the benefit is intended to encourage that person to make a claim, or to seek advice from a regulated person with a view to make a claim, or is likely to have the effect of encouraging the person to do so (s.58(2)).

An offer of a benefit may be an inducement to make a claim regardless of when the offer was made or the benefit may be received, whether the receipt of the benefit is subject to conditions or whether the benefit will be received by the person to whom the offer is made or by a third party (s.58(3)).

Pursuant to section 60, the regulated persons to whom the ban applies include barristers, solicitors and legal executives.

This provision brings the position of legally qualified practitioners into line with that of claims management companies, who were banned from offering inducements to personal injury claimants in the Legal Aid, Sentencing and Punishment of Offenders Act 2012, and is to be welcomed. It would seem best for practitioners and clients alike if instructions in personal injury matters are given on the grounds of expertise and client service rather than on the basis of financial inducements.

Social Action, Responsibility and Heroism Act 2015 

This Act, which received trenchant and wide-ranging criticism by lawyers and politicians alike during its passage through Parliament, has nevertheless now made it onto the statute book. 

It applies when a court, in considering a claim that a person was negligent or in breach of statutory duty, is determining the steps that the person was required to take to meet a standard of care (s.1). It is not, therefore, limited to personal injury cases. However, that is the field in which it is likely to have the most application.

Despite the Act’s grandiose title, there are only three further substantive provisions, which are as follows:

  • The court must have regard to whether the alleged negligence or breach of statutory duty occurred when the person was acting for the benefit of society or any of its members (s.2).
  • The court must have regard to whether the person, in carrying out the activity in the course of which the alleged negligence or breach of statutory duty occurred, demonstrated a predominantly responsible approach towards protecting the safety or other interests of others (s.3).
  • The court must have regard to whether the alleged negligence or breach of statutory duty occurred when the person was acting heroically by intervening in an emergency to assist an individual in danger (s.4).

The government’s reasons for proposing this legislation have remained muddled and confused. It has been presented as ‘sending a message’ to courts and the public about the way in which the courts will regard these matters, but the government has at times appeared to accept that it will not change the present law in any way.

The courts are already likely to take into account factors such as benefit to society and whether an action was carried out in an emergency when assessing whether negligence or breach of statutory duty has occurred.

Indeed, section 1 of the Compensation Act 2006 explicitly provides that:

A court considering a claim in negligence or breach of statutory duty may, in determining whether the defendant should have taken particular steps to meet a standard of care (whether by taking precautions against a risk or otherwise), have regard to whether a requirement to take those steps might –

  1. prevent a desirable activity from being undertaken at all, to a particular extent or in a particular way, or
  2. discourage persons from undertaking functions in connection with a desirable activity.

The actions for the benefit of society and heroic actions to which s.2 and s.4 of the latest Act refer would presumably be considered ‘desirable activity’ within the meaning of the 2006 Act, so it is difficult to see what, if anything, the latest Act adds to or changes in the law in that regard. It is likely, therefore, that these provisions will have little impact upon the courts’ current approach.

Section 3 is concerned with whether a person has demonstrated a predominantly responsible approach towards protecting the safety or other interests of others. This provision is difficult to understand. It appears to be limited to the approach demonstrated ‘in carrying out the activity in the course of which the alleged negligence or breach of statutory duty occurred’, therefore it does not seem that it would be open to a court to consider how a person has acted when carrying out the activity at other times.

If a person has acted responsibly to the extent that they have not been negligent or in breach of statutory duty, then there is unlikely to be any valid claim in any event. If they have acted responsibly, but for negligence in some regard, then there has still been negligence and this Act should not be interpreted as offering a defence.

It is to be hoped that the courts will pay little heed to this Act and will continue, as they have done in the past, to assess all of the surrounding circumstances when considering whether a defendant has acted negligently or in breach of statutory duty.

Looking Forward

Taken together with recent proposals to introduce vastly increased court fees from April 2015, which are likely to have a particularly significant impact upon claims for personal injury, this latest tranche of legislation seems just to be the latest instalment in the present government’s seemingly relentless onslaught of new proposals in this area. Practitioners will be bracing themselves for what the government may have in store for them next.  

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