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‘A New Deal for Working People?’: Employment Status, Qualifying Periods, and Labour’s Proposal

<a href="https://www.parklaneplowden.co.uk/barristers/robert-dunn">Robert Dunn</a> is an <a href="https://www.parklaneplowden.co.uk/expertise/employment">Employment</a> specialist. To view Robert's original comments, click <a href="https://www.parklaneplowden.co.uk/news/robert-dunn-quoted-by-hr-grapevine-on-labour-pledge-to-grant-the-same-rights-to-all-workers-from-their-first-day">here</a>. <strong>The Current Position</strong> As it stands, everyone in England &amp; Wales whom works, broadly fits into 1 of 3 groups. They could be an ‘employee’, a ‘worker’ or ‘self-employed’. These categories are far from clear cut, and are subject to a minefield of case law. Neither is it helpful that these categories can be defined differently, in different statutes. (Very) broadly speaking though, they are: <ul> <li>&nbsp;<strong>Employees - s.230(1) ERA 1996</strong>: These persons have a contract of service, express or implied. They are subject to control, mutuality of obligation, and must provide personal service;</li> <li><strong>&nbsp;</strong><strong>Workers</strong> - <strong>s.230(3)(b) ERA 1996</strong>: These persons have a contract for services, express or implied. They are should provide personal service, but may not have mutuality of obligation. These persons are categorised by their relationship of subordination to an employer, irrespective of what is on the face of their contract;</li> <li>&nbsp;<strong>Self-Employed</strong>: These persons are not subject to the subordination of a worker. They conduct business genuinely in their own right.</li> </ul> Different persons receive different employment rights, depending on which category they fall into. Crucially, rights also depend on one’s continuity of service. For example, employees require 2 years to claim unfair dismissal, or 26 weeks to complain that they have been subjected to a detriment for requesting training, pursuant to s.63(6)(d)(a) ERA 1996. Such qualifying periods are rife through employment law as we know it. &nbsp; <strong>Labour’s New Deal</strong> On 26<sup>th</sup> July 2021, Labour announced their ‘New Deal’, should they be elected in 2024. Essentially, they announced that they would: <ul> <li>Create a ‘unified worker status’. This would include employees, S.230(3)(b) ERA 1996 workers, and ‘those in bogus self-employment’;</li> <li>Remove qualifying periods for employment rights, and give all such ‘unified workers’ ‘full employment rights from Day One’;</li> </ul> Proposals have clearly not crystalised yet, and the devil will of course be in the detail. However, this article seeks to explore some of the potential questions which arise, and the possible effects of such a proposal. &nbsp; <strong>Discussion</strong> From the perspective of those in work, this appears at first sight to be a positive proposal. Whilst employees already have access to ‘full employment rights’, the qualifying periods will be removed. Rights, such as the right to claim for unfair dismissal or claim paternity pay, would be available from the outset. No longer could a less-than-thorough disciplinary or redundancy procedure be applied just before an employee’s 2 years are up. For many workers, the benefits are clear too. The weightier ‘employee’ rights would become open to them, and all without any qualifying periods. Labour have also announced that the requirement to earn £120 per week to access Statutory Sick Pay would also be removed, it being a quasi-qualifying period. The TUC estimate this would bring over 6 million additional workers within the sick pay regime. &nbsp; <strong>The Key Questions</strong> As ever with employment law though (and particularly employment status), the proposal also creates as many questions, as it does gives answers. Firstly, the proposal fails to comment on other definitions of ‘worker’. For example, S.43K ERA 1996 gives an extended ‘worker’ definition, for those not falling within S.230(3)(b). This gives S.43K workers the right to claim for detriments arising from whistleblowing, and does not even require a direct contract with their ‘employer’; per HHJ Eady QC in <strong>Keppel Seghers UK Ltd v Hinds [UK EAT/0019/14/JOJ]</strong>. On the face of the proposal, S.43K workers are excluded. If so, what is the logical basis for there being no widening of their rights at all, but other workers receiving ‘full’ employment rights? Secondly, there is the concept of the ‘bogus self-employed’. The inclusion of this concept, in addition to S.230(3)(b) workers, suggests it adds something more. However, it is entirely undefined. Moreover, key recent UK Supreme Court cases such as <strong>Autoclenz v Belcher [2011] UKSC 41</strong> and <strong>Uber BV v Aslam [2021] UKSC 5</strong>, are aimed at focusing on the ‘reality’ of a relationship to determine whether individuals have been genuinely self-employed or not. Given the <strong>Uber </strong>decision, it is questionable whether this concept of the ‘bogus self-employed’ really widens the scope of protection at all. If it does, it would almost certainly lead to a further raft of extensive satellite litigation to determine where the new boundary would fall. If it does not, why has it been included in addition to ‘workers’? Thirdly, that said, there may be concern for those whom are self-employed. These persons may well not want to be sucked into this ‘unified worker’ definition, given the control and potential tax implications it may have. As an example, many barristers work solely under a particular Chambers, whom provide them work, deal with any complaints against them, deal with their fees, and deduct payments for clerking and expenses. The relationship has features of subordination, yet most barristers would surely be loathed to fall under the definition of ‘bogus self-employed’. Fourthly, there may be concern for workers. Some workers can pay tax as a self-employed person, and this could be threatened. Moreover, many workers enjoy the flexibility that a lack of mutuality of obligation, and perhaps control, brings. If employers are forced to give such individuals ‘full employment rights’, the additional cost may well discourage their employment in the first place. Is it worth employing a casual zero-hours worker on a temporary basis, if they can immediately resign and take you to the Tribunal for unfair dismissal? Further, if employers are forced to give such workers typical ‘employee rights’, there appears no reason not to then subject them to the additional obligations of an employee, and exert a greater level of control, subordination and mutuality of obligation on them. This will be unwanted by many current ‘workers’. Fifthly, the proposal poses questions for other categories of persons. What about apprentices or probationary employees, for example? Such individuals having protection against unfair dismissal, or the right to claim sick pay or maternity pay, ‘from Day One’ may well impact the willingness of employers to take such persons on. And what about Agency workers? Whilst they may still not be the ‘worker’ of the end-user (unless S.43K workers are included), they would almost certainly have ‘full employment rights’ against the agency. That would have profound implications for recruitment agencies, and their profitability. Sixthly, there is the impact upon Tribunals. It is difficult to see how providing millions more individuals with greater employment rights will not lead to more claims. No longer will a Tribunal have a lack of jurisdiction to consider an unfair dismissal complaint because a person is a worker, or does not have continuity of service. What is now the near instant rejection of an ET1 on those bases, would instead become a Preliminary Hearing followed by a 2-day Unfair Dismissal claim. There have also been soundings of the time limit for bringing most Tribunal claims, perhaps being extended to 6 months. Unless such proposals are accompanied by substantial investment in the Tribunal Service, it is difficult to see how this would not further worsen the case backlog. Lastly, the impact upon employer HR teams seems mixed. There must be a practical ease, in understanding all those whom work for you are a ‘unified worker’ with all rights from the outset. Distinguishing between such persons and calculating continuity of service would fall away. That may though be outweighed by the impact of any increase in Tribunal claims. &nbsp; <strong>Conclusion</strong> The devil will of course be in the detail. 2024 is a long way away, and Labour still appear to have a long way to go in the polls to win in any event. Either way though, the proposals are interesting and worthy of discussion. They challenge the current orthodoxy, and some may argue simply continue the movement towards greater protection for those in unstable work, that is evident behind cases such as <strong>Uber BV v Aslam</strong>. As highlighted however, they require substantial clarification and pose risks for the Tribunal system, employers, and those workers whom want to retain the flexibility and freedom that their current role brings.

