Evidence submitted by the Association
of District Judges
1. The Association is aware that there is
concern as to whether there is now a "Compensation culture"
in England and Wales. We also recognise that, at least in part,
it is thought that this culture, if it exists, is fuelled by "claims
farmers".
2. To address these concerns, the government
has recently introduced a Compensation Bill. This evidence presents
the Association's views on the Bill.
3. We also comment on the NHS Redress Bill,
and on the effect that Conditional Fee Agreements have had on
the civil justice system.
COMPENSATION BILL
4. Clause 1 of the Bill contains a provision
relating to the law of negligence. The explanatory notes to the
Bill set out, at paragraph 8, the current common law test which
a claimant must satisfy to establish negligence, namely a duty
of care owed to the claimant by the defendant, a breach of that
duty of care, and loss or damage (including injury) arising from
the breach.
5. Paragraph 10 of the explanatory notes
states that the provision (clause 1) "is not concerned with,
and does not alter the standard of care, nor the circumstances
in which a duty to take that care will be owed. It is solely concerned
with the court's assessment of what must be done to satisfy the
standard of reasonable care in the case before it."
6. Subject to the outcome of legal argument
when cases start to come before the courts, the initial view of
the Association is that clause 1 is unnecessary. It does not appear
to add anything to the existing common law, and we can see no
need for any form of statutory provision to remind judges of the
tests to be applied.
7. We do not believe that there is any evidence
that judges have been coming to decisions which might fuel any
form of "compensation culture". Indeed, our researches
show the opposite to be the case. We append as Annex 1 a summary
of some recent cases, all of which, in our view, demonstrate that
the courts are well able to identify cases where it would not
be appropriate to allow a claimant to succeed in a claim for negligence
by finding a duty of care to exist or by finding a breach to have
occurred in unreasonable circumstances.
8. Clause 1 of the Bill refers to "an
activity which is desirable", but the Bill does not contain
any definition of what constitutes a "desirable activity".
We are aware that this provision comes in the light of a number
of reports in the press of schools, local authorities and other
organisations cancelling activities, apparently concerned about
the risk of being sued in the event of an accident.
9. In our view this concern, though understandable,
is misplaced. We believe that courts are well able to distinguish
genuine valid claims from those which seek to place an unreasonably
high standard on event organisers. We accept that not all claims
reach court, and it may well be the case that insurers have been
too ready to settle claims without proceedings, perhaps fearing
the costs that might be incurred in defending claims. In turn,
this may then affect insurance premiums, and make it more difficult
to obtain suitable insurance cover. This is an issue for the insurance
industry.
10. In short, we believe clause 1 adds nothing
to the existing law, and we can see no advantage in seeking to
add statutory force to the existing common law. However, it could
engender argument as to what constitutes a "desirable activity",
and as to how the provisions of the clause should be interpreted.
This would clearly have an impact on the court system, by introducing
new litigation which, in our view, is unnecessary and undesirable.
11. As far as the remaining provisions of
the Bill are concerned, we would generally support the regulation
of Claims Management Services. We are concerned that the activities
of some such companies have fuelled an unreasonable expectation
of obtaining compensation in the minds of the public.
NHS REDRESS BILL
12. When the Chief Medical Officer published
his consultation paper, Making Amends, we supported the
proposals for two Redress schemes proposed in the paper. The NHS
Redress Bill seeks to establish only one of these schemes, for
low value claims, and we think it is unfortunate that it is not
proposed, at least at present, to introduce a Redress scheme for
babies with severe neurological impairment.
13. However, we welcome the proposal to
establish a scheme to resolve lower value disputes arising out
of mistakes by Health Service professionals in hospitals. We note
that the Bill simply provides a framework, and the detail will
be contained in Regulations yet to be published. As always, the
precise detail will be important.
14. The CMO's original proposal was for
claims of up to £30,000 to be dealt with under such a scheme.
The current proposal is limited to £20,000. We are not clear
why this figure has been chosen, although we note that this is
the proposed limit on financial compensation, and would not include
other forms of care or assistance that might be offered.
15. We recognise that, in many cases, those
who have suffered a medical incident are more anxious to have
an explanation and, if appropriate, an apology, rather than necessarily
compensation. The scheme under the Bill seeks to deal with this.
16. There may be a perception that any body
set up to administer such a scheme may lack impartiality. This
is essentially a matter of policy, but care needs to be taken
to seek to ensure that the body is perceived as impartial.
17. It is important that those offered some
form of redress under the proposed scheme, whether financial compensation
or some other remedy, have the opportunity to obtain independent
legal advice before deciding whether to accept. £20,000 is
a substantial sum. We accept that the Bill seeks to provide for
this. We believe that any list of independent solicitors able
to offer such advice should be accredited as having experience
and expertise in dealing with clinical negligence claims.
18. We remain concerned that such a scheme
may lead to substantial numbers of claims from people who would
not currently claim. The scheme will need to be administered carefully
to identify frivolous claims.
CONDITIONAL FEE
AGREEMENTS
19. The terms of reference for the Committee's
inquiry refer to "contingency fee agreements". Strictly,
contingency fees (where the lawyer takes a percentage of the damages)
are largely illegal in England and Wales. Our comments therefore
relate to Conditional Fee Agreements (CFAs), where a solicitor
takes on a case on a "no win, no fee" basis, but, if
successful, can claim a "success fee" in addition to
the base fees and disbursements. Such fees are normally recovered
from the other party.
20. Since legal aid has largely been removed
in civil claims, most claimants now have no option other than
to enter into a CFA. We believe that this has had two important
consequences.
21. First, solicitors will only take on
cases they expect to win. This may mean that claimants whose claims
do not have a chance of success of well over 50% are denied access
to justice, unless they are in a position to fund the case privately.
22. The second consequence is that, where
claims are successful, solicitors' costs have increased substantially.
This is in part because of the application of a success fee, which
may be as much as 100% of the base costs. The effect of this is
most obvious in smaller claims, where it is by no means uncommon
for the costs claimed to be two or three times the amount of damages
awarded to the claimant.
23. Not surprisingly, defendants seek to
obtain a reduction in the costs they have to pay. This has led
to a huge increase in the number of claims coming before the courts
relating only to costs. The majority of such claims are heard
by District Judges, so our members are particularly affected by
this.
24. We are aware of the recent paper on
funding from the Civil Justice Council. We support their proposals
for the introduction in fast track cases of a predictable costs
structure. We believe that this will ensure that costs in such
claims are proportionate to the amounts in issue. For personal
injury claims, the fast track involves claims in the band of £1,000-£15,000
25. Referring specifically to the inquiry's
terms of reference, we would comment as follows:
Does the "compensation culture" exist?
We believe that there is a widespread perception
that, when an accident occurs, someone must always be to blame.
This has been fostered by the activities of "claims farmers",
and by reports in the press. People who might not have thought
of pursuing a claim are encouraged to do so. It is, of course,
important that people who have suffered a genuine injury as a
result of negligence or breach of duty should have the opportunity
to seek redress. We believe that the existing law deals effectively
with the resolution of such claims, but it is important that the
costs of seeking redress are not disproportionate. Various forms
of Alternative Dispute Resolution, and schemes such as the proposed
scheme under the NHS Redress Bill, should assist.
It is equally important that the courts are
able to identify cases where it would be unreasonable to impose
liability on a defendant, because to do so might stifle legitimate
and useful activities. We believe that courts are well able to
do this under the existing law.
What has been the effect of the move to "no-win-no-fee"
contingency fee agreements?
As indicated above (paragraphs 20ff),
we believe that this has led to disproportionate costs, and to
a risk of some claimants being denied access to justice.
