The round-up of the stories that a budding Student Lawyer should be aware of this week. Sign up here to get these updates in your inbox every week.
Can a company require its workers to have the COVID-19 vaccination?
Reported by Katie Henderson
Require its workers to have the COVID-19 vaccination is something which Pimlico plumbers intends to do. The London plumbing firm has made plans to re-write all their workers contracts requiring them to be vaccinated against the virus. This will include the 350 plumbers working as contractors and 120 employees. Whether any exceptions are made, will be decided on a case by case basis. The chairman Charlie Mullins has stated that these vaccines, when available would be paid for by the firm. He has set aside a sum of £800,000 to cover these potential costs.
Although he states there is no pressure being applied, he has ensured that new starters without the vaccine will not be taken on. He justifies this by viewing it as ‘safeguarding’ his staff and insists it is a ‘no brainer’ that everyone should be required to be immunized.
On the other hand, a request to take the vaccine, could be seen as ‘reasonable instruction’ on the basis that refusal could put lives at risk. This will depend on the particular circumstances. For example, a company in the care sector would have a stronger argument as they would want to protect vulnerable individuals. As opposed to a commercial company where workers are able to work from home. A dismissal on this basis would be a ‘fair dismissal’ but only if the employee had refused unreasonably. Whether or not the refusal was unreasonable would be decided through the correct procedures; ensuring the employee has a chance to explain the rationale for their decision.
Pinsent Masons is encouraging employers to take legal advice before making any decisions resulting in detriment to individuals who have refused to take the vaccine.
Court of Appeal clarifies the law on Damage Based Agreements: Zuberi v Lexlaw Ltd  EWCA Civ 16
Reported by Jasmine Cracknell
Last week the Court of Appeal clarified an unclear area of the law on damage based agreements (DBAs) which has deterred legal professionals from using such agreements since their introduction in 2013.
DBAs were introduced under the Damages-Based Agreements Regulations 2013, which were part of the wider ‘Jackson’ reforms led by Sir Rupert Jackson. The regulations established the use of DBAs in civil litigation with the aim of improving access to justice.
DBAs are a type of fee arrangement that provides clients will only pay their legal representative’s fees if they win, in which case the fee will be a percentage of the damages awarded.
DBAs have been rarely used because the regulations that underpin them have been unclear since they were introduced. The main issue was the rules on termination clauses. Before the Court of Appeal’s ruling, it was thought that any inclusion of a termination clause which prompted a payment rendered the whole DBA unenforceable, leaving the solicitor unable to recover any of their costs if their client terminated the agreement. This was an issue for legal representatives as it was very unclear what would happen if a case was concluded early.
This uncertainty has finally been addressed in the Court of Appeal’s eagerly anticipated ruling in Zuberi v Lexlaw Ltd. The court stated that the inclusion of termination clauses is not a breach of the regulations and that such clauses do not make DBAs unenforceable. In coming to its decision, the court highlighted the importance of giving effect to Parliament’s intentions when it created the 2013 regulations.
The majority of the judges (Lewison LJ and Coulson LJ, with Newey LJ dissenting) also held that the 2013 regulations only apply to the part of the agreement that covers the DBA arrangements. This potentially means that other free standing elements of a DBA (like termination clauses) are not caught by the regulations. The Bar Council says that this ‘now paves the way for various types of hybrid agreements.’
Karim Oualnan, a solicitor and partner with Lexlaw, said ‘It is common knowledge within the profession that the DBA regs put in place by the Ministry of Justice have a number of gaps and are not user-friendly. However, it is wholly disingenuous for a client to terminate a funding agreement with a solicitor (after that solicitor has taken the risk of funding the claim to conclusion and obtained a successful outcome) and expect no liability to the solicitor: that is clearly not parliament’s intention when it enacted the DBA regs.
‘The Court of Appeal has clarified some of these uncertainties and provides the opportunity for DBAs to flourish and enhance access to justice as intended.’
Supreme Court landmark insurance case
Reported by Laurence Tsai
The Covid-19 pandemic caused heavy financial losses and distress to businesses around the country, many of which have insurance policies to cover them against loss arising from business interruption (“BI”) due to various causes. BI is a key element of commercial policies, where firms can claim pay-outs if it cannot trade as usual owing to an unexpected event. Accordingly, thousands of businesses claimed they should receive pay-outs under such policies, but the insurers declined to pay on the ground that the policies do not cover effects of the pandemic.
The Financial Conduct Authority (“FCA”) brought a test case on behalf of policyholders urgently seeking legal clarity on the issue. The FCA was successful on many issues at first instance, yet appealed on issues it did not succeed at trial. Both sides appealed directly to the Supreme Court (“UKSC”), known as the “leapfrog” procedure (enables an appeal, in exceptional circumstances, to bypass the Court of Appeal and proceed directly to the UKSC).
On 15th January 2021, the Supreme Court (“UKSC”) issued a landmark ruling on the eagerly awaited judgement of BI insurance. It “substantially allowed” the FCA’s appeal on behalf of policyholders, many of whom are small and medium enterprises (“SMEs”). This ruling means that many policyholders will have their claims for Covid-19-related business interruptions paid. The outcome of this litigation could potentially affect 370,000 policyholders, who hold 700 types of policies across 60 different insurers, and estimated the total value of claims to be £1.2bn.
Many BI policies only covers for physical damage to premises, which would not be eligible for pay-outs linked to the pandemic. However, in some cases the wording refers to an outbreak of a “disease” within the vicinity, or a “denial of access” to premises following public authority action taken due to an emergency. According to the ruling, policyholders may be able to claim a pay-out.
The court addressed the six issues on appeal :
Following the UKSC’s decision, the insurance industry is expected to pay out over £1.8bn in Covid-19-related claims to the first lockdown, which includes BI policies. This ruling will be welcomed by SMEs who are struggling to stay afloat through the pandemic.
The court ruled that cover may be available for partial closure of premises (as well as full closure) and for mandatory closure orders that were not legally binding, and that valid claims should not be reduced because the loss would have resulted in any event from the pandemic. Thus, more policyholders will have valid claims and some pay-outs will be higher.
It is understood that this test case removes the need for policyholders to resolve issues of critical importance individually with their insurers. The case does not encompass all possible disputes, but intends to resolve key contractual uncertainties and causation issues to provide clarity and guidance for policyholders and insurers.
The FCA stated that each policy must be considered against the detailed judgment to understand the specific operation of that policy. The FCA also stated it will be working with insurers to ensure they pay the claims expeditiously, making interim payments wherever possible.