Success fees in disease claims

This article was originally published in September 2012. A sequel dealing with the later High Court decision in Patterson v Ministry of Defence may be published in due course.

An ongoing issue in the context of assessment of costs and disease claims is the correct approach to construction of Rule 45.23 of the Civil Procedural Rules, where the underlying claim is one of acceleration or exacerbation of a pre-existing condition.  Two recent cases indicate how, at the moment, the balance of authority is now starting to favour the position of the paying party.

Fountain -v- Volker Rail Limited (Central London County Court 24th August 2012)

On 24th August 2012, his Honour Judge Mitchell sitting with Master Hurst as his assessor handed down Judgment in the paying parties’ appeal from the decision of Master Howarth on the 11th April 2011. The judge concluded that the Master had wrongly allowed a success fee of 100% instead of 27.5% and allowed the appeal.

As the Learned Judge noted when the matter came before him, the issue was as follows:

“The point that was at issue was whether or not the claimant’s condition in this case could be described as a disease so that the protocol relating to disease is applied and the success fee would be 100% as opposed to the 27.5%, which is the success fee for employment liability claims.  The claim arose in this way.  The claimant was required to carry large bags of stone, concrete and shingle down to his work upon the tube system at night.  He had to carry the items which were very heavy because the electricity was cut off and he was unable to use the lift.  During July 2006 he a bout of pain, he was unable to complete his shift and was absent for nearly 6 months with back symptoms.  After his return to work in January 2007, he suffered a recurrence of the back injury in April 2007.  The claim referred to repeated lifting between January and April 2007.”

The Learned Judge noted at paragraph 4 of his judgment the effect of the medical evidence in this case.

The injury sustained is set out in the report of Mr. A.H Osborne, Consultant Orthopaedic Surgeon, dated the 10th February 2009.  The doctor also answers some questions in a letter dated 15th March 2010.  The doctor noted early disc degenerative changes in the MRI scans and bulging at L4/5 and L5/S1.  The most significant changes appear to be lateral recessed stenosis at L4/5 on the right causing pressure on the nerve root.  In other words, he had a pre-existing condition of degeneration of the spine.  The degenerative disc disease at two levels in the lower back would account for the periodic pains of sciatica down his right leg.  He agreed that the heavy lifting in July 2006 had caused the acute onset of symptoms.  It had been confirmed that the claimant might develop increasing degenerative disease in the lower lumbar spine and require fusion surgery but he thought that unlikely.  Although he could return to work with the heavy lifting, he might have problems after the age of 60 as a result of the pre-existing condition.  In the letter he confirms that this was self-limiting injury and the claimant did have a probable pre-existing degenerative disc but this is not surprising in someone of his age.”

As the Learned Judge continued at paragraph 5:

“In other words because of the pre-existing degenerative condition, the heavy lifting had produced symptoms in his back…..”

At first instance before Master Howarth, that Learned Cost Judge had decided that this was a disease case and justified an award of 100%.

That conclusion was challenged by the paying party on appeal.  Rule 45.23 says this:

(1)Subject to paragraph (2) this Section applies where – (a) the dispute is between an employee  and his employer and (b) the dispute relates to a disease with which the employee is diagnosed that is alleged to have been contracted as a consequence of the employers alleged breach of statutory or common law duties of care in the course of the employees employment; and (c) the Claimant has entered into a funding arrangement of the type specified in Rule 43.2(1)(k)(i).

(3)For the purpose of this Section –

(a)Type (A) claim means a claim relating to a disease or physical injury alleged to have been caused by exposure to asbestos;

(b)Type (B) claim means a claim relating to –

(i)Psychiatric injury alleged to have been caused by work related psychological stress; (ii)A work related upper limb disorder which is alleged to have been caused by physical stress or stain, including hand/arm vibration injury; and

(c)Type (C) claim means a claim relating to a disease not falling within either type (a) or type (b).

In a nutshell, the arguments put forward on behalf of the paying party hinged upon what construction could properly be given to the words “disease” and “contracted”.  The Learned Judge commented at paragraph 10:

“Mr. Hogan then goes on to submit that what is required here is for the Court to construe “disease” and “contracted” in CPR 45.23 (1)(b) in common sense manner consistent with the meaning of those words.  Mr. Hogan then goes on to refer to the shorter Oxford English Dictionary and the definition of “disease”, which is:-

“A disorder of structural function in an animal or plant of such a degree as to produce or threaten to produce detectable illness or disorder; A definable variety of such a disorder, usually with specific signs or symptoms or affecting a specific location; an illness, a sickness.”

As regards “contract” that is defined as:-

“Become infected with, catch (disease, illness)”. 

He submits that passages in Bennion on statutory interpretations support the use of dictionaries, (pages 1221-1222) although there is an anecdote the contrary from one famous law lord who is now deceased.”

In conclusion the Learned Judge said at paragraph 20:-

“It has to be noted that this argument about disease is fact sensitive.  As I have already indicated I have taken on board Mr. Moore’s point that classification and definitions are shifting and have shifted.  In the context of this case it is the view of this Court that Master Howarth was wrong in concluding that it was a disease in the sense it was a work related disorder.  This was a claimant who had a degenerative spine whose condition was worsened as a result of a series of occurrences when he was carrying weights, which were far too much for him.  The fact that this was not just one occurrence but it was a series of occurrences does not make it a “disease” but in the meaning of the word as defined in the personal injury protocol.  Master Hurst was right when he posed the situation to Mr. Moore in an argument that one incident was physical injury does that mean that two incidents amounted to a disease?  It seems to me that question exposes the fragility of the Respondent’s submissions notwithstanding how well they were made.  In my Judgment Mr. Hogan is right; this case starts with a definition of “disease” and “contracted”.  By no stretch of the English language could it be said in this court’s judgment that this was disease or that it had been contracted.  The medical evidence in our view is conclusive to establish that this was a physical injury.  Accordingly, as Mr. Hogan has submitted this case is governed by CPR 45.20(1) and not by CPR 45.23.”

