Testing times for the travel industry

There can be no doubt that these are testing times for the UK travel industry, with rising unemployment, the weak pound and the Summer weather forecast just some of the factors tempting the consumer to stay at home for a 'staycation' this year.

The swine flu epidemic is clearly a major additional concern for holidaymakers and the travel sector. Various British airlines, including British Airways and Virgin Atlantic, have already adopted measures to stop people with possible symptoms from travelling, whilst some travel insurers are also refusing to offer cover for passengers who are refused access to their flight.

Whilst activity type holidays and trips to certain destinations such as Turkey, Egypt and Bulgaria remain popular, most holiday companies and tour operators are hoping for a late bookings surge for the Summer season. There is also a real concern for travel insurers that holidaymakers might decide against travel insurance in an effort to save money, despite the obvious risks that something may go wrong.

Quite aside from these difficulties, the legal landscape also paints an uncertain picture as travel lawyers get to grips with the application of Rome II in practice. As the dust settles, we are continuing to keep a close eye on the court's interpretation of this newly implemented EU Regulation and its application in practice so as to ensure our clients are properly advised regarding the most appropriate jurisdiction for their claim.

To find out more, please contact Mark Lee

Damages under French law – the latest position

The application of EC Regulation 864/2007, otherwise known as Rome II, has once again moved the goalposts for those who have the misfortune of suffering accidents abroad and wish to pursue a claim in this jurisdiction.  In a nutshell, Rome II provides that the quantification and assessment of damages ordinarily falls to be determined by the law of the country where the accident takes place. In the majority of such cases it is therefore now necessary to produce evidence from foreign lawyers so the English judge understands how the claim should be quantified according to the applicable foreign law.

Despite the application of Rome II, in many cases it will still be beneficial for English claimants to bring their case before their home courts.  Not only will it be logistically more convenient, in terms of attending medical assessments for example, there will be the added benefit of being able to recover legal costs upon the successful conclusion of the claim.  As English lawyers, we will need to work even closer with our European colleagues so that we remain alert to any changes to relevant local laws to ensure that our clients' best interests are served at all times. 

We receive a significant number of instructions regarding accidents in France and this is a particular area of specialism for me as a French speaker. In light of the recent changes, this article therefore outlines how claims will be quantified in accordance with French law, by way of comparison with English damages.

Historically, the level of damages awarded in France has been considered by many English claimants to be rather less than generous.  However, in recent years, the situation there has changed.  Whilst damages awards are still generally lower than one might expect to receive in this country, they have, on the whole, increased.  This is primarily as a result of the Dintilhac reforms, which followed a judicial review of the available heads of damage in France and how those heads should be quantified.

Much like in England, awards tend to be divided into pecuniary and non-pecuniary damages.  The latter can only be quantified following input from a medico-legal expert who will be specifically trained for this purpose.  Unlike England, however, there is less reliance upon lawyers having to interpret the report and then finding relevant case law to assist with quantification.  The medical report will conclude by providing various points and percentages under various headings and they can then be cross-referenced with tables produced by the courts in each region to provide a range of available damages.  The headings for non-pecuniary damages generally include:

Temporary functional deficit – this is the period following the accident during which the claimant's activities of daily living are most affected and is documented as a period between two dates.  It is generally accepted that lost earnings are recoverable throughout this period.  In addition, an award of around €20 per day is allowed to reflect the pain endured throughout this period.  This can also be broken down into percentages to reflect the reducing level of incapacity as recovery is achieved.

Pain and suffering endured – this is as it says.  It is assessed on a scale between 0 and 7, with 7 being the worst pain one could possibly imagine.

Temporary disfigurement – this is awarded to reflect any physical alteration in appearance occurring prior to the date that the injuries consolidate.  It is again assessed on a scale between 0 and 7.

Permanent functional deficit – this is assessed as a percentage and provides an indication of the claimant's permanent incapacity as a result of the accident.

Loss of amenity – this is assessed on a scale between 0 and 7 and reflects the extent to which the ongoing symptoms affect the claimants ability to partake in leisure activities, sports etc.  The age and lifestyle of the claimant are usually taken into account when assessing this head of claim.

Permanent disfigurement – this is again assessed on a scale of 0 to 7 and reflects any alteration in physical appearance which is unlikely to improve, such as scarring or a permanent limp.

Sexual prejudice – this is assessed on a scale between 0 and 7 and reflects the extent to which the injuries have affected the claimant's sex life, including decreased libido, impotence and fertility.

