Health law newsletter - January 2016

Birmingham Exeter London Manchester Nottingham
www.bjhealthlawyers.com
Index Page
Adding injury to injury: defendants only liable to pay for claimants’ additional care – Ian Long 1 - 2
Treating dying patients as individuals - new Guidelines on end of life care – Mark Barnett 3 - 4
Deprivation of liberty reform – where next? – Ben Troke and Rebecca Fitzpatrick 5 - 6
The interface between MHA, MCA and DoLS – reflecting on recent case law - Ben Troke and
Rebecca Fitzpatrick
7 - 9
DNAR notices and clarification on patient capacity issues – Mark Barnett 10 – 12
Stripped back to basics – the NHS Mandate – Clare Auty and Doris Woo 13 – 14
Legitimate interests rule OK on penalty clauses – Clare Auty and Doris Woo 15 – 17
Court fees and abuse of process – a warning for claimant solicitors – Gemma Corlett 18 – 20
Coventry & Others –v- Lawrence & Others - John Appleyard 21 – 22
Genetics & Confidentiality – Testing the Boundaries – William Reynolds 23 – 24
The evolution of proportionality – John Appleyard 25 – 27
Confidentiality – changing GMC guidance – Ben Troke and Ros Foster 28 – 29
Employment update – Sarah Hooton 30 – 33
Intercept claims validation product - Paul Wainwright 34 - 35
The articles in this newsletter are for general information only. They do not represent legal advice. You should always take legal advice
before pursuing any course of action discussed in this newsletter. If you would like to discuss any of the issues raised in this newsletter
please call us +44 (0)115 976 6000.
Simon Tait
+44 (0)115 976 6559
simon.tait@brownejacobson.com
Oliver Pritchard
+44 (0)115 976 6292
oliver.pritchard@brownejacobson.com

Defendants only liable to pay for claimants’ additional care
The Court of Appeal handed down judgment on the controversial case of Reaney v University Hospital of
North Staffordshire Trust in November 2015.
What’s it about?
The case looks at the situation where an individual with a pre-existing condition sustains a negligent injury
that dramatically increases the individual’s care needs. The Court looked at whether the Defendant should
pay for all the care needs or just the additional costs incurred by the ‘top-up injury’.
This decision is something which defendants and claimants alike have been awaiting with bated breath
because of the particular impact it will have on the growing number of elderly care cases we are seeing. Such
cases commonly involve an elderly claimant who has various pre-existing conditions but the defendant’s
negligence acts as the ‘straw that broke the camel’s back’ and triggers a substantial increase in the
claimant’s present and future care needs.
The facts in a nutshell
Christine Reaney was a 61 year old paraplegic through non negligent causes who went on to develop pressure
sores as a result of the Defendant’s negligence. This significantly increased the level of care she required
from several hours of care a week to 24 hour round the clock care.
The Defendant Trust accepted liability for the losses caused by the pressure sores but argued they should not
have to pay for care that arose out of her pre-existing condition.
Initially, the High Court accepted Claimant’s practical argument. The Judge said you must contrast the
position the Claimant was in before the negligence compared to the position she was in afterwards. She only
needed 7 hours of care before the negligence but now needed 24 hour care, a larger house and special
transport. This was an expensive decision, meaning the Defendant was liable for the full cost of the
Claimant’s significant care package despite her care needs being the combined result of both the negligent
injury and a pre-existing, non-negligently sustained condition.
The Court of Appeal decision
The High Court decision was unanimously overturned by the Court of Appeal, who held the Trust’s liability
was limited to the additional care and other needs that were directly attributable to their negligence.

So where a defendant’s negligence causes a claimant’s condition to worsen and have additional care needs
that are substantially the same as the care needs that would have been required anyway by reason of a pre-
existing condition, then what had changed was the extent of care to be provided; an issue which the Court
felt was a quantitative one and not a qualitative one. So where it is a ‘more of the same’ argument then the
liability for care is divided up in proportion to its negligent and non-negligent causes.
The effect of this decision has been to significantly reduce the cost burden for defending Trusts.
Quantitative vs Qualitative
So what would constitute qualitatively different care and other needs?
The Court of Appeal made reference to the case of Sklair v Haycock to exemplify the distinction between
qualitatively different care and quantitatively different care. In this case, the Claimant suffered from
Asperger’s syndrome and was then injured in a road traffic accident as a result of the Defendant’s
negligence. Before the RTA, he led a fairly independent life but had some supervisory care from his father.
After the accident, he needed round the clock nursing care. The Court of Appeal said this was qualitatively
different care owing to his pre-existing independence prior to the RTA. Accordingly it was appropriate that
the Defendant paid for the Claimant’s care needs in full.
What are the implications of this decision?
The Court of Appeal decision has been a reassuring one following the uncertainty and concern amongst
defendants that the compensation payments on claims involving claimants with pre-existing injuries was set
to sky rocket with defendants having to pay for the claimant’s full care costs when perhaps the majority of
the need for care was unrelated to the defendant’s negligence.
The problem for defendants in future cases will be where the care needs caused by the defendant’s
negligence can be said to be qualitatively different from the care needs required by the
pre-existing injury. In which case, the defendant will be liable for the care package in its
entirety at a potentially eye watering cost.
The difference between quantitative and qualitatively different care may not be always be
a clear cut distinction. In cases of admitted negligence on top of a pre-existing injury, it
will be important for defendant Trusts to be able to evidence clearly to the Court that a
care package consists of care similar to that which is already being provided.
Ian Long | +44 (0)115 976 6194 | ian.long@brownejacobson.com
Fran Shaw | +44 (0)115 976280 | fran.shaw@brownejacobson.com

Mark Barnett looks at the new NICE guidelines on end of life care, which is designed to replace
the Liverpool Care Pathway.
Although a recent independent report ranked the UK’s end of life care the best in the world, there had been
a great deal of controversy over the Liverpool Care Pathway, which had been widely used by hospitals and
hospices until 2014. Perhaps more accurately, those concerns were over the inconsistent way in which the
LCP was implemented by clinicians, whether due to lack of training, supervision, or both. The three main
areas of concern were:
 recognising and reviewing whether a person was dying
 over-sedation of the dying person
 the perception that hydration and medication may have been withheld or withdrawn.
The new NICE guidelines, published in December 2015, make various recommendations, which are intended
to address these issues.
To help in recognising when a person may be in the last days of life, the guidelines suggest that information
on the person’s physiological, psychological, social and spiritual needs should be gathered, as well as
ensuring that there is a clear review of their symptoms and medical history. It is important as well to have a
clear idea of the person’s wishes as well as the views of those important to them. There is also emphasis on
keeping the person under daily review and ensuring that senior and experienced input is sought where there
is uncertainty.
This focus on patient centred and individualised care is found throughout the NICE guidelines, which also
highlight the importance of discussing and planning care with the person, taking into account their current
mental capacity (remembering that this can change and is decision specific).
Whilst recognising that discussions like this are extremely difficult for all concerned, the importance of
providing information to the dying person, and those important to them, about their prognosis, fears and
anxieties as well as their preferences for care (and whether there is an Advance Decision or Lasting Power of
Attorney) cannot be understated.
Related to the need for good communication is the recommendation that there should be shared decision
making in the last days of life. You should establish the extent of involvement the dying person wishes to
have and ensure that a lead healthcare professional is identified, who is responsible for encouraging shared
decision making in the person’s last days of life. An individualised care plan should be created in discussion

