The Supreme Court will resume sittings in early October. It will consider several cases of interest to insurers in 2015/16, some of which have been already covered on this blog. Several recent rulings on permissions to appeal are also noteworthy. The Hayward case currently being run by Zurich looks set to see the insurer engage once more with the Supreme Court to test the law on claims fraud, some three years after the strike out case of Summers v Fairclough Homes.
Cox v Ministry of Justice and Mohamud v Morrison, which examine vicarious liability – for a prisoner and for a supermarket employee – are expected to be heard together early in the 2015/16 year. Any reinterpretation of the scope of vicarious liability could clearly have ramifications beyond the narrow scope of prisons and supermarkets.
The Ministry of Justice is also defendant/respondent in the Knauer case, in which the claimant is seeking to re-set the calculation of multipliers in fatal accident claims. It is a mesothelioma claim – as were all the previous unsuccessful challenges to this calculation – and appears likely to be heard fairly early in the 2015/16 year. Knauer is also notable as it is a leapfrog appeal direct from the High Court.
Determination of the scope of riot compensation under the present (19th century) legislation is due to be considered by the Court in Mayor’s Office for Policing v Mitsui. Permission to appeal had been given in December 2014 but the hearing date is not yet known. The case stems from the London riots of 2011, the consequences of which caused the Government to commission a wholesale review of the extremely dated riot compensation legislation. The resulting draft Bill was published in the last session of Parliament and is expected to proceed in due course.
Versloot Dredging v HDI Gerling involves an insurer’s right to refuse a claim in its entirety because of the policyholder’s use of a fraudulent device (statement or document) in pursuing an otherwise genuine loss. The Court of Appeal’s decision last autumn evidenced a strong policy justification to deter fraudulent claims. Permission to appeal was given in March 2015, which might suggest this could be heard late in the 2015/16 year.
Zurich Insurance v Hayward involves another aspect of fraud – whether it allows a settlement to be set aside. The issue here is finely nuanced: Zurich agreed a monetary settlement with Hayward, knowing that his claim was suspect. Evidence subsequently emerged showing that his misconduct was far in excess of that suspected by the insurer when entering into the earlier settlement. The High Court permitted Zurich to re-open the settlement but the Court of Appeal refused. The policy justification underpinning its decision was to preserve the finality of settlement agreements. That said, Lord Justice Briggs, had he been able to find a legal grounding for doing so, “would gladly have embraced any sound basis for upholding the trial judge’s decision to strip the appellant of the grossly inflated amount which he received upon the settlement of his fraudulently exaggerated injury claim”. On 28 July the Supreme Court granted Zurich permission to appeal.
Also granted permission to appeal on 28 July was Moreno v MIB, which is the second leapfrog appeal in this list, along with Knauer (above). This case turns on the clash between 2003 UK regulations setting out the MIB’s obligations and the later, and higher, norm of the EU’s Rome II regulation on applicable law. The Bureau is arguing for the latter to prevail and is seeking to overturn the 2010 case of Jacobs v MIB.
Only two days later, the Supreme Court refused permission in McCracken v Smith and Bell. The Court of Appeal had held that the ex turpi causa defence would defeat claims between those in a joint criminal enterprise, that being the stealing and joyriding of a motorcycle. It – ex turpi – did not, however, provide a negligent third party (Bell, a minibus driver) with a defence to a claim made against him by one of the joyriders. The three Justices who refused permission (Lady Hale and Lords Hughes & Toulson) added this unusual rider, the legal weight of which not immediately clear: “While not endorsing the reasoning of the Court of Appeal on the ex turpi causa point, the Panel consider that the result was correct.”
About the Author
Alistair Kinley is BLM’s Director of Policy & Government Affairs.
Alistair is responsible for BLM’s engagement with government departments and regulators on policy and public affairs issues and consultations affecting the firm and its customers. He coordinated BLM’s market-facing activities in connection with the Insurance Act 2015 and the consultations which preceded its publication and introduction in Parliament.
He is a member of the Civil Justice Council (CJC), a regular speaker and experienced commentator on legal and procedural reforms and was a contributing editor to the Law Society’s Litigation Funding Handbook (September 2014).