Abuse of Process: part 36 offer &#8216;on the whole of the claim&#8217; includes vehicle damages brought separately

The claim arose from an RTA in 2019. A claim was brought in the MOJ Portal for PSLA only, with the First Solicitors indicating that there was a claim for vehicle damages, but the same was being pursued outside the portal by another company. The claim exited the portal and thereafter followed numerous communications, including a pre-medical offer from the Defendant for PSLA only, an offer to settle vehicle damages on a without prejudice basis, and an offer to settle the whole claim. In January 2020 the Defendant made a Part 36 offer on “<em>the whole of the claim</em>”. The offer was accepted without a request for further information or attempt to reserve the position as to vehicle damages. At the beginning of 2021 the Second Solicitors, within the same group as the First Solicitors, intimated a claim for vehicle damages. The Defendant initially engaged with the claim, indicating they would settle, before entering a defence founded on the argument that the claim had already been compromised by the 2020 Part 36 offer, and as such the proceedings were abusive. District Judge Hickinbottom, sitting in Sheffield County Court concluded that, as per HHJ Gargan in <em>Hogg v Newton</em>, the words “<em>the whole of the claim</em>” must be given their natural meaning. Save for the presence of special factors, in the context of matters pertaining to an RTA that natural meaning pertained to all claims that may arise from the RTA. The words used must be construed within the factual matrix preceding the offer and acceptance. Regard was paid to the fact previous correspondence had sought to separate the claims, negotiating both PSLA and vehicle damages separately. Those attempts to separate the claims were distinct from the offer on “<em>the whole of the claim</em>”. DJ Hickinbottom concluded that despite the indication on the CNF, the intention of the parties upon making and accepting the offer was clear, and accordingly not only the PSLA claim had been settled. The case is distinct from a developing parallel line of authorities relating to cases whereby the PSLA claim is disposed of, either by way of settlement or judicial determination, within the portal or at Stage 3, see for example <em>Poku v Abedin.</em> Given the frequency with which insured losses are pursued outside of the portal, it is essential for both Claimant and Defendant solicitor’s alike to be alive to the fact that indicating the same on the CNF as per 6.4 of the Protocol, will not necessarily exclude vehicle damages from the scope of a Part 36 offer. To view Bethan Davies' profile, click <a href="https://www.parklaneplowden.co.uk/barristers/bethan-davies">here</a>.