with the dying person and the MDT, which should include their goals and wishes, preferred care setting,
preferences for symptom management and resource needs.
The guidance also contains recommendations to ensure the person remains comfortable in their last days.
There are recommendations on maintaining hydration and around pharmacological interventions to manage
pain, breathlessness, nausea and vomiting, anxiety, delirium and agitation; which includes considering non-
pharmacological management of symptoms. Anticipatory prescribing could also be considered to avoid
unnecessary delays in administering appropriate medication in the last days of a person’s life.
As was expected, the NICE guidance focuses on the importance of individualised and patient centred end of
life care. However, if the criticisms and controversy which surrounded the LCP are to be avoided, it is
essential for commissioners and providers of end of life care ensure that their staff are familiar with the
guidance, local policies are reviewed and updated and proper training and supervision is in place.
Mark Barnett | +44 (0)1392 458768 | mark.barnett@brownejacobson.com

After a fairly lukewarm official response from the government to the Law Commission’s
proposals on the reform of the law on deprivation of liberty, health and social care providers
can take little comfort that the much needed overhaul to relieve the confusion and pressure
will come any time soon.
The government has given its initial response to the Law Commission’s proposed ‘Protective Care’ scheme to
reform the law around deprivation of liberty (summarised here and in our webinar recording), echoing some
of the concerns we heard at consultation events held across our offices last year.
The Law Commission’s conclusion from its recent four month consultation reflects the long-standing and
widespread view that the Deprivation of Liberty Safeguards (DoLS) are “deeply flawed”, and that the
situation for deprivation in the community is also in some disarray. Clearly reform is needed, and soon.
However, the Department of Health (DH) response to the consultation expresses concerns that the proposed
scheme does not meet three ‘tests’: user-friendliness, creating ‘real benefits’ for persons lacking capacity /
their family, or value for money. It refers to aspects of the proposals as “unnecessarily complex” and overly
“legalistic”, pushing back in particular against the state reaching unnecessarily into private affairs, when it
comes to deprivation of liberty in the family home) and observing that “for many people (indeed, the great
majority) it is nonsensical that an individual receiving excellent care, in a ‘normal’ care setting, is ‘deprived
of their liberty’.
Unfortunately, this does little to help health and social care providers deal with the legal and practical
obligations from that the courts repeatedly holding otherwise.
Following the consultation on their initial proposals, draft legislation is expected from the Law Commission
by the end of this year, after a provisional report due in ‘spring 2016’. However, while stating that it is
committed to reform, the DH is waiting for the post-consultation proposals before deciding whether
legislative change is ‘the best way forward’ at all.
There is a hint that better implementation of the existing framework may be more appropriate than new
legislation. This may be little comfort to those who feel the existing system and resources to be stretched
beyond fitness for purpose as a result of the post Cheshire West scale of demand, and while the cost of
implementing the Law Commission’s proposals (put at £533m pa) is sobering, the same Impact Assessment
also puts the cost of full compliance using the current framework at an eye watering £1.6bn.

The government does agree that any proposed reform should cover both registered setting and domestic
settings, but in the meantime is ‘keen to see how successful’ the Re X process for deprivation of liberty in
community settings will be.
We also note with interest the ‘concluding thought’ that any revised proposals would need ‘simulation
testing’ with professionals, service users and families implementing the scheme. It seems the Law
Commission is likely to have its work cut out to meet its aim of a draft bill by the end of 2016.
In the meantime, with the Court of Appeal having firmly rejected the challenges to Cheshire West from the
lower courts (click here to watch our webinar), organisations across the health and social care sector will
continue to face difficult strategic decisions over their approach to people deprived of
their liberty, balancing individual rights, potential liabilities, costs and practicality.
As ever, we would be happy to discuss ways in which we can assist with this.
Ben Troke | +44 (0)115 976 6263 | ben.troke@brownejacobson.com
Rebecca Fitzpatrick | +44 (0)161 300 8050 | rebecca.fitzpatrick@brownejacobson.com

Mental Health Act, the Mental Capacity Act and DoLS – reflecting on recent case law
The 2013 Upper Tribunal case of AM v (1) South London & Maudsley NHS Foundation Trust (2) Secretary of
State for Health [2013] UKUT 0365 (AAC) considered this issue.
This case concerned AM who was being detained under section 2 of the Mental Health Act 1983 (MHA). An
application was made to the mental health tribunal for AM to be discharged from her section.
It was not disputed that AM lacked capacity to make decisions about her care package and treatment. It was
argued on her behalf that she should be assessed and treated under the Mental Capacity Act 2005 (MCA) and
that if she was deprived of her liberty, this could be authorised under the Deprivation of Liberty Safeguards
(DoLS) rather than needing to use the MHA.
Charles J considered that for decision-makers having to determine whether the MHA or the MCA should be
used where the person requires assessment or treatment as an in-patient in a psychiatric hospital, there were
3 questions to consider:
1. Does the person have capacity to consent to admission as an informal patient?
2. Might the clinical team be able to rely on the provisions of the MCA to lawfully assess or treat the
person?
3. If there is a choice between reliance on the MHA 1983 and the MCA 2005, which is the least restrictive
way of achieving the proposed assessment or treatment?
Following this decision, even for those individuals who may come within the scope of the MHA, the MHA no
longer has primacy and DoLS remains an alternative to be taken into account that should be considered. This
is reflected in the new 2015 Code of Practice, which states that the choice of regime must be based on which
is the least restrictive in the circumstances, rather than a preference or familiarity. If capacity is likely to be
regained or fluctuating this should be taken into consideration.
The key point to take from this case is that decision-makers should aim to find the least restrictive way of
achieving the desired objective.

Reflecting on SS V RB [2011]
Ever since this case it has been difficult to discharge restricted patients who lack capacity from detention
under the MHA 1983; often they require robust conditions in the community that amount to a deprivation of
liberty. In this case the Court of Appeal decided it was unlawful for a tribunal to discharge from MHA
detention into effectively what amounted to community detention, because that was not true ‘discharge’
from detention.
However in the recent case of SS for Justice V KC and Partnerships FT [2015] UKUT the Court considered
this issue again – particularly conditional discharge to circumstances that may constitute a DoL where P lacks
capacity and whether this is lawful.
The decision approves the use of and authorisation under the MCA 2005 with DoLS running alongside a
patient’s conditional discharge under the MHA.
KC, the patient concerned, was a restricted patient who lacked capacity to make decisions on residence and
care. The tribunal had made a provisional decision to discharge KC subject to the following conditions:
1. residence at placement, not to leave the premises unsupervised by staff
2. comply with care plan & supervision
3. accept psychiatric & social supervision
4. refrain from drinking alcohol & submit to testing.
All agreed this amounted to a deprivation of liberty. As the proposed placement was not a care home or a
hospital, any DoL would require authorisation by the Court of Protection.
Charles J considered the case, particularly whether it is lawful for a First Tier Tribunal (FTT) to discharge P in
such circumstances.
Following this decision it is now possible for a person to be given a conditional discharge from MHA detention
if the conditions of that discharge amount to an objective deprivation of liberty, as long as it is possible for
that deprivation to be authorised under DoLS.
That is, if P lacks capacity, the DoL under the conditional discharge will be lawful, if it has been authorised
under the DoLS regime or by the Court of Protection.

