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Claims club - November 2016, Exeter

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Part one of this seminar covered asbestos claims. Whilst the use and handling of asbestos is highly regulated today, local authorities are having to deal with the legacy of claims that arise from a time when asbestos was not properly controlled in working, school, housing and leisure environments. The second part of this seminar focused on the General Data Protection Regulation and how will it impact insurance teams.

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Claims club - November 2016, Exeter

  1. 1. Claims club November 2016, Exeter
  2. 2. Asbestos claims What do you need to know? David Maggs
  3. 3. Mesothelioma claims Represent about 80% of the cost of asbestos based claims to the insurance industry Mesothelioma is a type of cancer that develops in the lining that covers the outer surface of some of the body's organs (often the lungs). It is linked to asbestos exposure.
  4. 4. Mesothelioma Typically develops more than 20 years after exposure to asbestos.
  5. 5. Mesothelioma claims - what is changing? • 2002 – 1,600 claims • 2006 – 2,500 claims • 2010 – 3,250 claims • 2014 – 3,500 claims Recent experience shows a stable but increasing notification trend of claims The increases in claims notified appears to be slowing down
  6. 6. Mesothelioma claims – what’s changing – average costs 2002 - £69,000 2006 - £75,000 2010 - £87,500 2104 - £97,500 Inflation is running at about 3-4% per annum Paid at nil are running at between 21% and 23%
  7. 7. Mesothelioma – what’s changing – Claimant age at notification 2002 – 67 2006 – 69 2010 – 73 2014 – 74 Which means that you are dealing with older claims for your authority (or a predecessor authority)
  8. 8. Mesothelioma claims – what’s changing - % of living Claimants 2002 – 20% 2006 – 18% 2010 – 61% 2014 – 69% NHS mesothelioma framework 2007 – increased awareness and improved diagnosis
  9. 9. Mesothelioma claims – Male/female % Claimants • 2002 - 96% male/4% female • 2006 - 96% male/4% female • 2010 – 94% male/6% female • 2014 – 95% male 5% female The proportions are relatively consistent with a slight increase in claims from women
  10. 10. Mesothelioma claims – what’s changing – deaths HSE projection 2002 – 1,500 2006 – 1,750 2010 – 1,900 2014 – 2,515 2020 – 2,000 2024 – 1,800 2028 – 1,500
  11. 11. Mesothelioma claims – death rates HSE projection peaks in 2016 Other projections peak higher and later (2018) Revised HSE projection moved back to 2015 but peaked higher (about 1%)
  12. 12. Mesothelioma claims – what might change Medical advances – longevity (40% of sufferers survive one year, 20% survive two years) Cure – impact on claims depends on how the cost of the cure compares to the cost of death benefits A double lung transplant costs £360,000, chemotherapy cost £26,000
  13. 13. Mesothelioma claims – what might change? Mortality improvements – increased longevity means more exposed lives develop mesothelioma Exposure pattern – the long latency period means we know little about underlying exposure from late 1970’s onwards
  14. 14. Mesothelioma – what might change Inflation – Medical - costs e.g. drugs Legal – court fee increases, changes to Ogden discount rates, case law
  15. 15. Mesothelioma claims – MMI Annual Report and Accounts for year ending 30 June 2016 “An increase in the provision for mesothelioma claims has not been required this year as reporting patterns for new mesothelioma claims have stabilised”
  16. 16. Mesothelioma claims – MMI “The Employers Liability mesothelioma account remained stable due to slightly fewer new claims being reported compared with the previous year, but the very nature of these claims makes future projection uncertain”
  17. 17. Mesothelioma claims – what you are seeing Claims from – Caretakers/DLO? Teachers/pupils? Tenants? Others?
  18. 18. Mesothelioma claims – the relevant timeline Early 1960’s – two tier local government – counties and municipal boroughs/county boroughs/rural districts and urban districts 1965 – London boroughs created 1974 – Shire counties and non-metropolitan districts or metropolitan counties and metropolitan districts
  19. 19. Mesothelioma claims 1965 – Newhouse & Thompson paper & Sunday Times article – Serious injury could be caused by low asbestos exposure Even though 1970 - HM Factories Inspectorate Technical Data Note 13 – tolerated some exposure
  20. 20. Mesothelioma claims • Pre 1965 – unless there was substantial exposure to asbestos dust - you shouldn’t be paying out on claims • E.g. Clark v LB Enfield (1) 7 Balding & Mansell (2) • Alleged exposure, judged by the standards of the time, did not present a foreseeable risk of injury
  21. 21. Mesothelioma claims • Living Claimant • Evidence upon Commission • Occupational Hygienist’s report • Claim discontinued against Enfield with costs
  22. 22. Mesothelioma claims - insurance • Policy (or predecessor authority’s policy) lost • Look in the archives – relevant minutes – sufficient evidence?
