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Addressing the paradox of employers’ liability insurance

Urgent changes are needed to the legislation that governs severe injuries in the workplace, experts say.

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If an individual suffers an injury on the road through the negligence of a driver, they will recover compensation.

This is because of the provisions within Section 143 of the Road Traffic Act 1988.

Even if there was no insurance attaching to the vehicle, the Motor Insurers’ Bureau would satisfy any unsatisfied Judgment.

But there are numerous cases in which insurers in road traffic accident cases have tried a variety of methods to avoid liability including seeking a statutory declaration, asserting that the insurance policy is only relevant if the policyholder was driving or in the vehicle, and stating that the use of the vehicle was different to that which was insured.

However, in the end, subject to liability, an insurer or the Motor Insurers’ Bureau usually pays.

The position is profoundly and tragically different for victims of accidents at work. Section 1 of the Employers’ Liability (Compulsory Insurance) Act 1969 requires every employer to insure against personal injury sustained by his employees arising out of that employment.

So far, so good. The intention of the Act is clearly to protect employees who go to work and suffer personal injury through no fault of their own. However, unfortunately, there is no equivalent to Section 151 of the Road Traffic Act 1988 for employers’ liability cases.

The insurance policy is not disclosed as a matter of course. The Claimant, naturally, wants to put his or her best case forward both in the letter before action and in the Particulars of Claim.

However, usually, in employers’ liability cases, the breaches relied upon to prove negligence by a Claimant also act as a Defence to an insurer seeking to avoid liability.

Irwin Mitchell was involved in a case which highlights the significant injustice which can arise. The Claimant’s name has been anonymised to protect his identify. He is referred to as “James”.

James was working for a scaffolding company. He fell from height. The reason for his fall from height was because of significant and numerous health and safety breaches by his employer.

Tragically, he suffered from a spinal cord injury. He is paralysed. He has no function in his legs. He retained the use of his arms after many months of rehabilitation.

James’ employer was convicted after an investigation and prosecuted by the Health and Safety Executive. They were fined. They subsequently decided to liquidate the company. A new company was started. In effect, the owners swept what had happened to James “under the carpet”.

James initiated a claim against the liquidated company (before it had been dissolved). After the prosecution, the company’s insurers withdrew indemnity on the grounds that the company had breached the terms and conditions by failing to have a “health and safety policy” which was followed. In effect, the insurer relied upon the company’s breach of duty as a reason to avoid meeting the claim from James. This is the paradox.

The insurer only investigated the company’s health and safety policy when it had a significant financial interest in the outcome.

The whole purpose of the insurance is for the benefit of an employer’s employees. Section 1 of the Employers’ Liability (Compulsory Insurance) Act 1969 specifically states “Insurance against liability for employees”.

However, through no fault of his own, James sustained a spinal cord injury and again, through no fault of his own, the company’s insurer was able to avoid paying him.

James’ case was a particularly devastating one, where the lack of a statutory obligation for an insurer to discharge a third party’s claim, in this case James’ claim, led to profound and terrible consequences.

He recovered some damages because of the tenacity shown, willingness to challenge the status quo, and innovative arguments raised by Irwin Mitchell.

In reality, however, this was heavily discounted to reflect the risks that a Court would find that the company’s insurers were entitled to void the policy. The insurer avoids a significant financial liability.

The owners and the directors of the company move on with a different company.

James, the innocent person at the centre of all of this, is unable to work and is trying to raise a young family with a spinal cord injury.

As I stated in the aftermath of the case, I urge Parliament to protect employees to ensure that if they go to work and suffer injury, particularly serious life-changing injury, they are able to secure compensation from an insurer if the employer does not have the means to pay.

In addition, if an employer does not take out insurance, there should be a body set up to meet claims such as the Motor Insurers’ Bureau for road traffic collision cases. It is inexcusable that James has to live with a spinal cord injury through no fault of his own and with no redress.

This nonsensical inconsistency in employers’ liability cases needs addressing urgently. To add insult to injury (pun intended), on 1 November 2019, the Motor Vehicles (Compulsory Insurance) (Miscellaneous Amendments) Regulations 2019 come into force.