On a practical level, where a Tribunal is satisfied that P could be granted a conditional discharge, the norm
will be to adjourn for the DoLS assessment to take place, so that the Tribunal can be sure the DoL will in fact
be authorised and will operate as soon as the conditional discharge takes effect.
The decision also contains remarks (expressly obiter so persuasive rather than binding) suggesting that a
patient with capacity might be able to consent to discharge to such conditions, and referring to the apparent
unfairness to that group compared to those lacking capacity. This view has since been upheld by the decision
of MM v WL Clinic and MHS [2015] UKUT 0644 (AAC) UT (AAC) (Charles J) which confirmed that patients
detained under the MHA who have capacity and consent to the arrangements, can be lawfully discharged
from hospital into a community deprivation of liberty.
Conversely, if a patient has capacity and refuses consent to the proposed conditions of a conditional
discharge where they amount to a deprivation of liberty, these cannot be imposed on him either by the MHA
or by MCA / DoLS. In similar future cases tribunals are likely to seek reassurance that the patient’s consent is
‘real’ rather than any pressure for example being placed on them.
Comment
The continuing string of cases concerning this sometimes complex interface between the two legal regimes,
demonstrates that it is increasingly important for all clinicians making medical recommendations under the
MHA to have a strong understanding of the MCA and DoLS framework.
If you would like to talk through our mental health law capabilities, or have questions
about what we can offer, then please contact Becky Fitzpatrick or Ben Troke.
See more at:
www.brownejacobson.com/health/services/court-of-protection
www.brownejacobson.com/health/organisations/nhs-mental-health-trusts
Rebecca Fitzpatrick | +44 (0)161 300 8050 | rebecca.fitzpatrick@brownejacobson.com

Caselaw recap and update
In the case of Winspear –v- City Hospitals Sunderland NHS Foundation Trust, the court deals with the rights of
patients who lack capacity and the implementation of Do Not Attempt Cardio-Pulmonary Resuscitation
(DNAR) orders.
The judgment of Mr Justice Blake in Winspear appears to both endorse and build upon the principles
previously set down by the Court of Appeal in Tracey –v- Cambridge University Hospitals Foundation Trust,
which clarified the law in this challenging and at times misunderstood area of clinical practice.
Tracey – a recap
A DNAR was put in place Mrs Tracey’s medical records without prior consultation with her or her family, and
the existence of the DNAR was not communicated by clinicians. This was despite the fact that Mrs Tracey had
expressed a clear wish to be involved in discussions involving her treatment.
The Master of the Rolls, Lord Dyson, held that when a DNAR is contemplated, Article 8 ECHR, the right to
respect for private and family life, is engaged as this decision directly affects how someone will come to end
their living days. He commented that there is growing recognition of the importance, and presumption of,
patient involvement in decisions which potentially deprive them of life saving treatment.
Whilst a DNAR is a clinical decision, this does not negate the requirement to consult with the patient prior to
putting one in place. The presumption should be that the patient is involved in the decision making process
unless there is convincing reason to the contrary. Failure to do so denies the patient the opportunity to
obtain a second opinion and not least to know what the clinical course of treatment for them will be.
Whilst many patients may find such a discussing distressing, this does not negate the need for patient
consultation. Only if the patient is at risk of physical or psychological harm, should such a consultation be
avoided. Mere distress however is not sufficient.
Lord Dyson held the failure to consult and inform of the DNAR in Tracey constituted a breach of her Article 8
rights.

Patients who lack capacity - Winspear
Carl Winspear had cerebral palsy and was also severely physically disabled. He lacked capacity under the
Mental Capacity Act (“MCA”) in respect of medical treatment. The decision was taken to put in place a DNAR
in the very early hours of the morning without consultation with his mother, although the clinician intended
to discuss the matter with her at a more convenient time of the day.
The patient’s mother was informed later that day of the DNAR. She objected and the notice was removed. It
had been in place for only a matter of approximately 9 hours. Sadly Carl died later that day, after the DNAR
had been removed.
The Court noted the principles set down in Tracey and the engagement of Article 8. It made the obvious
distinction that Carl lacked capacity and so was not able to express a desire to be involved in the decision
making process in the same way as Mrs Tracey had.
Blake J highlighted that where a patient lacks capacity, although direct patient involvement in the decision
making process may not be possible, the MCA and associated Code of Practice are relevant in addition to the
principles laid down in Tracey.
As part of the best interests provisions of the MCA, section 4(7) requires a clinician, where practicable and
appropriate, to take into account the views of ‘anyone engaged in caring for the person or interested in his
welfare’. In the absence of such a prior discussion, clinicians cannot rely upon section 5 MCA, which provides
clinicians with a ‘general defence’ against liability where they reasonably believe a person lacks capacity and
it is in that person’s best interests for an act to be done.
Blake J held that the core principles of prior discussion apply equally in all situations regardless of mental
capacity. Where a patient lacks the requisite capacity, section 4(7) MCA encompasses the procedural
obligations to consult. This obligation can only be waived in situations where it is truly impracticable or
inappropriate to hold such a discussion. The circumstances of Carl’s case were not deemed to satisfy this
hurdle. The Judge noted that the doctor did not record his awareness of his duty to contact the patient’s
mother in accordance with the MCA obligations nor did he record the reasons for failing to consult before the
DNAR notice was completed.
Blake J held that there had been a violation of the procedural duty under Article 8. In doing so, he endorsed
the Court’s stance in Tracey and repeated that a decision to implement a DNAR on the grounds of futility of
treatment does not render the duty to consult obsolete.

Conclusion
The clear message from both Tracey and Winspear is that professionals have a legal duty to inform and
consult patients/carers regarding any DNAR decision, regardless of capacity.
Key points to heed from these judgments include a necessity to appropriately consult in all cases prior to the
making of a DNAR notice and a requirement to inform thereafter where a DNAR is implemented. There should
be a presumption in favour of patient involvement in the absence of greatly compelling reasons to the
contrary.
We understand that end of life situations can create emotionally difficult situations and judgments for
professionals. We can of course discuss with you how best to meet the rights of those patients who may be
considered appropriate for DNAR notices and to protect the organisation and individuals involved in patient
treatment. We are happy to provide general advice on DNAR issues and review local
policies and procedures regarding the same.
Mark Barnett | +44 (0)1392 458 768 | mark.barnett@brownejacobson.com