This case is proceeding to the Court of Appeal. It has been listed to be heard with a similar case, that of Bird -v- Meggit Aerospace Limited a decision of Regional Costs Judge Hale handed down on the 22nd June 2012, has already been transferred to the Court of Appeal utilising the “leapfrog” procedure.

Bird -v- Meggit Aerospace Limited (Nottingham County Court 22nd June 2012)

This was a reserved decision of District Judge Hale, sitting in the Nottingham County Court as a Regional Costs Judge, and the facts of the case may be briefly stated.  The Learned District Judge noted at paragraph 3 as follows:

The claimant was employed by the defendant as a moulder in its factory premises in Shepshed near Loughborough.  In the course of his employment he was required to carry out various manual handling operations most of which involved manipulation and transportation of moulds, which weighed 400 or 500 kilograms.  The claimant alleged that he sustained injury by reason of the ongoing heavy and repetitive nature of his work procedures and the claimant suffered symptoms of pain in his back, left shoulder, elbow, knee and arm.  The Particulars of Claim specifically plead that the claimant suffered an injury to his back and left shoulder, elbow, knee and arm and reliance is placed on the annexed report prepared by a Consultant Hand and Orthopaedic Surgeon, Mr. Downing.”

District Judge Hale summarised Mr. Downing evidence as follows:

Mr. Downing’s evidence is of crucial significance in the context of this particular issue.  He diagnosed non-specific bilateral muscle strain causing shoulder pain and left lateral epicondylitis or tennis elbow.  Mr. Downing was unable to give a specific diagnosis for the shoulder pain and found a relationship between this pain and the Claimant’s work was not entirely clear, as the symptoms appear to have commenced prior to his requirement to manipulate heavy steel moulds.  As for the tennis elbow, Mr. Downing had this to say at page 12 of his report:

Tennis elbow is a common constitutional condition of degenerative pathology.  It is not an inflammatory condition nor is it a condition of the epicondyle: it is an enthesopathy i.e., a degenerative condition of the common extensor origin at the lateral aspect of the elbow.  It is a common condition in middle age and arises through a constitutional degenerative process that is not caused by work.  It is not a prescribed disease.  The lack of inflammation biopsy specimens taken at surgery (Boyer and  Hastings 1999) for tennis elbow strongly supports the view that tennis elbow is not a response to either acute or repetitive trauma.  Further, there is no epidemiological evidence that tennis elbow can be pathologically caused by any particular work activity.  However, it is commonly agreed, and in my opinion entirely reasonable to conclude that forceful gripping in the presence of tennis elbow is likely to lead to exacerbation of symptoms.  It is therefore reasonable to conclude that if Mr. Bird developed constitutional tennis elbow then aspects of his work which involved forceful gripping, would lead to exacerbation of symptoms.  However, the fact that Mr. Bird was off work for several months, yet symptoms persisted, would indicate that his work was not entirely responsible for his symptoms.”

The issue in the case then was whether this was an employers liability claim attracting a modest success fee or whether it was a disease claim attracting an award of 100%.  The arguments that were deployed on behalf of the paying party were similar to those utilised before his Honour Judge Mitchell.  At paragraph 16 of his Judgment the Learned District Judge said this:-

“I have considered whether an aggravation or worsening of symptoms can be regarded as a disease as usually understood and defined.  I am satisfied that they cannot be so regarded.  Mr. Bird sought and recovered compensation for increased pain caused by gripping and engaging in heavy manual handling.  These actions did not cause a disorder of function or structure producing illness or symptoms (as a said disease).  The disorder and indeed the symptoms were pre-existing and only the symptoms were temporarily worsened.  Furthermore, it was never alleged nor could it have been that the prognosis or pathology of the conditions were affected in any way by the claimant’s work.  I am satisfied that the claimant was not suffering from a disease that was alleged to have been contracted as a consequence of his employers breach of duty and therefore his claim does not fall within the scope of Part V.  I believe I have arrived at that conclusion having applied the correct approach to interpretation of the rule.  Interpretation does not create an absurd result, it does not offend against the purpose of the rule which contemplates that some cases will attract higher success fees and some will attract lower fees.  Furthermore the object of achieving certainty and clarity is, I believe, better advanced by the construction contended for by the defendant than that contended for by the claimant.”

An appeal has been lodged against the decision of the District Judge.  His Honour Judge Barrie sitting in the Nottingham County Court has directed that the case be transferred to the Court of Appeal utilising the “leapfrog” procedure.

It remains to be seen when this matter will come for hearing before the Court of Appeal and some useful and binding guidance handed to Cost Judges who are grappling with cases of this nature on a daily basis.

Andrew Hogan was instructed by DLA Piper LLP on behalf of the paying party in Fountain -v- Volker Rail and is retained on behalf of the paying party by Berrymans Lace Mawer LLP in the case of Bird -v- Meggit Aerospace.

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