On 2 October 2000 the Human Rights Act 1998 came into force in England. Its effect was to incorporate into domestic law most of the 1953 European Convention for the Protection of Human Rights and Fundamental Freedoms. Although the UK was the first signatory to this convention, only now has it become truly accessible and enforceable in England, though as a result, the introduction of the Act will probably lead to a large number of new claims, particularly as litigants and the courts explore this new ground in the early years.

The Act aims to give both individuals and companies certain fundamental rights. Of most relevance to the commercial world are:

  • Article 1 - Right to peaceful enjoyment of property;

  • Article 2 - Right to life;

  • Article 6 - Right to fair procedures in civil and criminal proceedings (the so-called right to a “fair trial”);

  • Article 8 - Right to respect for private and family life;

  • Article 10 - Freedom of expression; and

  • Article 14 - Right to equality.

    Civil claims under the Act are already underway, and there are a number of likely implications for insurers and reinsurers.

    Explosion in litigation?

    Since the Act came into force, court staff in England have been issuing proceedings which include human rights claims on a daily basis. Initial indications are that there is a steady flow of claims under the Act, but not the flood of cases some predicted.

    Perhaps the most high profile case lodged to date is that by the singer/songwriter, Sting, and fellow landowners in Wiltshire objecting to the proposed increase in air traffic at the Ministry of Defence (MOD) airfield in Boscombe Down. The MOD, as part of the Government, is exempt from planning controls although the local council is able to object to the scheme. This objection would then be considered by the Deputy Prime Minister, John Prescott. The claims are being pursued under Article 6 on the basis that the Government, as landowner and decision maker, has a clear conflict of interest and is therefore in breach of the right to a fair hearing under Article 6.

    Most cases will not be claims brought solely under the Act; in many cases, the Act is being used to supplement self-standing claims based on existing English law. Litigation started now under the Human Rights Act, however, will take a year or more to reach judgment, so it will be some time before we begin to see the full effects of the legislation. In the meantime, for cases where the Act does not strictly apply, there are indications that some courts are applying the “spirit” of the Act, where possible.

    Why should we expect new claims?

    The Act has made human rights much more accessible. Decisions of the European Court of Human Rights are available on the internet and in specialist law reports. Dozens of new textbooks have appeared to guide English lawyers through the new rights available to their clients and the Court Service has issued a “user friendly” guide to the public for bringing claims under the Act. In short, the law of human rights has become easily accessible to claimants and their legal advisers.

    For their part, legal advisers must now inform themselves and advise their clients on the possible impact of the Act on their rights and legal disputes. To overlook the Act as a possible source of redress or exposure would be to invite a negligence suit.

    In the past, the only redress for infringement of a convention right was a long, slow and expensive trip to the European Court of Human Rights in Strasbourg, and that only after all local remedies had been exhausted. This route is still available for violations of convention rights that took place before October 2000 or where there is no effective remedy in the UK. Now, for the first time, a claim for infringement can be brought in England using local courts and lawyers and following familiar procedures, although courts and lawyers alike are starting out with limited - if any - experience of human rights law at a local level.

    The Act has created a new kind of claim: breach of a convention right. Those particularly in the firing line will include local, police and health authorities, schools and the courts. Local authorities can expect to see a significant growth in environmental and educational claims. For example, Article 1 creates a right to protection of property. A group of homeowners whose properties are blighted by the local authority's proposals to build a raised dual carriageway outside their bedroom windows might wish to complain that this right had been infringed. The concept of “proportionality” is a key issue when assessing whether there has been breach of a convention right; the local authority might wish to rely on the defence (available under the Act) that its decision was taken in the public interest. The homeowners might have no other legal remedy, but provided their complaint relates to the acts or omissions of the local authority after 2 October 2000, they could now bring an action against the local authority in their local court claiming damages for infringement of their convention rights and an injunction ordering the authority to take appropriate remedial action. Individual claims may not in themselves generate large damages awards, but in those cases where groups of claimants marshal themselves and pursue class actions (permissible under the new Woolf regime), significant aggregated exposures could arise for insurers and reinsurers alike.

    Convention rights may also be invoked in other legal proceedings before courts or tribunals, including appeals. For example, in Hall v Simons a claim was brought for professional negligence against a barrister. This claim faced a seemingly insurmountable problem and was struck out because English law has for centuries given advocates complete immunity from negligence claims, at least in relation to their performance in court.

    In a landmark decision, the House of Lords did away with this immunity in July 2000. Most of their Lordships did so without reference to the convention, which was not yet in force, but three thought the claimant had been denied access to the courts, contrary to Article 6 of the convention. (As a foretaste of a debate still to come, the House of Lords was split as to whether the immunity was justified, in the public interest, in criminal cases.)

    In a wider commercial context, employment claims (for example, based on sex or race discrimination) are likely to arise under the Act (Article 14), although given the existing legislation in this area, this is thought less likely to result in enhanced damages awards.

    By contrast, the right to privacy (Article 8) is considered by many to be a fertile area for new claims. An increase in internet- and e-commerce-related claims is expected, although these will again probably be made in conjunction with recently introduced data privacy laws in the UK. Insurers themselves may be exposed under the Act. For example, inappropriate claims investigations or over zealous surveillance operations could be attached as an infringement to the right to privacy (Article 8).

    The English courts must “take into account” previous awards made by the European Court of Human Rights whenever they consider a convention point, although they are not bound to follow those decisions. Specifically, when awarding damages for a violation, English courts must take into account the principles applied by the European Court when awarding compensation.

    Traditionally, awards by the European Court have been unpredictable but relatively small by English law standards. The Court Service offers this guidance on the issue: “The level of damages awarded by the European Court of Human Rights is generally modest and in some cases the court may consider that a judgment in favour of the victim is all that is needed.” The English courts have a long habit, where an unlawful act has caused loss, of awarding damages to compensate for such loss. If the unlawful act was actually a violation of human rights, it may be difficult to persuade an English court that the damages should be less, in view of lower awards in similar cases made by the European Court. One exception may be where a litigant has suffered loss as a result of the court's infringement of Article 6.

    There are some limits on the enforceability of convention rights. In particular, an action to enforce convention rights can only be brought by a “victim” against a “public authority” or person exercising “functions of a public nature”. However, because the courts are public authorities, and therefore bound to act compatibly with convention rights in all cases, it is anticipated that a wide range of litigants will be able to argue that the courts should uphold their convention rights, even in their private disputes. For example, summary judgment or strike out applications may be challenged on the basis that it deprives a litigant of a fair trial, although the courts have been keen to point out that the Act should not defeat of the spirit of the “streamlined” new court procedure rules introduced by Lord Woolf in 1999. As the Lord Chancellor said when the Act was going through Parliament: “It is right as a matter of principle for the courts to have the duty of acting compatibly with the convention, not only in cases involving other public authorities, but also in developing the common law in deciding cases between individuals.”

    The future

    As the Act has only been effective for a couple of months, re/insurers need to closely monitor cases progressing through the courts. Many of the claims being pursued under the Act are adjuncts to claims which can be made under existing English statute. Will claims under the Act result in increased exposures for the insurance industry? The answer is probably yes, but the jury is still out on this issue.

    Michelle George is a partner in Denton Wilde Sapte's Insurance and Reinsurance Group with particular expertise in reinsurance and professional indemnity claims. For further information, please contact mig@dentonwildesapte.com