Chief Coroner&#8217;s Guidance No.41: The Use of &#8216;Pen Portrait&#8217; Materials, 5 July 2021

Legal update written by <a href="https://www.parklaneplowden.co.uk/barristers/abigail-telford">Abigail Telford</a>. &nbsp; <strong>What are pen portrait materials?</strong> Pen portrait materials are statements and other documents, such as photographs, that enable the family and friends of the deceased subject of the inquest to present a picture of who that person was in life. The Chief Coroner’s latest guidance recognises that such materials can humanise the inquest process and provide dignity to the deceased. &nbsp; <strong>What is the guidance?</strong> The Chief Coroner has endorsed the increasingly common practice of coroners hearing inquests to allow pen portrait materials to be adduced, subject to the caveat that it may not be appropriate in all cases. The Guidance states that the materials can assist with addressing one of the key four statutory questions of who the deceased was (the other three questions being when, where and how the deceased died). The Guidance identifies four categories of inquest, setting out the usual circumstances regarding pen portrait materials for each: <ul> <li>Documentary only rule 23 inquests: where there would not ordinarily be attendance, no pen portrait materials would usually be required.</li> <li>Inquests with only family and friends: the informal approach typical in such inquests enables the family and friends of the deceased to tell the coroner something about their loved one.</li> <li>Inquests with interested persons present but no jury: the Guidance suggests that advance notice of a family statement is preferred, but a flexible approach is to be expected from coroners. The coroner hearing the inquest can decide what materials are to be permitted and when they can be adduced.</li> <li>Inquests where a coroner sits with a jury: where photographs relating to the circumstances of a person’s death are to be adduced, a family may want to adduce photographs of the deceased in life. This is permissible, but the type, timing and amount of such materials remains a matter for the coroner. Directions at a Pre-Inquest Review should provide for advance disclosure of these materials. The Guidance recognises that some families will want to read their statements themselves, whilst others might prefer a lawyer, coroner’s officer or other person to do this for them. Importantly, the Guidance states that a coroner should make clear to a jury that what is said or seen in Pen Portrait Materials is not evidence and is not to be taken into account when considering appropriate conclusions.</li> </ul> &nbsp; <strong>Comment</strong> Pen portraits have been widely but inconsistently used in inquests for a long time. In my experience, they humanise what can otherwise be a deeply impersonal process. However, practice has varied between courts and coroners, and guidance aimed at unifying practice is to be welcomed. That said, the Guidance could be read as doing little more than simply documenting the current practice, because a large degree of discretion is still left to the coroner hearing each inquest as to whether to permit such materials. Although the Guidance can be read as encouragement to allow pen portrait materials, it is possible that some coroners may still resist allowing their inclusion on the basis that they already know who died and therefore the materials are not required to answer one of the key questions. Equally, pressure to conclude an inquest in an efficient and timely manner could inadvertently dissuade a busy coroner from permitting such materials. The Guidance will however provide support for families and those representing them - particularly at the Pre-Inquest Review Stage - when arguing that pen portrait materials should be permitted. Moreover, the Guidance could be seen as a step in the direction of a more victim focused, or at least victim acknowledging, approach in the Coroner’s Court. &nbsp; Abigail Telford is a member of Parklane Plowden's specialist <a href="https://www.parklaneplowden.co.uk/expertise/inquests-inquiries">Inquests and Inquiries team</a>. To view Abigail's profile, click <a href="https://www.parklaneplowden.co.uk/barristers/abigail-telford">here</a>.

Settlement accepted for £1.25 million in a Motorcyclist v Car incident

Parklane Plowden barrister, Ian Pennock, was recently instructed by Eatons Solicitors of Bradford on a personal injury case in a high-speed Motorcycle v Car incident. A car, driven by an uninsured driver, turned in front of a 25-year-old motorcycle driver throwing him 20 feet from his bike and sustaining a multitude of injuries including: <ul> <li>life threatening ruptured aorta requiring immediate and emergency treatment and major blood transfusion,</li> <li>permanent Cauda Equina syndrome (involving loss of sexual function and double incontinence requiring catheterisation and manual evacuation),</li> <li>bowel resection &amp; splenectomy,</li> <li>Bi-lateral fractures for the pelvis and sacrum,</li> <li>spinal fractures involving T1, T2, T5 &amp; T6 and damage to the spinal cord,</li> <li>bi-lateral renal partial infarctions,</li> <li>Multi Ligament left knee injury and left foot drop,</li> <li>fracture of the left wrist and right shin requiring O.R.I.F.,</li> <li>a risk of delayed traumatic epilepsy,</li> <li>continuing chest and lung problems</li> </ul> In addition to medical reports from the following disciplines: <ul> <li>orthopaedic surgeons,</li> <li>spinal surgeon,</li> <li>neurologist,</li> <li>neuropsychologist,</li> <li>psychiatrist,</li> <li>urological surgeon,</li> <li>general physician,</li> <li>occupational therapist,</li> <li>maxillofacial,</li> <li>general surgeon,</li> <li>pain management</li> <li>psychiatry.</li> </ul> Despite the life threatening and life changing injuries the determined Claimant made a ‘miraculous’ recovery returning to work full time in his previous employment which was predominantly desk based and considered quite secure and stable and adapting very well to his situation. The Motor Insurers’ Bureau’s offer of £1.25 million was accepted.

Rajahmoney v Harrison: defendant&#8217;s application to adjourn clinical negligence trial due to ill-health refused

Written by <a href="https://www.parklaneplowden.co.uk/barristers/peter-yates">Peter Yates</a>. This case is a short but useful reminder of the courts’ reluctance to adjourn trials, even in the face of genuine and substantial difficulties facing one party. The claim arose out of the defendant hepatologist’s alleged negligence in 2014. It was said that he had negligently failed to send the claimant’s blood sample for testing which would have led to her being diagnosed with Wilson’s disease. She claimed that, with a diagnosis and treatment, she would have made a full recovery. In the event, she developed liver failure, and required transplants. The claim is valued at over £2 million. Causation is not in issue, and the only issue on liability is breach of duty. The matter is due for trial in May 2021. In October 2020 the defendant suffered a stroke, which was said to have affected his communication skills, and the speed at which he could process information. He is expected to make a good recovery in time. The defendant applied to vacate the trial date, on the basis that it would be difficult for him to give evidence at trial, give instructions, and comment on the expert evidence. The claimant’s position was that the defendant could rely on his witness statement, and that the court could not be confident that the situation would be materially different at a future trial date. The claimant asserted that she would suffer prejudice if the trial were adjourned. The application was refused. It was said that there is a balancing exercise between the prejudice to each party. The allegations dated back to 2014, and memories fade. It was said that the ability of experts to deal with the appropriate clinical standards of the time became more difficult with the passage of time. The issue in dispute turned on expert evidence, and to the extent that the defendant wished to put factual evidence before the court, he could do so in his witness statement. There was, it was said, prejudice to the claimant if there was a further delay. The case would be hanging over her for longer, and there would (if she was successful) be a delay in her receiving her damages. The court dealt also with a separate application by the defendant for an extension of time in which to serve his expert evidence on quantum, the defendant having failed to comply with an earlier deadline. Although Covid-19 had made it difficult for expert examinations to take place, there was a need for lawyers and experts to be flexible in their ways of working. There had been no lack of compliance by the claimant; it was the defendant’s fault that there had been no remote appointment. However, although it is not entirely clear from the summary of the judgment which is currently available, it appears the defendant was granted the extension of time sought.