  23. 23. Mesothelioma claims – the search for evidence Archives – committee minutes – asbestos policy and measures
  24. 24. Mesothelioma claims • The tide may be on the turn • The cost makes it worthwhile expending some time and money exploring a defence • Claims are winnable
  25. 25. Case update Richard Johnson
  26. 26. Albert Victor Carder v The University of Exeter (2016) Court of Appeal
  27. 27. Material Contribution • Asbestosis claim arising from exposure between 1950s to the 1980s. • Claimant was 87 years of age where exposure by defendant amounted to 2.3% of total lifetime dose. • Asbestosis is a divisible disease and so dose related. • Claimant had other health issues and any contribution by the defendant to the claimant's respiratory symptoms or disability was likely to be very small.
  28. 28. • At the earlier hearing below, the court had found for the claimant on the basis that: • 2 .3%, although small was not de minimis (this was conceded on appeal) • The extent of asbestos increase was an indicator that the claimant had become worse off physically even though it was not noticeable or measurable. The dose of 2.3% had made a contribution to the overall condition. • The claimant was at an increased risk of developing lung cancer • The claimants condition was likely to worsen to the point where the claimant will be virtually confined to bed and be dependent upon others. • Unlike cases such as pleural plaque, where damage is measurable but symptomless and no damages are payable, the condition of asbestosis cannot be described as benign.
  29. 29. • What is ‘actionable damage’- Was the Claimant worse off? • Court decided 2.3% was material- appeal dismissed. • What dosage will be de-minimis?
  30. 30. Carl Henegan (Son & Executor of James Leo Henegan, Deceased) –v- Manchester Dry Docks Limited and 5 others (2016) EWCA
  31. 31. • Different approach to divisible and indivisible diseases. • Claimant developed lung cancer due to asbestos exposure. • Defendant sued exposure made up 35.2% of whole life exposure. • Court awarded 35.2% of any damages awarded.
  32. 32. • Claimant appealed relying upon the Bonnington Castings Ltd v Wardlaw 1956 AC: argued that:- • It was established that the lung cancer had been caused by the deceased exposure to asbestos. • The causal connection between the lung cancer and the asbestos was established by reason of the cumulative dose. • Each defendant therefore materially contributed to the contraction of the disease.
  33. 33. • Argument rejected by court. Test is whether exposure by defendant contributed to the injury. • Divisible cases- severity is proportional to the amount of exposure. • Indivisible cases such as lung cancer not possible to apply same test as cannot say which fibres from which employer caused lung cancer.
  34. 34. • Application of Fairchild exception as qualified by Baker v Corus applies. • Section 3 of the compensation act which reversed effect of Baker did not apply as only applied to mesothelioma cases.
  35. 35. Mosson –v- Spousal (London) Ltd
  36. 36. Contributory Negligence • Mesothelioma claim brought against defendants successors in title for period of employment between 1963/64. • Primary liability was admitted. • Contributory negligence alleged for period of self- employment with two separate companies between periods 1976/7 to 1992/3.
  37. 37. • Consideration given to whether claimant was self-employed rather than employee - court decided claimant was self- employed. • Claimants statement denied asbestos exposure while self- employed. • In forms completed for benefits claimant had admitted working with asbestos during period of self-employment. • Medical records also confirmed exposure during this self- employment period. • Claimant accepted possibility of exposure during deposition. • Court considered decision in Williams v University of Birmingham 2011 EWCA . Did degree of exposure while self employed make injury foreseeable by standards of the time?
  38. 38. • Reliance was placed on Badger v MOD (2005) EWHC where the court stated: “Once contributory negligence has been established, the court must take into account both the extent of the claimants responsibility for his injury and damage and the blameworthiness of his conduct as opposed to that of the defendant in deciding on the reduction in damages that is just and equitable”. The judge described the evidence of how the claimant was exposed to asbestos while self-employed was either ‘thin’ or ‘non-existent’. • The judge rejected the allegation that the deceased was guilty of contributory negligence.
