Welcome to the twelfth edition of Clyde & Co's (Re)insurance and litigation caselaw weekly updates for 2015
This week's caselaw:
Lloyd v Humphreys & Glasgow
Whether second asbestos-related claim against employer/insurer was an abuse of process
http://www.bailii.org/ew/cases/EWHC/QB/2015/525.html
The claimant was exposed to asbestos by various employers between the 1950s and 1970s. He issued a claim for damages for asbestosis against some of these former employers and that claim eventually settled. The defendant to this action did not join that settlement though, since its insurers were awaiting the outcome of the Trigger Litigation case (reported in Weekly Update 12/12). It will be recalled that in that case, the Supreme Court held that mesothelioma sufferers sustain injury when they are exposed to asbestos.
After his claim for asbestosis settled, the claimant developed mesothelioma and eventually brought a claim for damages for mesothelioma against the defendant. One of the issues in this case is whether that second claim was an abuse of process. Although it is more likely to be an abuse of process for a claimant to sue the same defendant twice, there can be abuse where a claimant brings two claims against different defendants.
The defendant (and its insurers) argued that, in light of the volume of claims, the courts should apply especially robust rules to litigation involving industrial injuries which have a long latent period, and claimants should be stopped from bringing successive claims for the same injury against different employers. Although the judge described that argument as "attractive", she did not believe that an employee must sure all employers in one go. She commented that the real difficulty in this case was that asbestosis is a divisible injury (so a defendant is only liable for that part of the injury which can be attributed to the tortious exposure for which he is responsible) whereas mesothelioma is not. The claimant "only had one cause of action against each of his employers. But he had a separate cause of action against each. I do not consider that, on the facts of this case, there is any abuse in settling claims arising from the causes of action against the former employers whose insurers did play ball, and not wasting time pursuing the employer whose insurer would not".
The judge also considered whether the claim was time barred and referred to a well-settled principle of personal injury law that if a person has suffered actionable personal injury as a result of a defendant's breach of duty, he can and must claim damages in the same action for all the damage which he has suffered or will suffer in consequence of that breach of duty. She rejected an argument that that rule did not apply where mesothelioma develops from asbestosis. Accordingly, the claimant should have claimed for all the consequences of the tortious exposure to asbestos at the same time (ie in the first action which he brought). Nevertheless, the judge decided, on the facts, to exercise her discretion under section 33 of the Limitation Act 1980 to allow the claim to proceed.
Boreh v Republic of Djibouti
Whether freezing injunction should be set aside because of misconduct of a party's legal representative
http://www.bailii.org/ew/cases/EWHC/Comm/2015/769.html
The applicant applied to set aside a freezing injunction made against him on the basis that the claimant's legal representative deliberately or recklessly misled the court. Flaux J considered the following general principles:
(1) Although the duty of full and frank disclosure only applies on an ex parte application, the cases on the effect of a deliberate failure to make full and frank disclosure were applicable by analogy to this case, which involved a hearing which was inter partes. Accordingly, unless there are exceptional circumstances, an order will be discharged where there has been deliberate non-disclosure or misrepresentation.
(2) The judge opined that although deliberate misconduct would not of itself be a reason not to grant a fresh freezing order (provided it was otherwise appropriate to do so), when that deliberate misconduct is viewed as a failure to "come to equity with clean hands", that would be a basis for refusing to grant a fresh order (because there would have been an "immediate and necessary relation between the misconduct of deliberately misleading the court....and the equity now sought of a fresh Freezing Order"). In any event, though, the judge held that it would not be appropriate here to grant a fresh freezing order.
(3) Was it relevant that the misconduct was that of the solicitor and not the client? Flaux J held not: "as a matter of principle, where a court is being invited to impose some sanction for negligence or misconduct, solicitor and client are to be regarded as indivisible". Prior caselaw remained applicable even though there has been no post-CPR authority directly in point. Furthermore, the freezing order should not be allowed to stand here because the claimants had not been "blameless ingénues".
Unite v Liverpool Victoria
Court of Appeal decides whether claimant was entitled to commission where insurance products were sold to its members
http://www.bailii.org/ew/cases/EWCA/Civ/2015/285.html
The first instance decision in this case was reported in Weekly Update 04/14. The claimant trade union entered into an agreement with the defendant, which sells insurance products. In return for access to the claimant's members for marketing purposes, the defendant agreed to pay a commission to the claimant. However, some members of the claimant purchased the defendant's insurance products directly. As a result, the parties disputed whether the claimant was entitled to its commission for all products sold to the claimant's members or only for those products sold via a dedicated telephone line/website identified in marketing materials sent to the members.
This depended on the interpretation of the agreement between the parties which obliged the defendant to pay commission "in respect of the Services". Teare J accepted that this covered selling which followed advice and marketing to the members but rejected the defendant's argument that only those sales to members via the designated channels fell within the scope of "Services". Certain members might read the marketing literature sent to them directly and then purchase a product in the same way as any member of the general public.
Accordingly, the judge concluded, on the facts of the case, that commission was payable when there was a "causal connection" between the Services (i.e. marketing) and the earning of premium. He rejected an argument that his conclusion was unworkable in practice. An appeal from that decision has now been allowed by the Court of Appeal, which found in favour of the defendant.
The Court of Appeal held that the judge's approach was unworkable. Instead, a commission could only be earned where a product has been sold because of the marketing of the scheme (and this would include the situation where a member chose to not use one of the dedicated channels but then, at the last moment, revealed that he is a member): "Such a conclusion links the entitlement to commission to cases where the aim of the...schemes – to promote the sale of scheme products in return for the efforts spent in marketing them – has been achieved". This avoided the claimant obtaining commission when there is no real connection between the marketing and the ultimate purchase.
Society of Lloyd's v Noel
Court defines test for granting an extended civil restraint order against litigant in person
http://www.bailii.org/ew/cases/EWHC/QB/2015/734.html
The respondent is a litigant in person who had her application for various orders against the Society of Lloyd's struck out and certified that it was totally without merit. Lloyd's applied for a further extended civil restraint order against her. Lewis J held that, when deciding wither to make such an order, the court was entitled to have regard to all the claims or applications made which were totally without merit and was not limited to considering solely the claims and applications made since the expiry of the latest extended civil restraint order. Since the litigant in person here had made a total of seven such applications, the court did have a power to make the order. Furthermore, this was an appropriate case for exercising the court's discretion to make such an order since there was a very high risk that if the order was not made, the litigant would continue to make totally unmeritorious applications. The extended civil restraint order which was made will last for 2 years.
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