&#8216;You have reached your destination&#8217; Uber v. Aslam

Written by <a href="https://www.parklaneplowden.co.uk/barristers/gareth-price">Gareth Price</a>. On 19 February 2021 the Supreme Court delivered its judgment in the long running dispute between Uber and its drivers. The central issue to be determined was whether the Tribunal (at a preliminary hearing) was correct to find that the Claimants worked for Uber as ‘workers.’ It held that it was. The secondary issue was, if the Claimants were workers, were they working whenever they were logged into the Uber app (and ready and willing to accept trips) or only when driving passengers to their destinations. The Court held it was the former. The decision has, of course, had a considerable amount of commentary. This short note highlights the key points of the decision and considers its practical implications. &nbsp;&nbsp; <strong>Facts</strong> About 40,000 people drive for Uber. Two million people in London alone had the Uber app in 2016. The Claimants worked as private hire vehicle drivers, performing driving services booked through the Uber app. Some interesting facts<a href="#_ftn1">[1]</a> revealed about the Uber system are<a href="#_ftn2">[2]</a> that: <ul> <li>The service charge debited by Uber from any fare is 20%.</li> <li>A driver whose rating drops below 4.4 is subjected to ‘quality intervention’ and, if the rating is not improved, has their account deactivated.</li> <li>The only written agreement between the parties is between Uber BV and the drivers – who are described as ‘Customer.’&nbsp;</li> </ul> To provide private hire services in London you must have a licence to do so, issued by Transport for London. Uber<a href="#_ftn3">[3]</a> held that licence. <strong>Workers</strong> The ERA 1996 defines the term ‘worker’ to be: <p style="padding-left: 30px">an individual who has entered into or works under (or, where the employment has ceased, worked under) -</p> <p style="padding-left: 30px">(a) a contract of employment, or</p> <p style="padding-left: 30px">(b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual;</p> <p style="padding-left: 30px">and any reference to a worker’s contract shall be construed accordingly.<a href="#_ftn4">[4]</a></p> As explained in <em>Bates van Winkelhof v Clyde &amp; Co LLP</em> [2014] UKSC 32, employment law distinguishes between employees, workers and self-employed. Workers fall into ‘limb (b)’ above. There are three components to satisfy limb (b): <ul> <li>a contract whereby an individual undertakes to perform work or services for the other party;</li> <li>an undertaking to do the work or perform the services personally; and</li> <li>a requirement that the other party to the contract is not a client or customer of any profession or business undertaking carried on by the individual.</li> </ul> <strong>Argument</strong> Uber argued that: <ul> <li>a request to book a private hire vehicle made through the Uber app created a contract between passenger and driver, to which no Uber entity is a party;</li> <li>Uber did no more than provide technology services and act as booking agent for drivers; and</li> <li><em>Autoclenz<a href="#_ftn5"><strong>[5]</strong></a></em> held that a Tribunal may disregard the terms of a written agreement only if there is inconsistency between those terms and how the relationship operated in reality – and there was no such inconsistency in this case.</li> </ul> <strong>SC Decision</strong> Uber<a href="#_ftn6">[6]</a> held the licence with TfL and it did not hold it as agent for the Claimants. &nbsp; Uber therefore was accepting private hire bookings and, to fulfil its obligations to the passengers, entered into a contract with the driver to carry out the service. If wrong, there was no factual basis (from Tribunal) to find Uber were merely acting as agent (paras 45-56). This finding alone would have meant that the conduct of the parties (Uber London and the drivers) would need to have been determined. Doing that would likely render the drivers employees or subcontractors and (very likely) performing work under a limb (b) contract to perform those services. &nbsp; The wider argument focused on the question of whether one starts with the contractual agreement when identifying whether an individual is a worker. The SC held that in <em>Autoclenz</em> (as in the case before it) the question was really one of statutory interpretation, not contractual interpretation. What was being determined by a Tribunal was not what had been contractually agreed, but whether the Claimants fell within the statutory definition of ‘worker’. This reflected the very purpose of employment legislation of this kind – to protect employees (and, therefore, certain people categorised as limb (b) workers) against abuse of a dominant/subordinate employer/employee<a href="#_ftn7">[7]</a> dynamic. Citing the judgment of the EAT in <em>Byrne Bros (Formwork) Ltd v. Baird</em> [2002] ICR 667 <p style="padding-left: 30px"><em>“Thus, the essence of the intended distinction must be between, on the one hand, workers whose degree of dependence is essentially the same as that of employees and, on the other, contractors who have a sufficiently arm’s-length and independent position to be treated as being able to look after themselves in the relevant respects.”</em></p> It would therefore, against that background, be inconsistent with the employment legislation to treat the written agreement as the starting point. Further, clauses in such a written agreement that sought to contract out of rights accrued by virtue of the classification would be void.<a href="#_ftn8">[8]</a> Summarising the position in respect of the relevance of the written agreements: <p style="padding-left: 30px"><em>“This does not mean that the terms of any written agreement should be ignored. The conduct of the parties and other evidence may show that the written terms were in fact understood and agreed to be a record, possibly an exclusive record, of the parties’ rights and obligations towards each other. But there is no legal presumption that a contractual document contains the whole of the parties’ agreement and no absolute rule that terms set out in a contractual document represent the parties’ true agreement just because an individual has signed it. Furthermore, as discussed, any terms which purport to classify the parties’ legal relationship or to exclude or limit statutory protections by preventing the contract from being interpreted as a contract of employment or other worker’s contract are of no effect and must be disregarded.”