In addition to the above, there are various recognised heads of damage for economic loss.  It is important to bear in mind that French insurers, and indeed French courts, are usually meticulous when it comes to supporting documentary evidence.  It is essential that any claimant is advised of this at the outset of their claim to ensure that they retain any relevant papers.  The available heads of damage for economic loss generally include:

Medical expenses – including treatment and pharmaceutical expenses ordinarily covered by social welfare agencies (such as the NHS).  Such costs to be reimbursed to the payer.

Miscellaneous expenses – including various out of pocket expenses such as public and private transport costs, damaged clothing, telephone calls etc.

Actual lost earnings – these are recoverable up to the date of consolidation, which will be determined by the medico-legal expert and usually follows the end of the last period of temporary functional deficit.  An employer also has a direct action against the responsible party for any sums paid to an employee during their absence.

Future medical expenses – these are payable provided they are supported by both documentary evidence illustrating the potential cost and medical evidence confirming the necessity.  They include replacing items such as wheelchairs and prosthetics for example.

Future housing/adapted vehicle – if the injuries are sufficiently severe that the claimant would require their home or vehicle to be modified then such costs are recoverable, but must be assessed by an expert in this field.

Help from a third party – any care and assistance which is deemed to be required is payable at a rate of between €15 and €18 per hour, depending on the qualification of the person providing the care.  This is recoverable even if the care is provided gratuitously by a family member.  For claimants requiring care into the future, this can be paid either as a lump sum, discounted to reflect capitalisation, or as an ongoing annuity.

Loss of future earnings – this is to reflect the difference between a claimant's earnings prior to the accident and those after.  It also includes any loss of pension due to reduced contributions.  The sum will usually be discounted to take into account capitalisation.

Loss of opportunity on the open labour market – if a claimant is unable to seek similar alternative employment as a result of the injuries sustained, then an award may be made to reflect this.

Educational prejudice – if a claimant achieves grades lower than would otherwise have been the case as a result of the accident, this can be compensated by between €3,500 and €10,000 depending upon the level of the qualification and the overall consequences of the loss.  If an accident causes a student to retake a year then compensation is paid for that year at between 50% and 100% of the French minimum wage.

In summary, whilst it is not ideal for an English claimant to have their claim assessed by French law, it is clear from the above that reasonable compensation is available where genuine loss has been suffered. It remains to be seen quite how English courts will actually assess these claims in practice, but we will keep abreast of developments and provide a further update in due course.

To find out more, please contact Kieran Mitchell

Shipping cases – Admiralty or county court?

The recent case of Klieve v TUI UK Limited (2009) has caused potential problems for claimant solicitors and a headache and certainly more work for the High Court for cases concerning personal injury claims arising out of accidents on ships.

In Klieve v TUI UK Limited, the judge agreed with the defendant that pursuant to the Civil Procedure Rules (CPR) 61.2, the county court did not have jurisdiction to hear an Admiralty claim.

CPR 61.2 states that claims under the Merchant Shipping Act 1995 or claims for 'any loss of life or personal injury sustained in consequence of a defect on a ship, or equipment, or in consequence of a wrongful act, neglect or default of (1) the owners, charterers or persons in possession or control of a ship; or (ii)  the master of crew of a ship, or any other person for whose wrongful act, neglects or defaults, the owners, charterers or persons in control of a ship, in the loading, carriage or discharge of goods on, in or from the ship, or in the embarkation, carriage or disembarkation of persons on, in or from the ship' must be started in the Admiralty Division of the High Court.

Whilst the county court decided that it did not have jurisdiction to hear the claim, the judge refused the defendant's request that the action be struck out, preferring to transfer the case to the High Court for further directions.

We have recently dealt with a case in similar circumstances. However, the relevant county court in this case agreed with our submissions that under The County Courts Act 1984 -  section 27 Admiralty jurisdiction subsection (6) – 'If, as regards any proceedings as to any such claim as is mentioned in subsection (1), the parties agree, by a memorandum signed by them or by their respective or agents, that a particular county court specified in the memorandum shall have jurisdiction in the proceedings, that court shall, notwithstanding anything in subsection (2) or in rules of court for prescribing the courts in which proceedings shall be brought, have jurisdiction to hear and determine the proceedings accordingly' and further to the courts case management powers and in particular CPR 3.10 in regard to procedural errors that they could assume jurisdiction to hear the claim with the consent of both parties.  