The NHS Mandate for 2016–2017
After recent consultation, the Government’s mandate to NHS England for 2016 – 2017 (the Mandate) has been
released. The Mandate adopts an entirely new format from that published in previous years, providing clear,
widely accessible aims to hold the NHS to account.
This stripped back approach appears to take root from the startling growth in public responses to this year’s
consultation. With the 2015 consultation receiving just over 300 public responses, this year’s received
127,400. 114,000 responses were organised by a last minute campaign run by the organisation 38 Degrees,
who also called for an extension to the consultation period whilst they attempted to raise awareness. Many of
these responses were not included in the final consultation as they were too generalised and were used
instead as a vehicle to voice other concerns about the NHS.
The main two worries that surfaced were that of funding and an over involvement with the private sector.
These opinions serve to echo an increasing interest in the NHS by the population at large, formed over 2015.
With an election that saw the NHS more as a political tool than a real body, the election of the first fully
Conservative Government in eighteen years, and the recently announced intended changes to the working
requirements and pay of junior doctors, the increase in interest should come as no surprise.
In answer to the claims that the private sector is over involved, the consultation stipulated that, “the NHS
will continue to harness the capacity of the private and third sectors where they are best placed to deliver
high quality services for NHS patients.” This statement serves to douse all fears that the private sector will
replace the NHS and instead that it will remain in its intended function to support health care provision
within the UK.
The result of the consultation was a set of clear objectives, summarised as follows:
1. “Through better commissioning, improve local and national health outcomes, particularly by
addressing poor outcomes and inequalities”
The aim here is clearly transparency and setting aims that are measurable: such as the reduction in
differing levels of service across the UK.
2. “To help create the safest, highest quality health and care service”
Covering a wide area, the intended message is the empowerment of the individual to improve their
own care. This includes seven day a week access to care facilities and a focus on improving end of life
care, the aid provided to carers, and the early detection of abuse victims and cancer diagnosis.

3. “To balance the NHS budget and improve efficiency and productivity”
This can quite simply be explained as an aim for the NHS to live within its means and focus on the Five
Year Forward plan which proposes to radically rethink care models as they are today.
4. “To lead a step change in the NHS in preventing ill health and supporting people to live healthier
lives”
Heavily linked again to the Five Year Forward plan, the Government is challenging the NHS to improve
the prevention of life style based illnesses such as obesity and addiction induced illness.
5. “To maintain and improve performance against core standards”
As a reminder that this is a mandate to NHS England, a fairly young body, this objective seeks to
establish the need for NHS England to continually support the NHS to improve the provision of quality
services at all times.
6. “To improve out-of-hospital care”
There is a clear health gap caused in the UK by the inability of some people to access health services
on a regular basis. Alongside the Five Year Forward view, the NHS has been challenged to provide
better access to GP’s, urgent care 24/7 and to devolve more responsibilities to local communities so
that care is better tailored to those within the constituency.
7. “To support research, innovation and growth”
We live in the technological era and it is noticeable that the NHS is one of many public bodies to not
yet fully utilise this. The NHS has been challenged to promote research participation and support a
greater use of technology within its day to day practice, making the NHS more accessible and
transparent to the population at large.
For more information on the Mandate, the Consultation, or the Five Year Forward View please see the below
links:
www.gov.uk/government/uploads/system/uploads/attachment_data/file/486674/nhse-mandate16-17.pdf
www.gov.uk/government/uploads/system/uploads/attachment_data/file/487491/Mandate_Cons_Response.pdf
www.england.nhs.uk/wp-content/uploads/2014/10/5yfv-web.pdf
Clare Auty | +44 (0)121 237 3943 | clare.auty@brownejacobson.com
Doris Woo | +44 (0)121 296 0690 | doris.woo@brownejacobson.com

The use of liquidated damages clauses and service credits, such as those found in many commercial contracts
including public service network supply agreements and managed service agreements, are subject to the
penalty test established in Dunlop v New Garage & Motor Co [1915]. Provisions deemed by courts to be
penalty clauses are unenforceable and bear the following characteristics:
 the amount stated in the clause is not a genuine pre-estimate of loss; and
 the clause is aimed at deterring breach instead of compensating the innocent party.
If a clause is rendered unenforceable, the innocent party will have to seek damages at common law instead,
i.e. recovering only actual losses arising from a breach of contract.
How has the position on penalty clauses evolved in the commercial courts?
In our review of case law, a trend has developed throughout the cases of Zimut-Benetti Spa v Healey [2010],
GB Gas Holdings Limited v Accenture [2010], E-Nik Ltd v Department for Communities and Local Government
[2012], Makdessi [2015] and ParkingEye [2015] wherein previously unenforceable clauses were upheld. This is
because they were “in the context of a carefully negotiated commercial agreement between informed and
legally advised parties at arm’s length over a considerable length of time” (Makdessi).
Most notably, the following comments have been made:
 In Azimut-Benetti Spa v Healey [2010], a clause which allowed the supplier to retain 20% of the full
contract price for non-completion, when the customer failed to make an instalment payment, was
included and permitted by the courts. Additionally, if the phrase “genuine pre-estimate of loss” is
included, this would effectively cap what the innocent party could recover as losses.
 The ruling in GB Gas Holdings Limited v Accenture [2010] allowed British Gas to recover as a ‘direct loss’
an £8 million ex gratia payment to compensate its customers when the supplier’s billing system failed. If,
therefore, a supplier’s system was intended to improve a particular issue but its failure clearly worsens
the issue, the supplier may be liable for the cost to put things right, even on an ex gratia basis. Although
this position arguably exposes suppliers to liability of third parties, no subsequent cases have come before
the courts to challenge what is seen by many as a widening of the definition of direct loss.
 Customers negotiating supplier or consultancy agreements should be live to the consequences of accepting
clauses which read similar to “You’ll take x days of our services, and if you don’t take them you will in any
case pay for any days not taken”. In E-Nik Ltd v Department for Communities and Local Government
[2012] (citing M & J Polymers Ltd v Imerys Minerals Ltd [2008]), its take or pay clause was held to be
enforceable.

 In relation to the £85 parking charge examined in ParkingEye, the parking company’s objectives in
imposing the charge was to prevent people from taking advantage of over-staying at its car park. This was
considered by the court to be in the legitimate interest of the car park management and therefore, not
“out of all proportion” to its interest; the mere intention to deter a breach will not be fatal if a party has
a legitimate interest to protect its position.
Although the penalty rule still stands, it is clear from the above cases that establishing a valid legitimate
interest is effectively a trump card for allowing a broad spectrum of financial remedies in properly
negotiated contracts, allowing previously unenforceable clauses more chance to succeed.
Applying the post-November 2015 position on penalty clauses to procurement contracts
The importance of service credits in the context of negotiating service levels has been well documented.
While service credits could be negotiated as an exclusive financial remedy for certain service failures, serious
failures should be addressed with a wider range of remedies such as termination, liquidated damages and
indemnities appropriate for the type, severity and impact of the service failure.
When drafting and negotiating liquidated damages clauses, consider the following ways to avoid the penalty
rule or under-compensation of enforceable clauses:
 Draft the financial remedy as a primary obligation under the contract, rather than one which is triggered
by a breach of another obligation. Alternatively, draft the clause as one chosen by the party in breach
instead of being a payment triggered on breach.
 Include the phrase “genuine pre-estimate of loss” in a payment clause with caution as highlighted in
Azimut-Benetti Spa v Healey. Otherwise use different wording to establish an alternative justification to
cover indirect loss.
 If the clause is not a genuine pre-estimate of loss or is likely to be interpreted as a deterrent to breach,
then clearly state the legitimate interest that the clause is aimed at protecting. Where service credits are
provided for, set out the optimal service level as a way of stating a legitimate interest for the service
credit.
 Carefully negotiate what is recoverable as a direct loss; administrative or operational costs to remedy a
service failure or payments to end-users/customers may be permissible applying GB Gas v Accenture.
 Considerations when determining “legitimate interest” should include value of the contract, the
significance of service levels and reasonable sum of losses incurred, including costs of making payments to
end users.