<a href="#_ftn9">[9]</a></em></p> This led the SC to assess the relationship in the manner commended in <em>Autoclenz</em>, by looking at the reality of it. Factors pointing against a finding of worker status for the Claimants included: <ul> <li>A substantial measure of autonomy and independence;</li> <li>No ‘umbrella’&nbsp; or ‘overarching’ contract was argued – the contractual arrangements did not bind drivers during periods when they were not logged into the app (although it was accepted that freedom to work or not does not preclude worker status)<a href="#_ftn10">[10]</a></li> </ul> However, the SC identified five factors within the ET’s findings that militated in favour of a finding of worker status: <ul> <li>Remuneration for a journey was fixed by Uber;</li> <li>The contractual terms are dictated by Uber;</li> <li>A driver’s choice about accepting requests (once logged in) is monitored and controlled by Uber;</li> <li>The very technology used (and access to it) imposes control over drivers;</li> <li>Restriction in communication between driver and passenger.</li> </ul> It was primarily on those factors that the ET was entitled to find as it did, that the Claimants were limb (b) workers. <em>When did the work begin?</em> It then became necessary for the SC to determine during what periods the Claimants were ‘workers’ for the purpose of assessing rights under the Working Time Regulations 1998 (‘the WTR’) and National Minimum Wage Regulations 2015. The test of identifying an ‘irreducible minimum of obligation’ (approved in <em>Carmichael v. National Power plc </em>[1999] 1 WLR 2042) remained the relevant test. In other words, the existence and exercise of a right to refuse work is not critical, provided there is at least an obligation to do some amount of work. With respect to the WTR test, “working time” is defined in regulation 2(1), in relation to a worker, as “any period during which he is working, at his employer’s disposal and carrying out his activity or duties”. A discrete factual difficulty was that many drivers may be logged into apps for several private hire vehicle providers (i.e. Lyft) as well as Uber’s (although there were no findings to this effect at Tribunal). The SC cited Judge Eady QC in the EAT to the effect that Ubers market share meant that ‘in practical terms’ being logged into Uber’s app meant being at Uber’s disposal. As mentioned, there were no findings at the ET to disturb that assessment. On that approach, the SC held the ET was also entitled to find that a workers contract came into existence when 1) the driver logged into the app, 2) was within the authorised territory and 3) was ready and willing to accept trips.<a href="#_ftn11">[11]</a> <strong>Comment</strong> <span style="text-decoration: underline">Does the decision only apply to the ‘gig economy’?</span> The opening line of the SC decision remarks on the context of the case - that the work is being provided via a ‘digital platform’. The case of course will be relevant in future disputes for all manner of work that attracts the ‘gig economy’ label, but is certainly not limited to the same. The world of work can be fast-changing and many authorities still cited in worker status disputes (<em>Carmichael</em>, <em>Ready Mixed Concrete, Cotswold Developments</em>) pre-date the existence of apps as a medium through which services are obtained and provided. The rights afforded to certain groups of working people have not been shaped by this working world. Trying to fit them into it will not be easy and may continue to give rise to difficult cases. <span style="text-decoration: underline">So does the decision settle all worker status disputes?</span> Probably not. Of course, it may be cited as the leading decision concerning worker status but it, ultimately, restates that each Tribunal must look at the reality of the working relationship to answer the question. The spirit of <em>Autoclenz</em> therefore lives on. That necessarily will give different answers in different factual circumstances. Those relationships may well throw up issues not expressly addressed in Uber, such as the genuineness (and relevance) of substitution clauses (see <em>IWU v CAC / Deliveroo</em> [2018] EWHC 3342). The SC decision does not, of course, determine compensation owed to the Claimants. In particular, the decision that determining working time was by reference to logging into the app was expressly not answered ‘in the abstract’. Findings of fact may need to be mad for any other potential Claimants so as to determine that question. It probably does not even end litigation between Uber and its drivers. Uber has already released a statement to its current drivers indicating that, due to changes in its operations, the ‘judgement [sic] does not apply to drivers who earn on the app today.’ <span style="text-decoration: underline">Has the decision added any gloss to Autoclenz?</span> The SC has ended any argument from employers that Tribunals should begin<a href="#_ftn12">[12]</a> by looking at the written terms. It has also ended any argument that the ‘reality’ approach commended in <em>Autoclenz</em> is only permissible if it is inconsistent with the written terms. The decision certainly puts the concept of subordination front and centre as a touchstone for assessment of worker status (albeit not rising to the level of ‘a freestanding and universal characteristic of being a worker’ as stated in <em>Bates van Winkelhof</em>.) <span style="text-decoration: underline">Last…</span> The Tribunal that decided this issue in 2016 had its reasoning withstand scrutiny at three levels of appeal. No small feat and to be applauded. &nbsp; &nbsp; <a href="#_ftnref1">[1]</a> As found by the Tribunal <a href="#_ftnref2">[2]</a> Correct at time of judgment in 2016. Importantly, Uber contends that a number of these facts are no longer the case. <a href="#_ftnref3">[3]</a> Specifically, Uber London Ltd, a UK subsidiary of Uber BV, the Dutch company. <a href="#_ftnref4">[4]</a> S.230(3). <a href="#_ftnref5">[5]</a> Autoclenz Ltd v Belcher [2011] UKSC 41 <a href="#_ftnref6">[6]</a> As above, Uber London Ltd <a href="#_ftnref7">[7]</a> In the general (non-classification) sense <a href="#_ftnref8">[8]</a> See e.g. s.203 ERA 1996 <a href="#_ftnref9">[9]</a> Para 85 <a href="#_ftnref10">[10]</a> See James v. Redcats (Brands) Ltd [2007] ICR 1006 <a href="#_ftnref11">[11]</a> Although the SC considered the final requirement to not be necessary to a finding of contractual status, albeit was relevant to determining if work was being done. <a href="#_ftnref12">[12]</a> As above, the SC were equally clear that the written contract is not irrelevant to the assessment

