On the Case was compiled by Caroline Elson and published in Stronger, the ALARM members' journal. Caroline, a Senior Associate at Langleys, has acted for councils for over 15 years and regularly presents on a range of issues affecting councils. Caroline is well regarded for her expertise in this area.
Langleys’ Public Sector Team has a strong reputation for providing a technical, quality service that represents best value for clients.
What constitutes ‘use of the vehicle’ for motor insurance claims?
R & S Pilling (T/A Phoenix Engineering) v UK Insurance Ltd (2019)
The Court provided guidance on the meaning of the phrase, ‘caused by, or arising out of the use of the vehicle on the road or other public place,’ and if this extended to damage to property where it was being repaired on private premises.
Mr Holden was employed by Phoenix Engineering and was permitted to fix his own car in the loading bay. The car caught fire and spread to the employer’s premises and the adjoining premises of a third party, resulting in damage in excess of £2 million.
Phoenix paid out in respect of the damage and pursued UKI for an indemnity. UKI sought a declaration that they were not liable to indemnify Mr Holden given the terms of his own policy. Phoenix cross applied for a declaration that the policy should respond.
Under Section 145 of the Road Traffic Act 1988 a policy of motor insurance must provide cover where the damage is: ‘arising out of the use of the vehicle on a road or other public place.’
The issue was whether the vehicle was ‘in use’ under the Road Traffic Act 1988. The vehicle was being repaired when the fire broke out, it was not on the road or in a public place.
Recent European Court of Justice (ECJ) decision expanded the concept of ‘use’ of vehicles to include accidents on private property. However, the Supreme Court decided that the requirement under the Road Traffic Act would apply. A motor policy did not cover fire damage arising from repair work carried out to a car on private land.
UKI succeeded in their application for a declaration that Mr Holden’s motor insurance cover with them did not cover the loss here, where damage had been caused to third party property. It was the owner’s negligence in carrying out the repairs and not the prior use of the car as a means of transport that caused the property damage.
What we can learn
The decision should provide re-assurance to motor insurers. The case raised important questions about the construction of motor policies and the approach when interpreting them.
Challenges to school and supervision of activities
M (A child) v City of York Council (2019) – York County Court
This County Court decision is a case Langleys handled and is helpful when considering defending claims brought by minors following accidents. These can be particularly sensitive for all concerned, but the outcome provides reassurance that where there is a defence it can be maintained.
The accident occurred at a local school for students with learning difficulties. The Claimant was riding an adapted bike which tipped, and the Claimant fell sustaining a fractured arm.
There were factual allegations which were disputed, which included; that the Claimant had not ridden the recumbent bike before and lacked experience and whether the teaching staff had secured the helmet, strapped the Claimant into the bike and provided instructions appropriate to the specific learning needs of the Claimant.
The Judge stated it was understandable that the accident had been significant in the Claimant’s mind, but this had caused the Claimant to be mistaken in the account of the accident.
It was held there was no breach of duty or negligence on the part of the Council and the Claimant had failed to discharge the evidential burden.
It was reassuring to the teachers to hear the Judge concluding that the school staff were fully responsive and attentive to the Claimant’s needs and wanted to provide a good experience. The school had appropriately instructed and supervised the Claimant while using the bike. The claim was dismissed.
What we can learn
The case gives reassurance to teachers that children can engage in a variety of activities if they are assessed, without placing too much focus on a risk averse teaching style. This was a sensible decision which highlighted the importance of keeping written records of training provided to staff and signature sheets,
periodically reviewing risk assessments and their adequacy, keeping accurate contemporaneous notes of the accident circumstances and ensuring witnesses are supported to trial as they are key to defending a claim of this nature.
Pleading fundamental dishonesty early and making an application to strike out
Patel v Arriva Midlands Ltd (1)
Zurich Insurance Plc (2)
The Court upheld an early application to strike out a claim in its entirety for fundamental dishonesty where the dishonesty had substantially affected the presentation of the Claimant’s case.
The Claimant was hit by a bus and as a result went into cardiac arrest and was unconscious. He was diagnosed with a bleed on the brain. He claimed that despite an initial recovery he began to deteriorate within a week of the collision and was significantly disabled. He presented to the neurological experts as mute, unresponsive, without movement in his hands, arms and legs, and unable to communicate.
The Defendant obtained surveillance evidence showed him walking and talking, negotiating road crossings, reading, and displaying manual dexterity in the form of shaking hands, bending over and using door keys. In response to this the Claimant’s family and friends described his condition as ‘variable.’
The Defendant amended the defence to plead that the case be struck out pursuant to Section 57 of the Criminal Justice and Courts Act 2015 as being fundamentally dishonest. The Claimant maintained that the Court should hear all the evidence first.
The Judge was satisfied that a Section 57 application may be determined at any time. Whether it could be properly determined before a quantum trial depended on the circumstances of the particular case. The Court concluded that the diagnosis of a severe conversion disorder was not tenable, and the Claimant was fundamentally dishonest. As that represented the bulk of the pleaded claim value, the court found in favour of the Defendants. The Claimant’s dishonesty had substantially affected the presentation of his case, which potentially adversely affected the Defendant in a significant way. The entirety of the claim was dismissed.
What we can learn
It is important to bear in mind that an application can be made where there is supportive evidence to do so, even in the earlier stages of proceedings, even before filing a defence, thereby containing costs.
On the case was published in Autumn 2019 stronger, ALARM's member journal. ALARM is a membership organisation run by members, for members, supporting risk professionals that support our communities and citizens. For more information, please visit alarmrisk.com