Insurers will no longer be able to seek a statutory declaration after the accident in road traffic cases. In other words, if they are going to void the policy, they cannot do so post-accident in an effort to save them from having to satisfy judgments obtained against their insured or another person using the vehicle to which their policy of insurance attaches.

Once again, there is no such redress for those injured at work, and the paradox continues.

David Withers is a serious injury partner, Joanne Witherington is an associate solicitor and Sarah Parkin is a solicitor, all at Irwin Mitchell.

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Legal

DoLS cases rise, as completion rate improves

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DoLS applications have risen year-on-year.

The yearly number of applications to legally deprive a person of their liberty (DoLS), where they lack the mental capacity to consent to their care or treatment, has risen slightly in England, new figures show.

In 2020/21, there were 256,610 Deprivation of Liberty Safeguards (DoLS) applications – up three per cent on the previous year, versus an average growth rate of 14 per cent between 2014/15 and 2019/20.

DoLS is a legal procedure when an adult who lacks mental capacity to consent to their care or treatment is deprived of their liberty in a care home or hospital, in order to keep them safe from harm.

In England, all deprivations of liberty that take place in a care home or hospital must be independently assessed and authorised by a local authority to ensure they are in the person’s best interests.

The reported number of cases that were not completed as at year end in April 2021 was an estimated 119,740, around 10,000 fewer than the end of the previous year.

More than half (57 per cent) of completed applications in 2020-21 were not granted was 57 per cent. The main reason was given as ‘change in circumstances’, at 60 per cent of all not granted cases.

The proportion of standard applications completed within the statutory timeframe of 21 days was 24% in 2020-21, the same as the previous year. The average length of time for all completed applications was 148 days.

During the coronavirus (COVID 19) pandemic period, some aspects of the DoLS process have changed due to new Government guidance.

This includes greater use of remote assessments and shortened forms.

Read the full report here.

 

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‘This is an exciting time in the future of clinical rehab’

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For seriously injured military personnel, the options around rehabilitation are increasing further with plans for a new National Rehabilitation Centre. Matthew Tomlinson and Rachel Seddon, from the military team at Slater & Gordon, discuss the importance of access to specialist support

For the majority of readers, initial treatment for their serious injury or illness will likely come from our exceptional NHS’ regional acute hospitals. When clinical rehabilitation, to assist those seriously injured is required, it is widely recognised that timely and tailored support is necessary to maximise the potential to return to a quality of life, and minimise further problems down the line. This is significant in relation to an individuals’ physical and mental health. 

Getting people back to a meaningful life and capability following serious injury is a major policy area in Government. Return to work rates for people experiencing serious injury and trauma in England are below rates achieved in other European countries as well as rates achieved in the Armed Forces.

For seriously injured military personnel, the Defence and National Rehabilitation Centre (or DNRC) in Loughborough will already be a familiar part of Defence Medical Services, which comprises, in addition to the national Defence Centre, Regional Rehabilitation Units (RRUs), Units embedded within NHS Trusts, the Royal Centre for Defence Medicine and mental health services such as the DCMH (Departments of Community Mental Health) network. 

The Defence Centre, or DMRC/Stanford Hall as it is known, is the state of art successor to the Ministry of Defence’s former Headley Court facility in Surrey. The facility, which is run by a Commanding Officer alongside uniformed staff and civilians employed by MoD, opened in 2018 and continues to treat and rehabilitate seriously injured members of the armed forces including those with serious neurological and spinal cord injuries.  

In addition, plans to develop a ‘National Rehabilitation Centre’ (NRC) on the Stanford Estate (next to the Defence Centre) are gaining momentum and will be a very welcome initiative bringing world-class clinical rehabilitation for civilian NHS patients, as well as providing a national hub for training, research and development.

Recent reports suggest that, all being well, the green-light should be given later this year for construction of this new facility, with a target for treating patients by 2024. This is an exciting time in the future of clinical rehabilitation and the NRC will extend the success of acute services and established major trauma centres by providing a national centre of excellence in both patient care and innovation.   

