Hayward v Zurich Insurance Company plc

Trinity Term

[2016] UKSC 48

On appeal from: [2015] EWCA Civ 327

LORD CLARKE: (with whom Lord Neuberger, Lady Hale and Lord Reed agree)

Introduction

1.                   In April 2012 the Supreme Court considered a case called Summers v Fairclough Homes Ltd [2012] UKSC 26, [2012] 1 WLR 2004, where the facts were strikingly similar to those here. In that case, as in this one, the claimant suffered an injury at work which was caused by the negligence or breach of duty of his employer. In each case the employer was either held liable (in Summers) or admitted liability (here) as to 80%, the claimant accepting that he was 20% to blame. In each case the claimant dishonestly exaggerated the extent of the consequences of the injury. In Summers the claimant originally claimed damages of over £800,000 but was awarded a total of just over £88,000 on the basis of the true facts, which came to light after undercover surveillance evidence showed that his account of the consequences of his injuries had been grossly and dishonestly exaggerated. In the instant case, the claimant, Mr Colin Hayward, claimed £419,316.59 (exclusive of promotion prospects but discounted for loss of ill health pension). He was ultimately awarded £14,720 after a trial before His Honour Judge Moloney QC (“the judge”). The reason for the reduction was again partly as a result of undercover surveillance and other evidence that showed that Mr Hayward’s claim had been grossly and dishonestly exaggerated.

2.                   In Summers the issue was what remedies were available to the employer and its insurers, whereas in the instant case the issue arises out of a settlement agreement reached between the parties on 3 October 2003, the accident having occurred on 9 June 1998. The agreement was made shortly before the issue of quantum was due to be tried and was incorporated in a Tomlin Order. The employer’s case was conducted on its behalf by its liability insurer, Zurich Insurance Company Plc (“Zurich”), which is the appellant in this appeal. The employer (in practice Zurich) agreed to pay £134,973.11, inclusive of CRU of £22,473.11, in full and final settlement of Mr Hayward’s claim.

3.                   The Tomlin order was in familiar terms as follows:

“BY CONSENT

IT IS ORDERED THAT

All further proceedings in this action be stayed, except for the purpose of carrying such terms into effect. Liberty to apply as to carrying such terms into effect.

…

THE SCHEDULE

The claimant accepts in settlement of his cause of action herein the sum of £134,973.11.

…

4.         Upon payment by the defendant of the several sums and costs before mentioned, they be discharged from any further liability to…