The task of challenging such clauses will be made more difficult following these cases, as you would need to
demonstrate not only that the clause is intended as a deterrent, but also that the remedy that it offers is out
of all proportion to the legitimate interest that it is trying to protect.
In lieu of abolishing the rule against penalty clauses, commercial justification has grown in significance when
looking at the enforceability of liquidated damages and service credits. The Supreme
Court decisions will likely result in less interference with large procurement contracts;
therefore, negotiate these provisions with care.
Clare Auty | +44 (0)121 237 3943 | clare.auty@brownejacobson.com
Doris Woo | +44 (0)121 296 0690 | doris.woo@brownejacobson.com

… a warning for Claimant solicitors
Court fees in civil litigation were increased on 9 March 2015. The most significant increase was in respect of
the court issue fee, which was increased to £10,000 (from £1,720) for claims valued at £250,000 and over.
The increase in court fees has led to claims being issued at a lower value, in order to avoid paying the
increased fee. This seems to be driven by the Claimants’ solicitors desire to manage their cash flow rather
than in any effort to keep fees down for the Defendant that may ultimately be held liable. A recent decision
serves as a warning to Claimant solicitors that this practice will not be tolerated by the Court.
Facts
The case of Lewis v Ward Hadaway [2015] EWHC 3503 concerned alleged negligence by the Defendant firm of
solicitors in respect of property transactions. The relevant transactions took place in 2006 and 2007. There
were 31 Claimants in total. In July 2008, the Claimant’s solicitor sent pre-action protocol Letters of Claim to
the Defendant. The Letter of Claim for each case claimed substantial sums, running into hundreds of
thousands of pounds.
The claims were issued by the Court at the request of the Claimant’s solicitor between August 2012 and April
2013. All of the claims were issued very near to the end of the relevant limitation period. The fees paid on
the Claimant’s behalf upon issue of the claim forms were for lower amounts than the amounts claimed in the
Letters of Claim. The Claimants argued that that they never intended to limit their claim to the lower sums,
but always intended to amend the Claim Form to the sums claimed in the Letters of Claim.
In every case the Claim Forms were amended, just before service, to claim the larger sums and the balance
of the larger fee due was paid. This course of action was taken deliberately by the Claimant, to reduce the
fees paid initially to the Court when the claim was issued, to stop time running and because the Claimant did
not have disbursement funding. The Defendant alleged that this conduct was an abuse of process.
The Defendant applied under CPR 3.4 (2) (b) to strike out the claims on the grounds of the Claimant’s alleged
abuse of process. Alternatively, the Defendant applied for summary judgment on limitation grounds.
Held
Mr John Male QC, sitting as a Deputy High Court Judge, granted the Defendant’s application in part. He found
that issuing a Claim Form with a statement of value lower than the true value of the claim and, in the
knowledge that it would be amended later to increase the value, was an abuse of process, even though the
Claim Forms were amended and the increased court fee paid prior to service. He based his decision on the
following:

1. there was a public interest in Claimants not behaving in this way
2. the Claimant had gained a possible advantage over the Defendant by being able to ‘stop time running’ by
paying a lower fee to issue the claims
3. the Claimants always intended to amend the claims at a later stage for no good reason other than to pay
a reduced fee
4. although the full fee was paid at a later date, disruption was caused to the cash flow for the court
system, along with increased administration because of the need to process two Claim Forms and two
sets of fees.
The Judge was persuaded by the fact that other District Judges had reached the same conclusion in four
previous cases on the same issue, involving the same firm of solicitors.
Despite the fact that the Judge held that there was an abuse of process, he considered that it would be
disproportionate to strike out the claims, for the following reasons:
1. there was no suggestion that the Claimant’s conduct had been fraudulent or dishonest, as it had not
been concealed in any way
2. the duration of the abuse of process was limited
3. the claims were arguable and the Defendant’s potential liability in damages was £9 million. To strike out
the claims entirely would enable the Defendant to avoid the claims entirely, which would result in
substantial prejudice to the Claimants.
When considering the summary judgment point, the Judge noted that there were 11 cases in which the claims
were delivered to the court office prior to limitation expiring, although the Claim Forms were issued after
limitation expired. The Judge considered when these actions were ‘brought’. It was held that the claim had
been brought when the Claim Form was accompanied by the ‘appropriate fee’. As the ‘appropriate fee’ had
not been paid on time for these 11 claims, the Defendant’s application for summary judgment succeeded and
those cases were statute barred and were therefore struck out.
Lessons learnt
This decision is likely to serve as a warning to many Claimant solicitors in respect of the issue fee and also as
a reminder not to leave issuing claims until the final hour.
There will be some comfort to personal injury Claimants with regard to the summary judgment part of the
decision. This was a professional negligence claim, meaning that the Claimants could not argue the s.33
Limitation Act 1980 discretion, which would apply in personal injury claims.

The Court also made obiter comments in respect of Claimants in financial difficulty. The Court considered
what impecunious Claimants could do if they wanted to issue a claim and suggested that if the Claimant
knows he will receive a substantial sum in due course, it would be open to him to seek the Defendant’s and
the Court’s agreement to pay a reduce fee initially. There would be complete transparency and therefore it
is likely that this would not be considered to be an abuse of process.
In the near future, it is likely that Defendant firms may be faced with requests to agree a lower value for the
purposes of issue or requests for interim payments to cover issue fees. This is something that we need to be
mindful of as the full impact of the increased court fees and the changes to funding are realised.
Gemma Corlett | +44 (0)161 300 8055 | gemma.corlett@brownejacobson.com

For what was supposed to be the pinnacle case of the old regime - ultimately concluding that
the payment of additional liabilities had offended the human rights of every defendant who had
ever been obliged to pay them - it was all a bit of a damp squib.
Coventry was a claim for nuisance in relation to noise arising from various motor and speedway events at a
stadium located some 800 yards from the claimants’ house. They succeeded in the High Court and in the
Supreme Court, the latter overturning the Court of Appeal. The claimants recovered £20,000 and an order
that the defendant should pay 60% of their costs. These costs were subsequently quantified in a sum
exceeding £660,000 after the discount had been taken into account.
Lord Justice Neuberger, describing the costs as “deeply disturbing”, concluded that it was open to the
Supreme Court to consider whether these disproportionate costs infringed the defendants’ human rights.
In presenting their arguments, the Defendants identified the ‘flaws’ of the previous regime:
 a lack of focus and a lack of any qualifying criteria for those able to enter into a conditional fee
agreement (CFA)
 a lack of any incentive for claimants to control their legal costs
 the ‘blackmail’ or ‘chilling’ effect of the regime which drove parties to settle early despite good
prospects of defence, and
 the potential to ‘cherry-pick’ winning cases to be run under the regime.
By a majority of 5 to 2, the Supreme Court held that the Access to Justice Act Regime (the pre-Jackson
regime) is compatible with the European Convention on Human Rights.
In reaching this decision, their Lordships considered whether they were tied to the decision in MGN v UK (the
Naomi Campbell case). They concluded that they weren’t. This was a different case on different facts.
Therefore, they did not find that they could conclude that the ECtHR would have reached the same
conclusion.
Then, their Lordships then turned their attention to the ‘flaws’ of the old regime, but failed to positively
identify any alternative regime which would have operated less harshly. The question for their Lordships was
not therefore whether the Access to Justice Act regime had flaws – it was readily accepted that it did – but
whether it achieved the aim it pursued, namely providing access to justice to potential litigants when faced
with the probable abolishment of Legal Aid.

They opined that they had to give “considerable weight to informed legislative choices… where state
authorities are seeking to reconcile the competing interests of different groups of society” and recognised
that a regulatory scheme “may still be compatible with the convention even if it operates harshly in
individual cases”.
Even the prospect of an individual or small undertaking carrying on a modest business without insurance
facing ‘one off’ litigation leading to “eye-catchingly large costs exposure” (as identified by Lord Mance)
would not be safe. The position must be considered as a whole. This being considered, they were satisfied:
“There is a powerful argument that the 1999 Act scheme is compatible with the
Convention for the simple reason that it is a general measure which was (i) justified by
the need to widen access to justice to litigants following the withdrawal of legal aid; (ii)
made following wide consultation; and (iii) fell within the wide area of discretionary
judgment of the legislature and rule-makers to make”.
Even if the Defendant’s Human Rights had been offended, their Lordships did not consider it would have
made a difference:
“If (contrary to our view) the scheme was incompatible with article 6 and A1P1, we would
not read it down so as to make it compatible and we would not strike the scheme down or
disapply it”.
So that was that.
In the view of the Supreme Court, the government/rule makers did the best they could at the time and
without any alternative to turn to, it was what it was.
Still, one cannot help but wonder what the outcome would have been had the point
been raised in 2002…
John Appleyard | +44 (0)115 976 6028 | john.appleyard@brownejacobson.com

On 19 May 2015 Mr Justice Nicol struck out a claim brought by a Huntington’s Disease sufferer for the
allegedly negligent failure of three NHS trusts to inform her that her father had previously been
diagnosed with the condition. The claim was struck out after Mr Justice Nicol concluded that the treating
clinicians did not owe the Claimant a duty of care such that they were obliged to disclose information
protected by the duty of confidence owed to her father. However, the Claimant has now been given
permission to appeal that decision.
The Facts
In 2009 the Claimant’s father, who had previously shot and killed his wife, was diagnosed as suffering with
Huntington’s Disease, a genetic condition which classically presents with involuntary movements between the
ages of 35 and 45. It is an incurable progressive condition which sees suffers gradually lose muscle function
and eventually results in death. The children of carriers of the disease have a 50% chance of also suffering
with the condition.
At the time of the diagnosis the Claimant was pregnant and her father was asked whether he would allow his
daughter to be informed of the diagnosis. However, he refused. The Claimant subsequently became aware of
the diagnosis after one of her father’s doctors mistakenly told her that he was suffering with Huntington’s
Disease. Genetic testing was carried out and the Claimant was found to have the condition.
Following the Claimant’s diagnosis she brought a claim against three NHS Trusts alleging that the failure to
inform her of her father’s condition was negligent. She also alleged that it violated her rights under Article 8
of the European Convention of Human Rights (the right to private and family life). It was the Claimant’s case
that if she had been told of her father’s diagnosis she would have terminated her pregnancy upon
confirmation that she also suffered with the condition.
The Parties’ Positions
The Defendant Trusts applied to strike out the claim on the basis that they did not owe her a duty of care in
respect of her father’s diagnosis. In essence it was their position that in light of the Claimant’s father’s
refusal to allow the Trusts to disclose the information there was nothing further they could have done. To
have disclosed the information without consent would have breached the Claimant’s father’s right to
confidentiality.

The Claimant on the other-hand argued that the rule of confidentiality was not absolute and that disclosure
may take place where the risk of harm substantially outweighs the claim to confidentiality. This was the
position as set out in a 2006 joint report by the Committee of the Royal College of Physicians, the Royal
College of Pathologists, and the British Society for Human Genetics.
The Decision & Appeal
Mr Justice Nicol struck out the claim concluding that it would be a “radical departure” from current law to
impose a duty of care to disclose confidential medical information to family members even in situations
involving genetic conditions. The Claimant has now been granted permission to appeal the decision and
challenge the current position of the law.
The appeal judges will now have to consider whether doctors should be placed under a duty to disclose
confidential medical information regarding genetic diseases where failing to do so will or may lead to
significant harm to family members. As Mr Justice Nicol himself stated in the first instance decision it would
be a “giant leap” to impose a duty of care in such situations based on the law as it stands. One point raised
by the Defendants was that imposing such a duty also has the potential to place the relationship of trust and
confidence held between doctors and patients at risk.
With such a difficult balancing act placed before the judges it is possible that they may simply maintain the
status quo and look to parliament to address the issue. However, if the judges do decide to take the leap and
impose a new duty of care doctors will be faced with a need to consider the families of those diagnosed with
genetic diseases and whether or not the potential harm they could face not knowing of the diagnosis
outweighs the duty of confidentiality.
William Reynolds | +44 (0)115 908 4850 | william.reynolds@brownejacobson.com

One of the biggest challenges faced by Lord Justice Jackson in his reforms to the civil
costs landscape was how to make costs proportionate.
The Rules, as they stood prior to April 2013, stated that the Court would only allow costs which
were “proportionate to the matters in issue”. The approach to be adopted, as endorsed by the
Court of Appeal in the leading case of Lownds v Home Office, was for the Costs Judge to undertake
a two stage test. Firstly, the Judge must consider whether the costs on the whole appeared to be
proportionate. If they did, he would assess the bill of costs on the basis of whether or not the items
contained in the bill had been reasonably incurred. If they did not, it would trigger what was
supposed to be a much stricter test where the receiving party had to demonstrate that such costs
had been necessarily incurred as well.
However, within his report Lord Justice Jackson concluded that this test did not work. Even with
the stricter test of necessity imposed, costs were simply not proportionate. Consequently, the
Rules on proportionality were changed.
The test, now contained within CPR 44.3 (2)(a), takes matters a step further in stating that the
Court will “only allow costs which are proportionate to the matters in issue. Costs which are
disproportionate in amount may be disallowed or reduced even if they were reasonably or
necessarily incurred”.
Given the ambiguity of this wording, and the lack of any judicial guidance as to how this approach
was to be implemented on assessment, it is perhaps easy to see how this has caused both paying
and receiving parties some discomfort. It is therefore pleasing to see that these questions are now
starting to be answered.
The first case was Savoye & Savoye –v- Spicers Ltd [2015] EWHC 33 (TCC), in which Arkenhead J
reduced the costs in a £900,000 dispute from just over £200,000 to £96,465 on the basis they were
disproportionate. Admittedly, it was a rather straightforward “one issue case” involving three short
hearings relating to an application for summary judgment plus a trial, but in reducing the costs by
over 50% the Judge took the opportunity to give guidance under CPR 44.3 on what should be
considered by the Judge, which can be summarised as:
1. the relationship between the costs spent and the amount in issue