Solicitors&#8217; success fee reduced in clinical negligence claim: Chocken V Oxford University Hospitals NHS Foundation Trust [2020] EWHC 3269 (QB)

Case Note by <a href="https://www.parklaneplowden.co.uk/barristers/jade-ferguson">Jade Ferguson</a>.<a href="https://www.parklaneplowden.co.uk/barristers/jade-ferguson"> </a> &nbsp; <strong>Facts</strong> The claim arose from a failure to diagnose compartment syndrome after surgery which left the Claimant with permanent damage to his legs. The Claimant was a Mauritian national with an uncertain immigration status. There was concern that he may be repatriated to Mauritius before the conclusion of his claim. The Claimant instructed solicitors and entered into a conditional fee agreement (‘CFA’) which provided for the following staged success fee: &nbsp; Stage 1 - 50% success fee if concluded before service of proceedings; Stage 2 - 80% success fee if concluded 45 days before the date fixed for trial; Stage 3 - 100% success fee if concluded at any time thereafter. &nbsp; Following the letter of claim, the Defendant admitted breach of duty subject to causation. No offers to settle were made before proceedings were issued. Proceedings were issued on 13<sup>th</sup> February 2015. On 10<sup>th</sup> June, proceedings were served. &nbsp;On 29<sup>th</sup> July 2015, judgment was entered with damages to be assessed. Following various offers and an unsuccessful joint settlement meeting, the case was listed for a 12-day High Court trial. 70 days before the trial was due to commence, settlement was reached in the sum of £2,850,000 lump sum plus periodical payments of £48,000 per annum rising to £85,000 per annum. &nbsp; <strong>Costs Assessment</strong> Master James dealt with the detailed costs assessment. She assessed the Claimant’s costs on the standard basis and assessed the staged success fee at 50%. She found that issuing proceedings did not increase the risk of losing so as to justify a further 30% success fee on top of the 50% pre-issue success fee. &nbsp; <strong>The Appeal</strong> The appeal was heard by Mr Justice Stewart. There were 5 grounds of appeal which are discussed below: <span style="text-decoration: underline">Ground 1 – Hindsight</span> The Claimant submitted that the Master used hindsight in her judgment as she took into account the fact that the Defendant subsequently admitted breach of duty. On appeal, Mr Justice Stewart agreed that if the Master had used hindsight, that would be an error which would require the decision on the success fee to be set aside and the Court to exercise its discretion afresh. However, it was held that the Master had not relied on hindsight. Her references to what had in fact happened were by way of a cross-reference to how reasonable the assessment was at the outset. &nbsp; <span style="text-decoration: underline">Grounds 2 and 3 – the Staging Point</span> The Claimant also submitted that the Master had erred in deciding that issuing proceedings did not increase the risk of losing. The Claimant argued that the Master’s approach ignored the logic of staged success fees as explained in <em>Callery v Gray [2001] EWCA Civ 1117. </em>When the CFA was entered into, the Claimant’s solicitors had no knowledge as to how the Defendant might react to the claim. It was said that following <em>Callery, </em>it was entirely proper to assume that if the Defendant was not prepared to settle on reasonable terms, there was a serious defence. It was submitted that the service of proceedings was therefore a reasonable trigger for the Claimant’s solicitors to set<em>.</em> Mr Justice Stewart found that the CFA in the present case was wholly different from the one suggested in <em>Callery</em>. In&nbsp;<em>Callery,&nbsp;</em>the proposal was of a success fee of 100%, subject to a reduction&nbsp;to&nbsp;5% should the claim settle before the end of the Protocol period.&nbsp;In contrast, the 50% success fee in the present agreement continued to increase in circumstances where the risks were all factored in from the beginning and could, if anything, only decrease e.g. (as happened) by an admission of breach of duty prior to issue of proceedings. This case fell to be considered on its own facts, as Master James had made clear throughout her short judgment. It was held that the level of the success fee and any staging must be justified. In the present case, the Master accepted a 50% success fee as reasonable from the outset, given all the risks (liability, Part 36 and risk of deportation in 2015). However, she did not accept that any increase was justified at the point chosen for stage 2. She considered that 50% was reasonable up to a point close to trial. This was a decision she was entitled to make. She did not fail to take into account factors which she ought to have taken into account: nor did she give inadequate weight to any factors. &nbsp; <span style="text-decoration: underline">Ground 4 – Level of Success Fee</span> The Claimant submitted that, even if the master was right to conclude that the service of proceedings was an unreasonable trigger point, she was wrong to conclude that the second stage success fee ought to be limited to the same level as the first success fee. Following the decisions on the above grounds, it is unsurprising that this ground was also unsuccessful. It was held that the Master found, having regard to all the relevant risks, a 50% success fee was reasonable up to and including the point at which the case settled. &nbsp; <span style="text-decoration: underline">Ground 5 – Assessment</span> The Claimant initially argued that the Master failed to consider that the Claimant was a Mauritian national whose immigration status was uncertain. However, at the hearing, the Claimant conceded that this ground was based on a misreading of the judgment and the ground was no longer pursued. The appeal was dismissed. &nbsp; <strong>Key Points and Comment</strong> <ul> <li>The Court must consider the facts and circumstances as they reasonably appeared at the time the CFA was entered into when assessing he reasonableness of the success fee.</li> </ul> <ul> <li>A staged fee agreement does not always justify a higher success fee closer to trial. The question was whether the level of risk justified the success fee at the time the CFA was signed.</li> </ul> <ul> <li>The risk of litigation will be assessed from the viewpoint of a reasonably careful solicitor based on what knowledge they had at the time of entering the CFA.</li> </ul> <ul> <li>The complexity and value of the claim does not necessarily increase the risk of losing, although there might be more difficulties in such cases.</li> </ul> <ul> <li>The Claimant relied on the case of <em>Callery</em>, a case which was decided in the context of low value road traffic accident claims. Practitioners ought to be cautious when relying on such cases in a clinical negligence context.</li> </ul> <ul> <li>In this case, the logic behind the two-stage success fee was based on the presumption that if the Defendant did not agree to settle on reasonable terms, there was a serious defence. However, it was held that there was no set point for the triggering of a stage in a staged success fee.</li> </ul> <ul> <li>The basis for determining reasonableness is not the trigger point. The reasonableness is based on whether the success fee was set at a level which was reasonable in light of non-recovery of costs anticipated at the date of the CFA being entered into. Therefore, although the Claimant can choose the date of staging, if an earlier trigger for a higher second stage success fee is chosen then the Claimant must justify the higher risk of non-recovery fees at an earlier stage.</li> </ul> <strong>&nbsp;</strong> A copy of the judgment is available <a href="https://www.bailii.org/ew/cases/EWHC/QB/2020/3269.html">here</a>. &nbsp; This article was written by <a href="https://www.parklaneplowden.co.uk/barristers/jade-ferguson">Jade Ferguson</a>. Jade has experience predominantly in our civil practice with specialist experience in <a href="https://www.parklaneplowden.co.uk/expertise/clinical-negligence">clinical negligence</a>, <a href="https://www.parklaneplowden.co.uk/expertise/inquests-fatal-accidents">inquests</a>, <a href="https://www.parklaneplowden.co.uk/expertise/personal-injury-">personal injury</a> and <a href="https://www.parklaneplowden.co.uk/expertise/employment">employment</a> law.

Conduct in financial remedy proceedings: does deception produce &#8216;the gasp factor&#8217;?

