Section 1 of the Act makes statutory provision that, in determining whether the omission of certain steps amounts to a breach of duty, the court may consider whether such steps, had they been performed, would prevent some desirable activity. For example, the court must consider whether precautionary and defensive measures might prevent something socially useful. Though this principle had often been observed by the common law, the Act places it on a statutory footing. Section 2 stipulates that, in the event of an accident, an apology or offer or redress, such as paying for medical treatment, is not, of itself an admission of liability. Sections 1 and 2 came into force on royal assent on 25 July 2006.
Damages
Section 3 reverses the common law rule on allocation of damages in various mesothelioma claims arising from unlawful exposure to asbestos. In 2002, the House of Lords ruled in Fairchild v Glenhaven Funeral Services Ltd that, where several parties had unlawfully exposed the claimant to asbestos and risk of pleural and peritoneal mesothelioma, all were liable for his injury, even though the claimant could not prove which individual party had provided the asbestos fibers that cause the disease. However, in Barker v Corus plc the House of Lords took Fairchild further and held that the parties who contributed to the risk were severally but not jointly liable. This meant that any single tortfeasor was liable to compensate the loss that the claimant suffered from mesothelioma only to the extent that that tortfeasor was itself responsible for the increase in risk. E.g. if the tortfeasor that the claimant chose to sue was found to have only contributed 20% of the total increase in risk, then the claimant was awarded damages at 20% of the total loss that he is reckoned to have suffered as a result of the mesothelioma. This meant that if the claimant wanted to be compensated for his full loss, he had to separately sue all tortfeasors. Section 3 effectively reversed the House of Lords decision in Barker by making all tortfeasors jointly and severally liable for the mesothelioma so that a claimant can recover compensatory damages for their full loss from any individual tortfeasor that materially increased the risk of mesothelioma. If a claimant does so, then the sued tortfeasor has the right to claim a contribution from any and all other tortfeasors that also materially increased that risk, proportionate to the extent by which each tortfeasor increased that risk. To illustrate, if X gets mesothelioma from exposure at work, and he has worked for companies A Ltd., B Ltd., and C Ltd., each of which materially increased the risk of mesothelioma occurring in him, then X can choose any of the companies to sue. Suppose X sues C Ltd., then the court will award to X, and order C Ltd. to pay, damages totalling compensation for all of the loss he has suffered due to mesothelioma. Thereafter, C Ltd. can bring proceedings against A Ltd. and B Ltd., demanding from each a payment of a proportion of the total damages C was ordered to pay to X, corresponding to the proportion by which each company increased the risk of mesothelioma of the total increase in risk in X. Further, section 3 is "treated as having always had effect" and also extends to Scotland and Northern Ireland.
Claims management companies
Part 2 of the Act seeks to regulate the provision of claims management services. As of 23 April 2007, an individual or a corporation may not provide claims management services by way of business unless authorised, exempt or otherwise in receipt of a waiver. The Act creates a Claims Management Services Regulator to authorise and regulate claims management companies and to :
Promote good practice, in particular as to the provision of information about charges and other matters to users;
Promote practices likely to facilitate competition;
Ensure that arrangements are made for the protection of users, including complaints handling.
It is a crime for an unauthorised person to provide or offer claims management services, or to pretend to be authorised. Offenders are punishable, on summary conviction, by a fine of up to level 5 on the standard scale or 51 weeks' imprisonment. If convicted on indictment in the Crown Court, offenders can be sentenced to an unlimited fine or two years' imprisonment. Where a corporate crime is committed, the offender can only be fined and not imprisoned. The Regulator may investigate unauthorised trading and seek an injunction to prevent it or bring a criminal prosecution. It is a crime to obstruct the Regulator, punishable on summary conviction by a fine of up to level 5 on the standard scale. Section 12 creates a Claims Management Services Tribunal to which a person may appeal a decision of the Regulator about authorisation. There is a further route of appeal to the Court of Appeal. The Regulator may also refer complaints or questions about the professional conduct of a claims management company to the Tribunal. Part 2 came progressively into force from 1 December 2006., only section 13 remains to be brought into force.
Section 16 - Commencement
The following orders have been made under this section:
