DMFD156 Personal Injury Settlements – 2022-23

1.1 Report LFC-0645y to the London Fire Commissioner (LFC) sets out the background for the request to approve expenditure for the LFC to commit expenditure on personal injury (PI) claims for the amounts set out in part 2 of the decision, in respect of settled claims in 2022-23.

1.2 The majority of PI claims (or indeed the settlement of any other litigation) are less than £150,000; and are settled under the delegation provided in the LFC Scheme of Delegation, which provides for the settlement of any claim, including claims for costs, by or against the LFC up to £150,000 by General Counsel. Decisions to settle over £150,000 are a matter for the LFC and trigger the current Mayoral Direction of 2018, requiring the LFC to seek the prior approval of the Deputy Mayor before “[a] commitment to expenditure (capital or revenue) of £150,000 or above as identified in accordance with normal accounting practices…” PI cases are settled on the basis of advice provided by specialist counsel, which relies on well-established guidelines on damages, and on previous reported legal cases that set precedents and principles, and in relation to legal costs, on the advice of a costs draftsman experienced in such matters.

1.3 The procedure for dealing with high-value claims is not straightforward, especially if liability and/or causation are in dispute. The final value of these claims is often only fully quantified as the parties progress through the litigation process. The risk of not being able to negotiate settlement of these high-value claims at short notice is the LFC being penalised in terms of additional costs and reputationally, by being perceived as delaying settlement.

1.4 The main type of claims that are likely to exceed the amount that triggers the Deputy Mayor’s prior approval and exceeds the current LFC delegation to General Counsel are:

• mesothelioma
• possibly other asbestos-related claims (asbestosis, lung cancer)
• cancer-related claims
• psychiatric injuries (usually PTSD)
• any claim that results in a medical retirement.
  

2.1 Under the way the current governance arrangements are implemented, each case would need to be presented for prior approval and decision, as and when the final figures and counsel’s advice are available. In litigation terms, this has the potential for delay resulting in increased costs, and for another urgent approval for the LFC to commit expenditure being requested. The current procedure also does not lend itself to unforeseen events that occur in the litigation between the period of the Deputy Mayor’s approval, the LFC’s decision and final settlement.

2.2 It is recognised that the number and costs of cases received have a budgetary implication. Accordingly, it is proposed that this arrangement be subject to reporting mechanisms to the Deputy Mayor. This would include notifying the Deputy Mayor of cases where expenditure may exceed £150,000; and notifying the Deputy Mayor of confirmed costs when such cases are settled. The Deputy Mayor will also receive an update at the end of 2022-23 on expenditure incurred on PI claims under this authority.

2.3 The authority sought is limited to the financial year 2022-23. Its use and effectiveness would be reviewed prior to any proposal to extend the authority for future years.

3.1 The LFC, and the Deputy Mayor for Fire and Resilience, are required to have due regard to the Public Sector Equality Duty (section 149 of the Equality Act 2010) when taking decisions. This in broad terms involves understanding the potential impact of policy and decisions on different people, taking this into account, and then evidencing how decisions were reached.

3.2 It is important to note that consideration of the Public Sector Equality Duty is not a one-off task. The duty must be fulfilled before taking a decision, at the time of taking a decision, and after the decision has been taken.

3.3 The protected characteristics are: age, disability, gender reassignment, pregnancy and maternity, marriage and civil partnership (but only in respect of the requirements to have due regard to the need to eliminate discrimination), race (ethnic or national origins, colour or nationality), religion or belief (including lack of belief), sex, and sexual orientation.

3.4 The Public Sector Equality Duty requires decision-takers in the exercise of all their functions, to have due regard to the need to:

• eliminate discrimination, harassment and victimisation and other prohibited conduct
• advance equality of opportunity between people who share a relevant protected characteristic and persons who do not share it
• foster good relations between people who share a relevant protected characteristic and persons who do not share it.

3.5 Having due regard to the need to advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it involves having due regard, in particular, to the need to:

• remove or minimise disadvantages suffered by persons who share a relevant protected characteristic where those disadvantages are connected to that characteristic
• take steps to meet the needs of persons who share a relevant protected characteristic that are different from the needs of persons who do not share it
• encourage persons who share a relevant protected characteristic to participate in public life or in any other activity in which participation by such persons is disproportionately low.

3.6 The steps involved in meeting the needs of disabled persons that are different from the needs of persons who are not disabled include, in particular, steps to take account of disabled persons' disabilities.

3.7 Having due regard to the need to foster good relations between persons who share a relevant protected characteristic and persons who do not share it involves having due regard, in particular, to the need to:

• tackle prejudice
• promote understanding.

3.8 There are no specific equality implications arising from this report.

Workforce comments

4.1 As this report concerns individual issues, no staff-side consultations have been undertaken.



Sustainability and procurement implications

4.2 There are no sustainability or procurement implications arising from this report.

Conflicts of interest

4.3 There are no conflicts of interest to declare from those involved in the drafting or clearance of this decision.

5.1 This report recommends that authority is delegated to settle all PI claims up to an amount contained in part 2 of this report, including costs of up to the amount contained in part 2 of this report. The totality of these claims must not exceed £1,800,000, otherwise there will be a requirement for Deputy Mayor’s approval. Within 2021-22 there is core funding of £1,000,000; and the 2022-23 budget process has identified a further growth requirement of an amount contained in part 2 of this report. The 2022-23 draft budget proposal therefore includes an amount contained in part 2 of this report as base funding. There is currently forecasted to be an amount, as contained in part 2 of this report, remaining within the Compensation reserve as at 31 March 2022; therefore, currently identified resources total the amount contained in part 2 of this report. The residual balance may be funded through the reallocation of reserves at year-end; however, this must be considered as part of the use of reserves strategy, and prior approval must be granted by the Deputy Mayor.

5.2 There are no direct financial implications for the GLA.

6.1 Under section 9 of the Policing and Crime Act 2017, the LFC is established as a corporation sole with the Mayor appointing the occupant of that office. Under section 327D of the GLA Act 1999, as amended by the Policing and Crime Act 2017, the Mayor may issue to the LFC specific or general directions as to the manner in which the holder of that office is to exercise his or her functions.

6.2 By direction dated 1 April 2018, the Mayor set out those matters, for which the LFC would require the prior approval of either the Mayor or the Deputy Mayor for Fire and Resilience (the Deputy Mayor). Paragraph (b) of Part 2 of the said direction requires the LFC to seek the prior approval of the Deputy Mayor before “[a] commitment to expenditure (capital or revenue) of £150,000 or above as identified in accordance with normal accounting practices…”.

6.3 The proposals in this report seek to provide authority to the LFC to settle PI claims in excess of £150,000. Accordingly, this falls within those matters set out in the 2018 Direction, and therefore requires prior approval of the Deputy Mayor. It is understood that authority to settle claims would be delegated by the LFC to the LFC’s General Counsel.

Part 1 of report LFC-0645y – Personal Injury Settlements – 2022-23