However, there is no guarantee that every county court will adopt this approach so any claims involving personal injury arising from accidents onboard ships should be commenced in the Admiralty Division of the High Court.  We are sure the High Court did not envisage dealing with these types of cases (although in reality it will simply transfer them to the appropriate county court) so this may call for a redrafting of the relevant Civil Procedure Rules.

To find out more, please contact Keith Dean

Is it possible to agree an extension for the service of proceedings?

Once a case has been issued with a claim form, it ordinarily has to be served within four months of the date of issue, unless the court applies its discretion to extend the time for service. The rules are a little more generous for proceedings which are to be served abroad, allowing a six month period from the date of issue for service on the foreign defendant.

Although it is usually possible to arrange service within these time frames, it may sometimes be difficult to do so. Furthermore, in certain instances the case may be close to settlement and the parties might therefore prefer to agree a short extension for the date of service to allow them to negotiate.

It is usually necessary to apply to the Court for permission to extend the relevant time limits for service. This can be a lengthy process, and taking into account the relatively short time frames, may cause difficulties for lawyers if time is running short.

The rules governing litigation procedure are contained within the Civil Procedure Rules. Rule 2.11 specifically states that time limits can be varied between parties by the written agreement of the parties unless the rules or a practice direction provide otherwise or a Court Order rules otherwise.

The question of service is governed by CPR 7.5 and there is nothing contained in this which precludes any agreement between the parties regarding an extension date for service.

Furthermore, in the recent case of Thomas v Home Office, it was confirmed that the parties can agree an extension of time for service pursuant to CPR 2.11, provided this is confirmed by both parties in writing and a specific final date for service is agreed.

It therefore appears that provided both parties agree a specific date for service, and agree this in writing, the time for service of the claim form can be extended without the need to apply to the court. 

The counsel of perfection is of course to ensure that proceedings are served either with the claim form or as soon as possible afterwards to avoid possible complications. However, in certain circumstances, when necessary, extensions may be agreed between the parties. 

To find out more, please contact Joanne Wylie

The credit card conundrum

Will the decision of Office of Fair Trading v Lloyds Bank open the floodgates for compensation claims for accidents abroad against credit card suppliers?

In light of the position of Office of Fair Trading v Lloyds Bank [2008] [1 All ER 2005], a holidaymaker may pursue a compensation claim against his or her credit card supplier in the UK, if an accident occurs during the course of part of the holiday which was paid for by credit card.

This principle only extends to the holidaymaker who paid for the holiday on their credit card.  It will not, for example, therefore be possible for family members to claim against the credit card supplier for injuries and losses resulting from an accident abroad - it is instead only the card holder who may make a claim.

This principle also extends to excursions which are paid for by credit card whilst on holiday, even though the transaction occurs abroad, provided the cost of the excursion exceeds £100.

Section 75 of the Consumer Credit Act 1974 allows a consumer to pursue a compensation claim against the credit card company for breaches by a supplier in respect of a breach of contract.  By way of an example, if an English holidaymaker paid for his accommodation at a hotel, and then suffered injury at that hotel, then the credit card holder is, in principle, able to pursue a claim against the credit card supplier in the English courts.  However, it will evidently be very difficult for credit card companies to defend these types of claims because they will usually have no real relationship with the supplier (ie the hotel), and it is therefore unlikely that they will be able to obtain any evidence to rebut the credit cardholder's allegations of negligence against the supplier.

Prior to the case of Office of Fair Trading v Lloyds Bank [2008] [1 All ER 2005], it was not clear whether it was possible for a consumer to pursue a claim against a credit card company for a breach by a supplier, for those cases when the relevant transaction occurred abroad.  This point was ultimately decided by the House of Lords, which concluded that Section 75 of the Consumer Credit Act 1974 was not limited to domestic supply transactions.  The House of Lords recognised that the effect of this ruling would be to 'impose irrecoverable losses on card issuers', but considered that the card issuers were better able to bear those losses than card holders.

Despite the insurers' concerns, we have to date only handled a few cases involving claims against credit card suppliers as a consequence of an accident abroad.  For those claimants who are lucky enough to benefit from the recent House of Lords' decision, it is something of a 'lucky jackpot', because it is very difficult for the credit card supplier to defend the case due to the evidential difficulties it faces with its suppliers.

To find out more, please contact Hannah Wilson

At home and abroad

In addition to the travel law team, Penningtons is also able to offer legal assistance for individuals who suffer injury in the UK. These cases are handled by our highly regarded personal injury and clinical negligence team. 

For further information, please click here.