2. the amount of time spent by the legal representatives conducting the case, particularly in
relation to the total length of any final hearings
3. whether the case was a ‘test’ case
4. the importance of the case to either party
In concluding that Savoye did not really tick any of these boxes, and that far too much time had
been spent by both specialist Solicitors and Counsel, he took a ‘costs hatchet’ to the claim
presented and reduced it significantly.
Adopting a different approach but reaching a similar conclusion, Master O’Hare, in the case Hobbs -
v- Guy’s and St Thomas’ NHS Foundation Trust [2015] EWHC B20 (Costs) considered the test of
proportionality in the context of a low value clinical negligence case. He initially reduced the bill
from £32,329.12 to £11,000 and then, in a review post assessment, reduced it further to £9,879.34.
But he did not stop there.
Quoting from both Lord Justice Jackson and Lord Justice Neuberger he went on to say that
“proportionality trumps necessity” and that the way to implement this is to consider the figure
reached at the end and, in the event this is still not proportionate, to reduce the claim further.
This, he said, was not to be done by reducing the bill of costs by an arbitrary amount, but instead
by targeting items within the bill which were reasonable for the Claimant to incur at the time, but
which with the benefit of hindsight the costs of which were not reasonable to pass on to the
Defendant.
While this is only one Judge’s view, it is certainly well founded. In making his decision the Master
took the opportunity to quote from Leggatt J in the case of Kazakhstan Kagazy PLC v Zhunus [2015]
EWHC 404 (Comm) in which guidance was given on the approach to proportionality which should be
taken in hard fought litigation where the sums in issue exceeded many millions of pounds.
Leggatt J opined that “In a case where very large amounts of money are at stake, it may be
reasonable from the point of view of a party to spare no expense that might help to influence the
result of the proceedings. It does not follow, however, that such expense should be regarded as
reasonably or proportionately incurred when it comes to determining what costs are recoverable
from the other party. The touchstone is not the amount of costs which it was in a party's best
interests to incur but the lowest amount which it could reasonably have been expected to spend in
order to have its case conducted and presented proficiently.”

In other words, it doesn’t matter whether the work done was reasonably done at the time… but
instead whether at the end the same conclusion could have been reached cheaper.
Three very different cases; Courts; Judges; and assessment – but with a common theme. It is not
how one gets to the final costs figure, but what the final figure is. If nothing else, the above cases
are evident that all Courts are prepared to take a hard line with disproportionate costs in whatever
manner they are presented or at whatever stage of the proceedings they arose.
While it would perhaps be rather naïve to suggest that any of these cases are likely to be
representative of the last word in determining what proportionality means in a Jackson era of
litigation, this author cannot help but conclude that for Defendants at least, we
are off to a good start.
John Appleyard | +44 (0)115 976 6028 | john.appleyard@brownejacobson.com

General Medical Council (GMC) guidance on confidentiality was published in 2009, and
they are now consulting on a revised version.
The key proposed changes include:
 A new structure to distinguish between the context of ‘direct care’, ‘indirect care’ and ‘non-
care’ uses and disclosure of confidential information.
 The existing duty to tell an appropriate authority when a patient who lacks capacity may be
experiencing, or at risk of, abuse or neglect, is extended to all forms of serious harm (previously
this referred to ‘neglect or physical, sexual or emotional abuse’).
 The new guidance suggests that there may be a public interest justification in exceptional cases
for disclosure of confidential information about a patient who has capacity without their
consent, even when nobody is at risk of serious harm.
 There is new guidance on using anonymised and de-identified information for indirect care – eg
commissioning or audits.
 Expanded guidance on the factors to consider before disclosure ‘in the public interest’.
 More emphasis on doctors’ duties to understand information governance and their obligations,
including management of records.
There is also updated separate explanatory guidance covering 7 particular situations which are
often problematic:
 Patients’ fitness to drive and reporting concerns to the DVLA or DVA (this has not changed much,
but makes clear that doctors should consider whether a patient’s condition or treatment can
affect their ability to drive safely, and contains a more overt expression of doctors’ duties to
protect the public).
 Disclosing information for employment, insurance and similar purposes.
 Disclosing records for financial and administrative purposes.
 Disclosing information about serious communicable diseases (expanded to emphasise that
disclosure to another health professional at risk of infection is unlikely to be justified where that
risk would ordinarily be managed by standard precautions).
 Reporting gunshot and knife wounds (re-ordered but essentially unchanged, other than
clarification that disclosure to the police for shotgun and firearms licensing can be justified in
the public interest if failure to disclose may expose others to a risk of death or serious harm).

 Disclosing information for education, training and for learning from adverse incidents and near
misses (expanded to cover learning from adverse incidents and near misses, and to provide that
information about patients who lack capacity to consent to disclosure can be shared if justified
by the public interest, eg of trainees gaining experience of such patients, if it is not contrary to
the best interests of the individual patient, arguably departing from the conventional approach
under the Mental Capacity Act).
 Responding to criticism in the press (little changed, other than to link explicitly to guidance on
social media).
There is a link to the consultation documents here and it is open until 10 February 2016.
We would be pleased to hear from you if you would like to discuss this.
Ros Foster | +44 (0)20 7337 1015| ros.foster@brownejacobson.com

Employment law is notorious for its speed of change. As we enter into 2016, we take a
look at some of the developments and decisions that we are expecting this year so that
you can keep a watch for them:
Tribunal Fees
As you may recall, the Court of Appeal dismissed Unison’s most recent challenge to the tribunal fee
system (R (on the application of Unison) –v- Lord Chancellor (No. 3)). There was a lack of evidence
as to the impact of fees on any individual claimants. The figures on their own, whilst showing a
dramatic decline in the volume of claims, were insufficient to establish that claimants were unable
to have effective access to justice. The Court of Appeal concluded that the two-tier fees system
was objectively justifiable, given the greater demand placed on tribunal resources by
discrimination claims.
Unison has sought permission to appeal to the Supreme Court and so this case will continue into
2016.
Running parallel to this are the government review of employment tribunal fees and the Justice
Committee inquiry; outcomes from both of these are awaited in 2016.
The Scottish Government has indicated that it will abolish employment tribunal fees once it is clear
on how the transfer of powers and responsibilities under the Smith Commission agreement will
work.
Whilst abolishment of the fee regime in England and Wales seems highly unlikely, a reduction in the
fee levels may well be on the cards, leading again to a potential rise in the number of tribunal
claims pursued.
Whistleblowing
In 2013, whistleblowing legislation was amended to require that disclosures must be (in the
reasonable belief of the worker making the disclosure) “in the public interest” to be capable of
protection. However, the threshold set for what amounted to “the public interest” in the case of
Chesterton Global Limited (t/a Chestertons) and another –v- Nurmohamed was very low. The EAT
held that the new wording was introduced simply to avoid a worker from relying on a breach of his
own contract of employment where the breach was personal in nature. In this case, although the
disclosure related to the pay awarded to the Claimant, it also affected the pay of around 100 other
senior managers and this was a sufficient group of the public to satisfy the test.