The recent and ongoing lessons of COVID-19 are showing the real value of excellent clinical rehabilitation in making a meaningful difference to an individual’s recovery and capability. For example, a specialist three-step rehabilitation programme developed at DMRC has been credited with saving the careers of military personnel with “long- Covid” (shortness of breath, fatigue, low mood and “brain fog”). The BBC recently reported that nearly all of the 150 patients that took part in the programme were able to return to work within three months. 

The plans for the NRC appear to offer a unique opportunity to drive new rehabilitation products and technologies and improve accessible state of the art rehabilitation. The NRC would provide patient care focused primarily on treating patients within the NHS East Midlands region with the potential to treat patients referred from elsewhere in the country similar to the Defence Rehabilitation Model.  

Already, the Defence establishment is acquiring new knowledge through, for example, Computer Aided Rehabilitation Environment and the cohort of patients treated at both the NRC and the Defence facilities must widen the opportunities for clinical research. The NRC facility itself aims to be transformative, leading in the testing and development of future treatments and techniques and the positives that can be derived from the Defence Rehabilitation Model and its collaboration with Defence Medical Services looks likely to bring about meaningful changes to injured individuals’ pathways. 

Good rehab after serious injury is often described as ‘like a relay race’. Taking for example, the experience of our client, Soldier X. X was paralysed from the mid-chest down and would be graded T4 complete ASIA A paraplegic. He suffers from residual neuropathic pain, increased tone, spasms, impaired sensation and loss of power below the mid-chest and loss of visceral function. He has to self-catheterise and manually evacuate the bowels, and within a few years of injury, developed a syrinx, which is, along with syringomyelia, likely to further progress. 

In the immediate aftermath of the injury, he went through numerous intensive and emotionally difficult stages of rehabilitation, including treatment at Stoke Mandeville NSIC. 

During X’s Naval Service Recovery Pathway with Hasler Company, and numerous inpatient stays at DMRC Stanford Hall, he has been able to access tailored rehabilitation which has included hydrotherapy, 1:1 specialist physiotherapy and psychotherapy, and he has had the opportunity to complete successful trials of the ReWalk exoskeleton.  

DMRC Stanford Hall has the feel of a military establishment in one sense and of somewhere very conductive to rehabilitation in a relaxed and personal manner. It has buildings and spaces specially designed to aid the recovery process including gyms, a range of swimming and hydrotherapy pools, a gait lab and “all the elements essential for its clinical purpose”, that is, to rehabilitate the most seriously injured members of the Armed Forces and also, importantly, return those who have been injured in the course of training back to work.

He is making good progress with his physical rehabilitation but acknowledges his ongoing challenges in terms of bowel and bladder care, sexual health and fertility, pressure sores, syrinx management, and mental health and so continuity and quality of care remains vital both now and beyond his medical discharge. In due course, Soldier X will likely engage with the Recovery Career Services which was launched as part of the Defence Recovery Capability back in 2013 with the mission of getting injured and sick personnel competing in the civilian employment market. 

What the current Defence Rehabilitation Model seems to do very well is integrate all aspects of recovery including medical care, welfare, housing, education, reskilling, work placements, employment issues and opportunities. Whilst this remains an ideal care model and one that is decades ahead due to the combined efforts of the Services and the Service charities responding to carefully tailored individual recovery plans setting out a recovery pathway, if the NRC development plans can keep momentum, it presents a very exciting, and similarly patient-led opportunity to build the right environment for successful rehabilitation.

  • For more information about Slater & Gordon’s specialist work with the military, visit here

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The importance of goal setting

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Many of us will be re-assessing our life goals as part of our resolutions as we enter the New Year. For some, the “health kick” will last a few days, for others, slightly longer. On a personal level, we have all heard the rhetoric about setting realistic and achievable goals for ourselves, and being SMART about it. In serious injury litigation, the importance of goal setting is not just limited to the New Year, write David Withers and Kate Venn of Irwin Mitchell LLP.

