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Wednesday, 26 October 2016

Concerning Time Limits, HMRC Schedules and Elvis Presley

I have a recurring nightmare in which am running to the court with a pile of Claim Forms. It is one of those dreams where the harder you try the slower you run. I get to the court office just as the doors are locked and the sign comes down – ‘TOO LATE’. I turn to see chasing hordes of clients, partners, judges, ATE insurers all baying for my blood…

There is one word that can strike fear into the hearts of litigators – particularly those who act for victims of Occupation Disease. That word is Limitation.

Legal claims for damages are subject to statutory time limits. This is to prevent defendants being subject to claims going back many years where memories fade or documents are lost. Most of the time limits are found in the Limitation Act 1980 which came into force in 1981 – about 35 years ago.
In Accident Claims it is usually 3 years. So if I trip over a pavement today I have until 26th October 2019 to start court proceedings. Easy.

In disease cases the rules are more flexible. Let’s look at cases of noise induced hearing loss. You don’t suddenly become hard of hearing overnight! The Act says that the clock begins to run when a person has sufficient knowledge - ‘.. to justify his instituting proceedings for damages against a defendant who did not dispute liability and was able to satisfy a judgment.’ So the moment somebody knows or should know that they suffer from hearing loss caused by noise then the three years begin. 

Three years seems plenty of time. But time seriously does fly in disease cases for reasons outside the poor victim’s control. 

Firstly there will inevitably be a gap between the date someone has knowledge and the date they go and see a lawyer. Despite rhetoric about a compensation culture most workers are reluctant to pursue claims, especially if they still work for the same employer.  In one case * Dame Janet Smith referred to a year’s ‘thinking time’ from say a doctor’s consultation – although I doubt if she was formulating a hard and fast rule. The reality is that you might be a year or so into your three before you see the client. 

Secondly you have to identify who the client worked for.  This is not easy where someone has been exposed to noise for thirty years with a whole series of employers. Each of those employers might be liable to contribute towards the damages. Many of those employers will have closed down over the years. They may or may not have insurers. So the first task is to obtain a print out from HMRC which sets out a full work history. Back in the 1980s when I first did these claims you would expect to get your print out after about a month. The current waiting time is  about 14 months. Gulp! The clock is ticking remorselessly down and there is little you can do about it. 

Thirdly, having got your print out, you need to laboriously work through this with the client. What work was done at each place of work? Where did the noise come from? What tools/machinery was used? What protection if any, was provided? What health testing was done? What regulations were in force at that particular time? Tick, tick, tick…
You need medical evidence to show that the loss is caused by noise at work. It is question of judgment in each case at what point down the line you incur this costs. But it must be done and it takes time. You will inevitable get to the three years by the time this is done.  Or the three years might have passed before you are ready!

Now the Limitation Act does give the court discretion to disapply the time limit, but no lawyer can rely on that and still sleep at night.

The reality is that at some point you begin the race to the court office – see above. And then you have to pay a massive court fee. If a claim is valued at about £20k then the fee will be £1k. Moving away from hearing loss, some serious cases such as those involving asbestos can involve a fee of £10k. In many cases this is paid just to ensure that you don’t miss the bus.

All of this begs the question – do we need a re-think? 

The world was different in 1981. Things moved more quickly. You did not need a mortgage to pay court fees. Today, you can be almost at the end of the time limit before you get your work history. Discretion is a help but nobody really wants to let the 3 years go by in the hope of getting it.

Of course one option would be a huge investment in HMRC to enable them to process requests more quickly. There are those who still believe that Elvis is alive! 

Another option would be to extend the limitation period to say 6 years in those cases which can take time to investigate – usually Disease or Clinical Negligence.

I quite like the idea of the Spanish option. Limitation is only one year but can be interrupted by sending a letter to the Defendant. So if, before the end of the three years, a Letter of Claim was sent to the Defendant this would enable them, to begin investigations. This would deal with the stale claims dilemma but would avoid the need to incur the cost of embarking on expensive litigation. Those costs are a drain of claimants, defendants and the courts. Litigation might then become a last resort – once all other options are exhausted. 

But whatever option is best, I think we need to revisit Limitation in these cases. Starting court proceedings purely to comply with time limits, under pressure is a drain on the resources of claimants, defendants and the court staff. 

We need to be thinking about this before it is too late….

*Johnson v MOD [2012] EWCA Civ 1505

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