Boreham v Burton [2012] EWHC 930 (QB)

Case No HQ10X03973[2012] EWHC 930 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
Venue Royal Courts of JusticeDate Tuesday, 20 th March 2012
Before
HIS HONOUR JUDGE McKENNAB E T W E E N:
Between
SAM BOREHAMClaimantDEBORAH JANE BURTONDefendant__________Transcribed by BEVERLEY F. NUNNERY & COOfficial Shorthand Writers and Tape TranscribersQuality House, Quality Court, Chancery Lane, London WC2A 1HPTel: 020 7831 5627 Fax: 020 7831 7737info@beverleynunnery.com__________MR. R. WEIR QC (instructed by Irwin Mitchell) appeared for Claimant.MR. N. HEATHCOTE-WILLIAMS QC (instructed by Greenwoods) appeared for Defendant.__________J U D G M E N T
[1]Today is listed for the approval of terms of settlement which were negotiated by leading counsel for the parties at a roundtable meeting on 3rd February 2012. The court is required to approved the terms of settlement in this particular case as the claimant, Sam Boreham, is a protected party.[2]As is usual in such cases, I have been provided by Mr. Weir QC for the claimant with a detailed advice on the proposal, so far as settlement is concerned, and he commends the terms of settlement to me. I have also been provided with a report from Mr. Tomlinson of IM Asset Management, since an aspect of the proposed settlement is a periodical payment order for the rest of Sam Boreham’s life. I have no hesitation in formally approving the settlement figures, which seem to me to represent a very good outcome for this claimant.[3]One of the matters that I have to be satisfied about when approving a settlement is that the continuity of periodical payments is reasonable secure, pursuant to s.2(3) of the Damages Act 1996 (“the Act”). I understand that initially, at least, at the roundtable meeting, leading counsel for the defendant raised the issue as to whether or not the two insurers involved in this case - Direct Line and Aviva Insurance - would be secure within the terms of s.2 of the Act as the accident had occurred in 1998 before the coming into force of the Financial Services and Markets Act 2000.[4]During the course of this morning, Mr. Weir has taken me through a number of what can only be described as labyrinthine provisions which I have sought to follow as Mr. Weir has taken me through them. They involve the Financial Services and Markets Act 2000 (Transitional Provisions, Repeals and Savings) (Financial Services Compensation Scheme) Order of 2001 (“the 2001 Order”) and the FSA Handbook Compensation Rules.[5]If I understand the position correctly, section 213 of the Financial Services and Markets Act 2000 provides that the FSA must, by rules, establish a scheme for compensating persons in cases where relevant persons are unable or unlikely to be able to satisfy claims against them. This scheme is known as the Financial Services Compensation Scheme. Section 213(9) defined a “relevant person” as a person who was “an authorised person at the time the act or omission, giving rise to claim against them took place”. In this case, of course, the time of the act or omission was 1998 when the road traffic accident took place. An authorised person is a person who has a Part IV permission to carry on one or more regulated activities (s.31) and permission is obtained from the FSA, so plainly can only be given after the FSA came into being with the commencement of the 2000 Act hence the concern. That concern has, however, been alleviated by the 2001 Order.[6]Article 12 provides that:
“Subject to Article 9A, notwithstanding anything in Part XV of the Act, a person (‘the applicant’) may after commencement make an application to the scheme manager for compensation under the new scheme as modified by rules made by the Authority under paragraph (3), if: (a) The application is made in respect of the inability (or likely inability) of (ii) an authorised insurer to satisfy a claim made against him by the applicant in respect of liability under a policy of insurance.”
An authorised insurance company means a person who was, at any time before the commencement of the 2000 Act, authorised under section 3 or 4 of the Insurance Companies Act 1982 to carry on insurance business of any class in the UK (Article 212). Article 12(3) provides:
“The Authority must make rules modifying the new scheme to enable the scheme manager to receive, assess and determine applications for compensation made in accordance with this article.” (ii) an authorised insurer to satisfy a claim made against him by the applicant in respect of liability under a policy of insurance.”
[7]The relevant rules are the FSA Handbook Compensation Rules which are abbreviated by the FSA to “Comp”.[8]Comp 3.2.1 provides that the FSCS may pay compensation to an eligible claimant if it is satisfied, amongst other things, the claim is in respect of a protected claim. Comp 5.2.1 provides that a protected claim is a claim under a protected contract of insurance. Comp 5.4.1 provides that a protected contract of insurance is, if issued before commencement, a contract of insurance within comp 5.4.5(R). This provides that if, after commencement, a relevant person is declared in default, then a contract of insurance issued by that relevant person before commencement which is within comp 5.4.5(R)(2) is a protected contract of insurance provided that the relevant person was not a member at the time the contract of insurance was issued and at the earlier of the events in (1) that is the date of issue of the contract of insurance, it was a “United Kingdom policy” for the purposes of the Policy Holders Protection Act 1975.[9]Comp 5.4.5(R)(2) states that the contracts of insurance referred to are, amongst others, a relevant general insurance.[10]In this case the defendant’s insurer is Direct Line and, at the time of the accident, was an authorised insurer under the 1982 Act and the road traffic policy in question would have been a United Kingdom policy for the purposes of the 1975 Act. It therefore follows that the insurer is covered by the FSC Scheme, even though the liability pre-dated the establishment of this scheme.[11]In those circumstances, I can be satisfied that the necessary level of continuity of payments is reasonably secure.[12]As a fallback position, the statutory instrument requires the FSA to do this and, therefore, even if I were to be wrong about that, there is nevertheless a requirement, which can be enforced. Therefore, for this reason too, I can be satisfied that the continuity of payments is reasonable secure.[13]In those circumstances, I have no hesitation in formally approving the terms of the settlement being satisfied as I am of all the various matters that I have to be satisfied.[14]There is one issue between the parties on the terms of the draft order and that relates to whether or not and, if so, what figure should be provided by way of an interim payment on account of costs. I am told by leading counsel for the defendant that at or shortly after the roundtable meeting, a request was made for a breakdown of the claimant’s costs, but no such breakdown was forthcoming; and it is only this morning that leading counsel for the claimant, on instruction, has notified his opponent and indeed the court that the headline figures for work in progress, disbursements and counsel’s fees are respectively £290,000, £58,000 and £32,000 making a grand total of £382,000 before uplift - this being a conditional fee funded case. It is unfortunate, as it seems to me, that the claimant’s solicitors have not provided a breakdown in a little more detail than those bold figures before this morning, not least because it is in the interests of the claimant’s solicitors to secure as significant an interim payment as can reasonably be awarded at this stage. Be that as it may, all I have are those bold figures.[15]In those circumstances, leading counsel for the defendant urges me not to make an order for an interim payment, notwithstanding (as he puts it) that it is in his client’s interests to pay a contribution towards the claimant’s costs at an early date because of the effect of the CPR 40.8 as it was held by the Court of Appeal in a recent case that interest generally will run from the date of the order. I am not persuaded by that argument on any view in a case of this type. The sum sought in the draft order of £75,000 is a relatively (I hesitate to use the word “modest”, I do not think one can say £75,000 is modest) conservative sum relative to the likely overall costs. There is no danger, in my judgment, that by making an award of this amount I would in any way be ordering anything other than a reasonable proposition. Clearly, it is in the claimant’s solicitor’s interests to serve a detailed costs schedule sooner rather than later.[16]For these reasons, therefore, I accede to the claimant’s application for an interim payment on account of costs in the sum of £75,000 and so will approve the form of the order which provides for that. ___________________