Chestertons was applied in Underwood –v- Wincanton Plc (EAT). In this case, the disclosure related
to the allocation of overtime to the Claimant and three other colleagues. The claim was initially
struck out by the Tribunal (before the outcome of Chestertons was known) as having no reasonable
prospects of success, principally because it would not satisfy the public interest test. This was
overturned on appeal, with the EAT finding that the interpretation of “public interest” by the
Tribunal was too narrow.
Chestertons has appealed to the Court of Appeal and the outcome is expected later this year (it is
scheduled to be heard in October 2016). It remains to be seen whether the Court of Appeal will
impose any higher threshold on the public interest test. In the meantime, employers should err on
the side of caution when considering whether disclosures made by workers are sufficient to qualify
as a protected disclosure.
Holiday Pay
The EAT heard the appeal in Lock –v- British Gas Trading Limited in December 2015 and judgment
is currently awaited. The appeal concerned whether Bear Scotland Limited –v- Fulton and another
(EAT) should have any bearing on this case given that Bear Scotland concerned non-guaranteed
overtime and Lock relates to commission. British Gas is also arguing that Bear Scotland was
incorrectly decided when it concluded that domestic legislation could be interpreted purposively to
give effect to EU Law.
Some holiday pay cases remain stayed pending the outcome of Lock but others, particularly within
the public sector where tribunals are not required to purposively interpret domestic legislation and
instead can rely directly on EU law, are proceeding.
The introduction of the Deduction from Wages (Limitation) Regulations 2014 last year, imposing a
two-year backstop on the majority of unlawful deductions from wages claims (including holiday
claims) from 1 July 2015 did not create the influx of holiday claims that some predicted. Many
employers are still sitting tight awaiting hopeful clarification on this uncertain area of law from the
EAT in Lock. Others are taking steps now to address holiday pay going forwards to assist with
morale/employee engagement and to break any series of deductions.
Redundancy
In 2013, a controversial decision of the EAT which deleted the words “at one establishment”,
dramatically extended the scope of the collective consultation regime (Usdaw and another –v- WW
Realisation 1 Limited (in liquidation) and others). The decision effectively required collective
consultation whenever an employer proposed 20 or more redundancies across the whole
organisation within a period of 90 days, even if the numbers of proposed redundancies at any given
site were considerably lower.

The ECJ held that this was incorrect and reinstated the previous threshold of 20 or more proposed
redundancies at an “establishment”. The case will now return to the Court of Appeal; it is expected
to conclude that each store was an establishment in its own right.
Subject to the Court of Appeal’s decision, in the vast majority of cases, “establishment” is likely to
be a single store or site. However, there may still be some occasions (as there were before the
2013 EAT decision) where separate geographical sites could be aggregated to form a single
establishment – for example, building operations carried out at multiple sites but with a common
headquarters and administrative base may constitute one single establishment.
Employers should carefully consider what their proposals are, and the potential implications of
those proposals, to determine whether the collective consultation obligations are triggered.
TUPE and Assignment
In BT Managed Services Ltd –v- Edwards, an employee who had been off work for over 5 years, with
no indication of him ever returning, was not deemed to be assigned to an organised grouping of
employees and so he did not transfer under TUPE. The EAT distinguished permanent inability with
long term sickness or maternity leave, where the absence might be regarded as temporary.
Edwards has been appealed to the Court of Appeal and is due to be heard in June 2016.
Employers acquiring employees under TUPE should carefully conduct their due diligence to consider
which employees are actually assigned to the organised grouping of employees immediately before
the transfer. This, of course, is subject to information being available from the transferors but, in
the absence of such information, robust protection should be sought under any contract.
Equal Pay
Gender pay reporting requirements for employers with 250 or more employees are expected in
2016. The deadline for their introduction is 26 March 2015 but commencement regulations are still
required. The government has indicated its intention to include bonus information within the
reporting requirements and to extend the obligation to publish gender pay data to public sector
employers.
In the meantime, equal pay claims against Asda and Sainsbury’s are expected in 2016. Whatever
the outcome in these particular cases, the publicity generated to date has already been significant
and is likely to continue, raising greater awareness of employee rights and a greater appetite from
trade unions and claimant firms to pursue equal pay claims within the private sector. Whether this
will release any pressure within the public sector in respect of equal pay threats, or simply extend
it across all sectors, remains to be seen.

Employers would be advised to consider their pay structures and any apparent pay inequalities,
particularly if they are likely to be caught by the gender pay reporting requirements, when
introduced.
Other developments
11 January – zero hours workers have protection against unfair dismissal and detriment for failing to
comply with an exclusivity clause.
25 January 2016 – consultation closes in respect of draft regulations to allow for the recovery of
exit payments when a public sector high earner returns to the public sector shortly after exit.
1 April 2016 – National Living Wage to be introduced – proposed to be £7.20 per hour for those 25
and over.
The draft Public Sector Exit Payment Regulations 2016 impose a cap of £95,000 on the pre-tax value
of exit payments made to most public sector workers.
The Trade Union Bill 2015/16, which proposes various wide-reaching reforms of various aspects of
industrial relations law, continues to be progressed.
Sarah Hooton | +44 (0)115 976 6033 | sarah.hooton@brownejacobson.com

Browne Jacobson rolls out its Intercept claims validation product for Health sector
clients.
Claims management and investigations are becoming increasingly challenging. The time frames of
the Portal and Protocols for responses to all manner of claims are tight. This has the consequence,
shared by all our clients, of imposing a burden on organisations and claims teams to carry out
immediate investigations, often with scant detail from claimants, in order to answer often complex
questions of breach of duty.
In response to this Browne Jacobson LLP has developed a range of products known as ‘Intercept’
which aims to help clients investigate, respond and where appropriate challenge claims which are
sometimes questionable or brought dishonestly.
Originally developed out of the suite of tools used by Browne Jacobson’s Intelligence team which
supports the Counter Fraud Group, Intercept is geared to delivering an intelligence based
assessment of the litigation risks, and where appropriate guidance on the validity of claims (or
specific financial loss claims) and strategy advice.
“We are delighted to be able to offer this validation tool to our health sector clients at this
challenging time” said Paul Wainwright, Partner & Head of Counter fraud. “We have recognised the
increasing pressure on time and where there are increased budget restrictions. We are keen to
support our clients in reaching early effective decisions during the litigation process.”
Its ease of use and format mean that investigations and reports are concluded within a five day
period leaving clients with the time to review and make informed decisions.
“We have found that clients who use of these products (which accesses Open Source Intelligence)
to validate claims, also request additional support during litigation. Validating suspicious heads of
loss, or unsubstantiated claims can save many thousands of pounds in damages and legal costs, and
sometime avoid litigation altogether” Paul added.
The product is used by many local authority and commercial clients. As a fixed fee product it offers
predictability and allows clients to rule out the impossible and concentrate on the real issues in this
case.

“The Intercept Reports have proved to be an ideal, incisive tool for exploring concerns
raised during the course of claims investigations. Clear reports with comprehensive
searches have allowed us to check the validity of the information of the potentially
fraudulent claims queried, and the excellent advice provided as to avenues to pursue
further has assisted us deal with this types of cases.”
Paul Wainwright | +44 (0)121 237 4577 | paul.wainwright@brownejacobson.com

Health law newsletter - January 2016

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Health law newsletter - January 2016