The case of Kristopher Loughlin (By his mother and litigation friend Barbara Anne Kennedy, formerly Loughlin) v (1) Kenneth Dal Singh (2) Pama & Co Ltd (3) Churchill [2013] EWHC 1641 (QB) is now over 6 years old. Despite being decided so long ago, few cases have had such a long term influence and such a significant impact on serious injury litigation as Loughlin, and the effects of the case continue to be ever relevant for those representing clients in this area. 

In Loughlin, the Claimant sustained a traumatic brain injury in October 2002 when he was a 12 year old child.  By the time the claim was set down for trial to assess the damages to which he was entitled, the Claimant was a young man.  Liability had been established and therefore the value of the claim was the only aspect still in dispute by the date of trial.  

A comprehensive rehabilitation and care package was set up to benefit the Claimant using interim funds obtained via the claim.  The package included very high level professional support and various therapies, and was overseen by a case manager.   

In December 2008, the appointed case manager was aware that the Claimant had poor sleep hygiene. He was going to sleep and waking up at differing times. This had a negative effect on his ability to function. This, in turn, was said to have increased the Claimant’s need for care; he had a 24 / 7 care package. 

In 2012, a sleep hygiene regime was set up. The Claimant made rapid progress once the regime had been instituted. 

The expert neuropsychologists instructed by the parties agreed that the goals set by the Claimant’s multi-disciplinary team were not clearly specified or challenging enough. They raised concerns that the support provision was fostering dependence on support rather than promoting the Claimant’s independence. 

At trial, the care expert instructed by the Claimant gave evidence about the complexities involved in running a care and therapy programme for a young adult like the Claimant. 

Taking into account all the evidence presented, the Court disallowed 20% of the past case management and past care costs sought by the Claimant, which represented a very substantial sum of money indeed.  

In its Judgment, the Court noted: 

“.. in this case the contemporary documentary evidence did not show, first, that the care team recognised, until the problem had become chronic and practically overwhelming, the fundamental importance of addressing the need for a specific and effective sleep hygiene regime, and secondly, that the team took determined steps to implement such a regime, a task that I readily acknowledge would have encountered resistance and would have required skilful and tactful management”. 

“… the Defendant’s primary submission is that I should disallow the costs of past care and management, on the basis that the standard of such care and management fell significantly below that which could reasonably be expected to meet the exigencies of the Claimant’s condition and circumstances. However….. to deprive a Claimant of all compensation for incurring such costs, whatever the shortcoming in their delivery and whatever the benefit received, would be wholly disproportionate and unjust. However, it does seem to me that principle requires that I should take due account of the fact …that the standard of the care and case management services did, in an important respect, fall significantly below the standard that could reasonably have been expected. …..  It appears to me, balancing these factors, that a reduction of 20 per cent in the charges actually claimed would be fair and proportionate”. 

Once he had found that there were shortcomings in the approach to the Claimant’s rehabilitation and care, the Judge essentially had two options:

  1. Allow the costs of past case management and past care in any event on the basis that the Claimant had reasonably incurred them, even if the service had been sub-optimal; or
  2. Reduce or disallow the costs of past case management and past care on the basis that they had not been reasonably incurred by the Claimant.

The Court opted for option 2.

In personal injury litigation, the Claimant is entitled to “full compensation”. In Heil – v – Rankin [2000] 2 W.L.R 1173, the Court summarised the principle as follows:

“The aim of an award of damages for personal injury is to provide compensation. The principle is that ‘full compensation’ should be provided. This principle of full compensation applies to pecuniary and non-pecuniary damage alike. Compensation must remain fair, reasonable and just. The level must also not result in injustice to the defendant, and it must not be out of accord with what society as a whole would perceive as reasonable”.

The Loughlin Judgment was challenged by some in the industry as being unduly punitive on the Claimant, in that he failed to recover compensation for services that he had been provided with and had paid for. He had, after all, followed the advice of professionals and incurred a financial liability as a result.  It was not his fault that those appointed to oversee his rehabilitation and care failed to set proper goals and/or act expediently upon identified problem areas such as the sleep hygiene issue.   However, on the opposite side of the coin, it would have been equally unfair to the Defendant to expect them to pay for services which were found to have had a detrimental impact upon the Claimant’s progress and independence.

