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21 January 2015
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EL fixed success fees “do not apply” to members of the armed forces

Members of the armed forces are not employees and so employers’ liability claims they make are not subject to the pre-1 April 2013 fixed success fee regime, the High Court has ruled.

In overturning two decisions of Master O’Hare and one of Deputy Master James, Mr Justice Supperstone said he had been told there were still a significant number of pre-Jackson claims in the system that would be affected by his decision.

CPR 45.20 defined an employee by reference to section 2(1) of the Employers Liability (Compulsory Insurance) Act 1969 as “an individual who has entered into or works under a contract of service or apprenticeship with an employer… whether such contract is expressed or implied, oral or in writing”.

Master O’Hare ruled that members of the armed services do have a ‘contract of service’, while recognising he was “using those words in a way which is wider than the way in which they [are] used in the 1969 Act”.

However, in Broni and Ors v Ministry of Defence [2015] EWHC 66 (QB), Robert Marven argued for the claimants that the law is clear that a serving member of the armed services is not an employee under a contract of service and there was no proper basis for construing part 45 more broadly.

For the Ministry of Defence, Mark James called for a purposive approach to the construction of the words ‘contract of service’.

Supperstone J found there was “no scope for giving a broad or purposive interpretation” to rule 45(20) different from the specific meaning given to the term ‘employee’ by the 1969 Act.

“The Ministry of Defence owe a duty of care to servicemen whether they work under a contract of service or not, both at common law and under the Health and Safety at Work Act 1974,” he added.

The judge did see “some force” in Mr James’s submission as to the practical difficulty at detailed assessment of this ruling, but it was not enough to sway him.

Mr James had said acceding to the claimants’ argument would mean that in every employers’ liability case (other than where the parties were agreed), the court would have to investigate whether at the time the cause of action arose the claimant had entered into, or was working under, a contract of service, which would not be straightforward. Not only would the relevant documents need to be considered, but also the surrounding circumstances and the parties’ true intentions, including how the contract actually worked in practice.

“Further, Mr James observes that where the question of whether there was a contract of service or a contract for services would not have been an issue in the main proceedings, the detailed assessment before the costs judge is likely to involve the presentation of written, maybe oral, evidence, and the costs to the parties will be greatly increased.”

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