  39. 39. Smith v Portswood House Ltd
  40. 40. The Importance of a Good Engineering Evidence • Claimant diagnosed with mesothelioma in 2013 died in 2015 aged 60.Claim pursued by estate. • Claimant alleged that he had been exposed to asbestos in the manufacture of fire doors. • Alleged breaches of the Asbestos Regulations 1969 and section 63 of the Factories act 1961 in relation to the failure to control dust emissions.
  41. 41. • The court when considering the legal principles relied upon Williams v University of Birmingham 2011 EWCA:- • The defendant owed a duty of care not to unreasonably expose him to asbestos fibre's and the consequent risk of asbestos-related injury, including mesothelioma. • The claimant must show the defendant was in breach of that duty by being negligent and exposing the victim to asbestos fibres and consequent asbestos-related injury that was the reasonably foreseeable result of that negligence. • The claimant must prove on balance of probability that the defendants negligent breach of duty had caused a material increase in the risk that the claimant would develop mesothelioma. • The claimant must also prove the loss and damage suffered is within the usual ‘remoteness’ rules.
  42. 42. • The court confirmed the Supreme Court decision in Baker v Quantum Clothing Group Limited 2011 that the standard of conduct expected is that of the reasonable and prudent employer at the time taking into account developing knowledge about the particular danger concerned.
  43. 43. • Conflicting engineering evidence • Defendant expert evidence preferred. Judge concluded exposure to asbestos fibres did not exceed standards of the time. • Court stressed onus not on Defendant. • “It is for the Claimant to prove both that the Defendant company was negligent and that its breach of duty caused a material increase in the risk that the victim would develop mesothelioma.”
  44. 44. General Data Protection Regulation Megan Larrinaga
  45. 45. Will GDPR apply to the UK? • Yes • No information as to how it will apply • Tinkering with GDPR post-Brexit? • Favourable exemptions?
  46. 46. General Data Protection Regulation(GDPR) • New definitions • New principles for Data Processing • Data Subject Rights • Consent • Information to be provided to Data Subjects • New Data Controller Obligations • Data Processor Obligations • Data Protection Officers • Mandatory Breach Notification • Increase in Liability and Sanctions
  47. 47. Aim of the Reform • A uniform regime • Greater rights for data providers • Enhancing confidence in security • Increased accountability • Reduction in bureaucracy
  48. 48. Territorial Scope • All data controllers and processors – Operating within the EU – whether or not the processing takes place in the EU – Outside the EU that offer goods and services to data subjects in the EU – Outside the EU that monitor the behaviour of data subjects to the extent that the behaviour takes place in the EU
  49. 49. Definitions – personal data Current Data relating to a living individual who can be identified from those data or from those data and other information which is in the possession of, or likely to come into the possession, of the data controller. Future An identifiable person who can be identified directly or indirectly, in particular by reference to an identifier such as name, identification number, location data, online identifier or to one or more factors specific to the physical, cultural, physiological, genetic, mental, economic, cultural or social identity.
  50. 50. Special categories of data • Data revealing- Race or ethnic origin Political Opinions Religious or Philosophical Beliefs Trade Union Membership Health or Sex Life and Sexual Orientation Genetic or Biometric data in order to uniquely identify a person • Processing of any/all of the above prohibited subject to exceptions
  51. 51. Definitions – data processing • Current – obtaining, recording or holding the information or data or carrying out any operation or set of operations on the information or data including altering, retrieving, disclosing, blocking erasing or destroying the information • Future – any operation or set of operations which is performed on personal data whether or not automated including collecting, recording, organising, structuring, storing, adapting, altering, disclosure, erasure or destruction.
  52. 52. Principles for data processing • Data must be processed lawfully, fairly and in a transparent manner • Data must only be collected for a specified, explicit and legitimate purpose • Data must only be processed to the extent that it is adequate, relevant and limited to what is necessary in relation to the purpose for which they are processed • Data must be accurate and up to date. Data which is inaccurate should be erased or rectified without delay • Identifiable data should not be kept longer than is necessary • Ensure appropriate security of the data • Ensure compliance with the Regulations.
  53. 53. Lawful basis of processing • Consent • Contractual necessity • Legal Obligation • Vital Interests of the data subject or of another natural person • Public Interest or exercise of official authority • Legitimate interests of data controller or third party to whom data is disclosed (but not to a public authority).