In any event, Loughlin served as a warning to those representing Claimants in these cases. Simply because past costs have been incurred, it does not mean they will automatically be recoverable at trial. The burden of proof is on the Claimant to show that costs have been reasonably incurred.  Evidence of the benefit to the Claimant of services such as therapy and case management must be obtained via records, witness statements and expert evidence, in order to ensure a Loughlin type argument is not successfully raised by a Defendant.

Avoiding a Loughlin situation is not just about the presentation of evidence at Trial.  For all those who are involved in these cases, the principle must be borne in mind at all stages, right from the outset when a case manager or therapist is first appointed.  There are a number of key principles and practices that can be adhered to in order to mitigate the risks associated with Loughlin.

For treating therapists and case managers, the best practice approach is:

  1. Identify the short to medium term needs of the Claimant; 
  2. Triage those needs by considering what input would make the biggest difference; 
  3. Clearly document the plan and goals set and, if necessary, include details as to why certain needs are not being prioritised at a particular stage; 
  4. Execute the plan and ensure everybody involved in the MDT is working to the same set of goals;
  5. Regularly revisit the plan and goals set and critically assess what is working and what is not working;
  6. Do not be afraid to change or to deviate from the plan – clearly document the reasons why, if necessary; 
  7. Update the plan if there are material changes and / or after at least 6 to 12 months, whichever is sooner; 
  8. Ask the lawyers whether there is any relevant medico-legal evidence you can have access to or have a discussion about to ensure that what you are doing will be endorsed by the experts in the claim;
  9. Accept that the experts are the individuals whose views matter in the context of the litigation. A good expert should accept that there is a range of service provision and a certain degree of flexibility as to how such a service might reasonably be provided. However, if an expert makes a recommendation, it is worth implementing that recommendation. The Court will be heavily influenced by what an expert’s view is in most circumstances, particularly if it is an expert instructed by the Claimant to comment on expenditure by a Claimant. If recommendations made cannot be followed for good reason, speak to the lawyer and explain why, and carefully document the same;
  10. At all stages, ensure detailed notes are kept of decisions relating to goal setting and planning.  If called to give evidence at trial about why a particular decision was made, it is far easier to refer to contemporaneous notes than to try and rationalise a particular decision on the stand several years later.

For lawyers, the best practice approach is:

  1. Appoint an experienced and trusted case manager.  When considering the appointment, give due thought to the likely complexity of the case, the issues which will arise and the robustness of your chosen case manager should Loughlin arguments be made; 
  2. Finalise medico-legal evidence quickly and use this to influence the rehabilitation programme; 
  3. Flag any concerns raised by the Defendant or the medico-legal experts with the case manager at the earliest opportunity.  Even if there is good reason why a particular report cannot be finalised and disclosed in its entirety, there is no reason why any comments or suggestions made by the expert which are relevant to the case manager cannot be extracted and provided to him/her sooner; 
  4. Be obsessive about goal setting; 
  5. Attend MDT meetings to contribute to and be aware of what is happening “on the ground”; 
  6. Take witness statements from the case manager and the therapists about the goals and about any issues raised by the Defendant or the medico-legal experts; 
  7. Be selective about which medico-legal experts you go to and when. It can become very difficult if you have “too many chefs in the kitchen” with differing opinions on what is reasonably required by the Claimant. 

It is worth remembering: goal setting is for life in serious injury litigation, not just for New Year! They can also be exciting and varied. For example, the authors represent a young man with an acquired brain injury. His personal goals are to get married, buy an albino peacock and become an Olympic bob sleigher! 

The team at Irwin Mitchell are very happy to provide training to healthcare professionals and therapists about the integration of rehabilitation with the litigation process. To enquire about any training sessions, please e-mail David.Withers@IrwinMitchell.com or Kate.Venn@IrwinMitchell.com.   

David Withers is a Partner and solicitor-advocate at Irwin Mitchell LLP, leading a team specialising in neuro-trauma and other serious injuries such as amputations or significant poly-trauma.

Kate Venn is a senior solicitor at Irwin Mitchell LLP, specialising in representing adults and young people with severe acquired brain injuries. 

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