Public Authority Liability Update - Insurers Must Pay Higher Success Fee In NIHL Claims

The meaning of disease under CPR 45

Dalton v British Telecommunications Plc [2015] EWHC 616 (QB)

The facts

In costs proceedings in relation to four separate claims brought by former employees, the court was required to determine a preliminary issue in relation to the success fee payable by the employer, BT.

Although the rules changed on 1 April 2013, success fees are still recoverable where a CFA was entered into before that date. Under the old CPR r45, where a claim is for a "disease", a success fee of 62.5% will be recoverable if the claim settles before trial. If it is not a disease, it will be classified as an injury and (if sustained on or after 1 October 2004), it will attract a success fee of only 25%. The issue in this case was whether Noise Induced Hearing Loss (NIHL) is a disease or an injury.

Held

The Defendant sought to rely on the earlier decision of Patterson v MoD in which it was held that, applying the "natural and ordinary meaning" of the word, non-freezing cold injury (NFCI) was not a disease.

However, Phillips J held that, taking into account legislative history, there is a strong indication that Parliament intended "disease" in CPR r45 to "include any illness (whether physical or physiological), disorder, ailment, affliction, complaint, malady or derangement other than a physical or physiological injury solely caused by an accident or other similar single event". Noting that his conclusion differed from that of Males J in Patterson, the Judge added: "but it does not appear that the lengthy legislative history, nor its relationship with the current Pre- Action Protocol, was drawn to his attention". Nevertheless, there are now two conflicting High Court decisions on the definition of disease in CPR r45.

The Judge went on to say that even if he was wrong about the meaning of "disease", "it is nevertheless entirely clear, in my judgment, that the term (however it is defined) must be taken to include NIHL". That was because of the legislative history relating to NIHL as well as the fact that "NIHL is not merely an occupational disease but is...