An analysis of the recent case of <em>FRB v DCA</em> [No. 2] [2020] EWHC 754 (Fam) in light of the applicable law and authorities on conduct.&nbsp; Cohen J found that the wife’s actions in deceiving the husband about whether the child was in effect his biological child would amount to conduct ‘so egregious that it would be inequitable to disregard’, but refused to reduce the wife’s award in light of the husband’s seriously deficient disclosure.&nbsp; The husband’s litigation conduct and the wife’s reprehensible personal conduct therefore cancelled each other out. This begs the question of whether, had the husband fully complied with his disclosure obligations, her award would have been effectively reduced as a result of her deception.&nbsp; The case itself featured numerous complexities and was heard over the course of 15 days (the husband having instructed 2 QCs). Cohen J described the dispute as a ‘gladiatorial combat’ and observed ‘I know of no other case where the breakdown of a marriage has engendered litigation on the scale witnessed in this case’.&nbsp; Facts in brief: both parties came from extremely wealthy Indian families, spending approximately £10m per year and flying around the world in private jets. At the time of the financial remedy proceedings, it was known that the child thought to be the child of the marriage was in fact another man’s child. The parties had married in 2003 and the child had been born in 2011. After the marriage broke down, the husband heard a rumour that the wife had had an affair. A paternity test was conducted in 2018 and confirmed that the husband was not the child’s biological father. The wife admitted to the liaison, but claimed that she had no suspicions that the child was anything other than the husband’s biological father.&nbsp; The husband pleaded that the wife’s deception amounted to conduct that would be inequitable to disregard under section 25(2)(g) MCA 1973. The husband argued that the wife’s share to the matrimonial assets should be reduced by 50%, given that the child had been conceived mid-way through the marriage and, had he known at the time, he would have terminated the relationship.&nbsp; Section 25(2)(g) MCA 1973 requires the court to consider the conduct of each party, if the conduct is such that it would be inequitable to disregard it. This section was introduced by reason of MFPA 1984.&nbsp; Prior to this, the court was required to exercise its powers to grant financial remedies&nbsp; 'as to place the parties, so far as it is practicable and, having regard to their conduct, just to do so, in the financial position in which they would have been if the marriage had not broken down and each had properly discharged his or her financial obligations and responsibilities towards the other'. The guidance in<em> Wachtel v Wachtel</em> [1973] 1 All ER 829 provided that, short of the conduct being 'both obvious and gross', the court should not decline to award any financial support or to reduce its order for financial provision merely because of what was formerly regarded as guilt or blame.&nbsp; In <em>Miller / McFarlane</em> [2006] UKHL 24, Lady Hale endorsed the Wachtel guidelines and stated that this approach is ‘not only just, it is also the only practicable one. It is simply not possible for any outsider to pick over the events of a marriage and decide who was the more to blame for what went wrong, save in the most obvious and gross cases.’&nbsp; What, then, are the most ‘obvious and gross cases’? Since the introduction of section 25(2)(g), the courts heard a flurry of cases which have ranged from the ‘standard’ bitter divorce to the utterly unbelievable. Some examples include: attempted murder resulting in 12 years’ imprisonment (<em>H v H (financial relief: attempted murder as conduct) </em>[2005] EWHC 2911 (Fam)), a knife attack disabling the wife from working (<em>Jones v Jones</em> [1976] Fam 8), GBH and attempted rape (<em>H v H (financial provision: conduct)</em> [1994] 2 FLR 801), ‘grave marital misconduct’ which included keeping an elderly husband in a smaller part of the house whilst cohabiting with her lover, coercing the husband into transferring significant sums of money, coupled with the refusal to accept a generous open proposal (<em>Clark v Clark</em> [1999] 2 FLR 498).&nbsp; The expression ‘gasp factor’ derives from the case of <em>S v S (non-matrimonial property: conduct)</em> [2007] 1 FLR 1496, where the court heard about a number of significant incidents of domestic violence. In one of these incidents, the husband had chased the wife up to bathroom, where she had fallen against the shower rail, cutting her head; moments earlier she had smashed his grandfather clock (who has not come across a dispute about the grandfather clock?). The judge concluded that the sad history of the marriage may leave him with what might be called a 'gulp gasp? factor' arising out of what each of the parties did to each other, verbally and physically. He was not, however, left with the ‘gasp factor’ as eloquently argued by Mr Mostyn QC (as he then was).&nbsp; Against the backdrop of the above extreme examples on conduct, it is surprising that Cohen J would have been prepared to accept the husband’s argument, were it not for the fact that the husband himself had engaged in litigation misconduct. Cohen J had accepted that the wife did not know she had carried another man’s child, but found it impossible to believe that the thought had never crossed her mind. His Lordship accepted that the wife ‘was very anxious to believe that the husband was the father and as time went on put the alternative to the back of her mind’. Cohen J concluded that the consequences of her deception on the husband had been ‘devastating’, but did not reduce her award because to do so would have been a ‘double jeopardy’ in light of the husband’s conduct.&nbsp; Courts have historically discouraged parties from relying on conduct, only accepting the argument in the most extreme cases. It is hard to reconcile this approach with Cohen J’s analysis, especially because the wife’s reprehensible personal conduct did not have any significant financial consequences on the husband. &nbsp; &nbsp;