Is the notion of a "compensation culture"
leading to unnecessary risk averseness in public bodies?
From reports in the Press, this may be the case.
As we have said above, this may be linked with the cost of insurance.
Should firms which refer people, manage or advertise
conditional fee agreements be subject to regulations?
We support the principle of regulating claims
management companies. How this should be done is essentially a
matter of policy, on which we have no comment.
Should any changes be made to the current laws
relating to negligence?
For the reasons set out above, we do not think
that any changes are necessary.
Annex
CASES
Babbings v Kirklees Metropolitan Borough Council
[2004] EWCA Civ 1431
Claimant, a child, sustained injury in a school
PE class when performing an exercise whereby she had to run up
to a springboard, take off, grab hold of a bar and then drop to
the floor and land on her feet. She jumped from the springboard,
missed the bar and landed awkwardly. Claim dismissed at first
instance as not foreseeable that claimant would land as she did.
Permission to appeal refused as no real prospect of success. Likelihood
of injury which was more than minimal was extremely small. Perfectly
reasonable for exercise to be performed, and the courts would
be doing gym teachers no service if they were to hold that they
were in breach of their duty of care when an unhappy accident
occurred.
Elliott v Townfoot Stables (Unreported)
The defendant stables were not liable for injuries
sustained by the claimant in a fall during a riding lesson as
the pony was suitable, the lesson was properly supervised and
the damage sustained was not of a kind which a pony was likely
to cause.
Singh v Libra Holidays [2003] EWHK 276 (QB)
A holidaymaker who was severely injured when
he dived into the shallow end of a hotel swimming pool whilst
under the influence of alcohol failed to establish that the tour
operator was responsible for the accident. Claimant the author
of his own misfortune.
Rhind v Astbury Water Park Limited [2003] EWHC 1029
A swimmer who ignored signs forbidding swimming
and dived into shallow water had no claims for personal injury
against the companies occupying the lake, despite the fact that
he was a visitor rather than a trespasser. The true effective
cause of claimant's tragic accident was his foolhardy action in
doing a running dive into shallow water.
Tomlinson v Congleton Borough Council and another
[2003] UKHL 47
There was no liability under the Occupiers'
Liability Act 1984 for the claimant's injuries from diving into
a shallow lake as the risk was obvious. It did not arise from
the state of the premises or anything done or not done on them
and accordingly no duty of care was owed.
Higgs v WH Foster (t/a Avalon Coaches) [2004] EWCA
Civ 843
An occupier owed no duty of care to a trespasser
who had fallen into an uncovered inspection pit on his land since
he did not know or have reasonable grounds for believing that
a trespasser would enter his premises and come into the vicinity
of the pit.
Kidd v Portsmouth City Council (Unreported) [2004]
Claimant, a child, was playing in a community
garden occupied and controlled by the defendant, when she tripped
on a stone in a gravel path leading from a gate to the garden.
Sustained injury resulting in the loss of her left eye. Judge
at first instance found no negligence or breach of duty in the
construction of the path. Appeal dismissed.
Simonds v Isle of Wight Council [2003] EWHC 2303
(QB)
A council responsible for a school was not liable
in negligence for an injury sustained by a student after jumping
from a swing. It was not reasonable to impose on the school any
legal duty to immobilise the swings.
Blake v Galloway [2004] EWCA Civ 814
Claimant aged 15 suffered serious eye injury
when struck by a piece of tree bark thrown by a friend during
horseplay. Held that this was just an unfortunate accident. Young
persons will always want to play vigorous games and indulge in
horseplay, and from time to time accidents will occur and injuries
will be caused. But, broadly speaking, the victims of such accidents
will usually not be able to recover damages unless they can show
that the injury has been caused by a failure to take care which
amounts to recklessness or a very high degree of carelessness,
or that it was caused deliberately (ie, with intent to cause harm).
District Judge David Oldham
Chairman, Civil Committee
Association of District Judges
November 2005
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