  54. 54. Consent • Must be freely given, specific, informed and unambiguous • Must be given by a statement or a clear affirmative action • If written, should be distinguishable from any other matter • Withdrawal of consent should be as easy as grant of consent • Purpose limited – loses validity when the purpose ceases to exist • Burden of proof on the data controller to show consent freely given
  55. 55. Data subject rights • Data subjects can require: Inaccurate personal data be corrected or incomplete data be completed including by way of supplementing a corrective statement Personal data in a machine readable and structured format commonly used by the data subject and allows for further use The data controller to delete their personal data where certain conditions are met
  56. 56. Data subject rights: continued Restriction of processing of personal data – so that this can only be held by the controller and used for limited purposes Transfer of personal data from one data controller to another (“data portability”) Processing of personal data not take place for direct marketing, including profiling Not to be subject to a decision based solely on automated processing, such as in connection with insurance premiums The rights of access, rectification, erasure and the right to object must be given effect free of charge
  57. 57. Information to be provided • Data controllers must provide the following to data subjects on request: Identity and contact details of data controller and data protection officer Intended purpose of processing and period for which data will be stored Existence of rights: access, rectification, object and erasure Right to lodge a complaint internally and to a supervisory authority Recipient or categories of recipients to whom data will be disclosed Intention to transfer to another country or international organisation • Information must be concise, transparent, intelligible and easily accessible • Must be provided in writing unless otherwise requested.
  58. 58. Controller vs Processor • The GDPR applies to ‘controllers’ and ‘processors’ • Broadly the same as under DPA Data controller says why and how personal data is processed Data processor acts on behalf of the controller • Data processors now have direct obligations
  59. 59. Data controller obligations • Designate a data protection officer (where required) • Appoint a sub-processor • Adopt policies and implement appropriate technical and organisational measures to ensure and be able to demonstrate compliance with GDPR • Implement security requirements • Deal with privacy impact assessments • Comply with requirements of supervisory authority • Report breaches to the supervisory authority and affected data subjects
  60. 60. Data processor obligations • Designate a data protection officer (where required) • Appoint a sub-processor only with authorisation of a data controller • Adopt policies and implement appropriate technical and organisational measures to ensure and be able to demonstrate compliance with GDPR • Implement security requirements • Comply with requirements of supervisory authority • Maintain a written record of all personal data processing carried out on behalf of a data controller • Notify data controllers without undue delay after becoming aware of a breach
  61. 61. Non-compliance by data processors • Sanctions by regulator • Damages claims from data subjects – failure to comply with lawful instructions of data controller – apportionment between data controller and data processor • Damages claims from data controllers
  62. 62. Data Protection Officer • Data controllers and data processors must designate a Data Protection Officer where: – The processing is carried out by a public authority – The processing requires regular and systematic monitoring of data subjects on a large scale – The core activities consist of processing large scale special categories of personal data
  63. 63. Responsibilities of Data Protection Officer • Inform and advise the data controller/processor • Monitor the implementation and application of the Regulations and the data protection policies • Monitor Impact Assessments and breaches • Point of contact for Supervisory Authority
  64. 64. Mandatory breach notification • Notify data protection authority without undue delay and, where feasible, within 72 hours of awareness – reasoned justification required where timeframe is not met • Notify the affected data subjects without undue delay – where there is a “high risk” to their rights and freedoms • Not required if breach is unlikely to result in a risk to the rights and freedoms of individuals • Adopt internal procedures for data breaches
  65. 65. Consequences of a data breach • Level 1: €10,000,000 or 2% total worldwide annual turnover • Level 2: € 20,000,000 or 4% total worldwide annual turnover • Factors taken into account when determining fine: Nature, gravity and duration of the breach Whether breach intentional or negligent Previous breaches by the data controller/processor Technical and organisational measures in place.
  66. 66. Next steps • Enforceable from 25 May 2018 • Where consent is relied upon as the basis for processing, consider whether this is valid under the GDPR • Review all communication and information to ensure all necessary information is stated • Review systems to ensure that new obligations can be met, such as data portability • Review processes and procedures for reviewing and reporting data breaches, and implement appropriate policies • Consider whether it is necessary to appoint a DPO
  67. 67. Next steps • Consider the relationship between various parties to an agreement, who is the data controller/processor in relation to what personal data, and the obligations on each • Review agreement between controllers and processors to ensure appropriate arrangements are in place • Consider the rights of the data subject. How will you deal with requests for erasure? • Consider the impact of Brexit, including which parts of your operations are within the UK or elsewhere • Consider where personal data of individuals within the EU and outside of the EU is processed and how this impacts on your obligations
  68. 68. Questions • Megan Larrinaga • 020 7871 8504 • Megan.Larrinaga@brownejacobson.com