UK: Public Authority Liability Update - Insurers Must Pay Higher Success Fee In NIHL Claims

The meaning of disease under CPR 45

Dalton v British Telecommunications Plc [2015] EWHC 616 (QB)

The facts

In costs proceedings in relation to four separate claims brought by former employees, the court was required to determine a preliminary issue in relation to the success fee payable by the employer, BT.

Although the rules changed on 1 April 2013, success fees are still recoverable where a CFA was entered into before that date. Under the old CPR r45, where a claim is for a "disease", a success fee of 62.5% will be recoverable if the claim settles before trial. If it is not a disease, it will be classified as an injury and (if sustained on or after 1 October 2004), it will attract a success fee of only 25%. The issue in this case was whether Noise Induced Hearing Loss (NIHL) is a disease or an injury.

Held

The Defendant sought to rely on the earlier decision of Patterson v MoD in which it was held that, applying the "natural and ordinary meaning" of the word, non-freezing cold injury (NFCI) was not a disease.

However, Phillips J held that, taking into account legislative history, there is a strong indication that Parliament intended "disease" in CPR r45 to "include any illness (whether physical or physiological), disorder, ailment, affliction, complaint, malady or derangement other than a physical or physiological injury solely caused by an accident or other similar single event". Noting that his conclusion differed from that of Males J in Patterson, the Judge added: "but it does not appear that the lengthy legislative history, nor its relationship with the current Pre- Action Protocol, was drawn to his attention". Nevertheless, there are now two conflicting High Court decisions on the definition of disease in CPR r45.

The Judge went on to say that even if he was wrong about the meaning of "disease", "it is nevertheless entirely clear, in my judgment, that the term (however it is defined) must be taken to include NIHL". That was because of the legislative history relating to NIHL as well as the fact that "NIHL is not merely an occupational disease but is the paradigm case of such a disease". Reference was also made to a report by the Civil Justice Council which recorded an "industry" agreement in 2005 that success fees for NIHL would be 62.5%.

An application has been made for permission to appeal to the Court of Appeal. The judgment is concerned with a point of law, with no elements of fact or issues of discretion, namely a point of statutory construction.

What can we learn?

  • This decision effectively maintains the status quo, however from a defendants perspective it appears unfair and fails to reflect the reality of NIHL claims and how they are dealt with in practice
  • Although a distinction is made between injury caused by accident and injury caused by disease in the Pre-Action Protocol, the only reason that occupational deafness is a disease, is because it is given that label under the Social Security (Industrial Injuries) (Prescribed Diseases) Regulations 1985, a provision which is surprisingly absent from the former Part 45 of the CPR
  • For the purposes of the Pre-Action Protocol, disease would plainly include NIHL, but that is only for the purposes of the Protocol. There is a long line of authority emphasising the dangers of trying to construe rules by reference to practice directions. Indeed, the protocol is not even a practice direction and should therefore be given limited recognition
  • It is to be hoped this decision will be critically reviewed by the Court of Appeal

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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