Pleural Plaques and Beyond

Content

Editorial 2

Pleural plaques and beyond

John Mackenzie 3

Liability for psychiatric loss: a patchwork quilt?

Val Jones 5

Mesothelioma and breach of duty:a moribund defence?

Matthew Harrington 7

CA costs spotlight

Adam Burrell 9

Access to justice – three current issues

Alistair Kinley and Christopher Coughlin 10

Third party motor fraud: a shift in judicial attitude?

Raymond Southern 13

Insurance law: some recent developments

Catherine Hawkins 15

Corporate manslaughter: grip tightens on company failure

Rodney Wilson 17

Limitation – some clarity at last

Geneviève Rich 29

Data protection – too much data, not enough protection?

Tim Smith 21

Construction sub-contractors: ‘Play by the rules!’

Michael Salau 23

Compensation Act and desirable activities

Brian Goodwin 24

Liability issues for property insurers

Warren King 26

Migrant workers – breaking down barriers, reducing risk

Michael Parr 28

The new value of catastrophic injury claims

Andrew Kerr 30

BLM reports – Catastrophic Injury Forum32

Rome II: producing certainty?

Jim Sherwood 33

BLM reports – EU developments35

BLM briefing – CSR37

Editorial board

Catherine Hawkins(guest editor), Val Jones, Jenny Moates, Jim Sherwood, Andrew Relton, Alistair Kinley, Helen Cafferata, Linda Coppell, Kathy Széputi

Editorial

One of today’s big issues is the extent of personal responsibility for one’sactions and the question of whether the state should intervene and tellus how to act. Once the popular media got round to criticising the‘compensation culture’, it was not surprising that legislation would not befar behind in the form of the Compensation Act with its supposed ‘desirableactivity’ defence since the government always thinks legislation is the answer,without giving much thought to the question of whether it will work or justgive the impression that something has been done about the problem.

Perhaps the real problem is the cost of dealing with claims and the tension between the objective of cost-saving on the one hand and on the other theindustry putting up a fight for a common sense approach about the extent towhich insurers should have to indemnify individuals whose sufferings mightbe seen by many of us as simple bad luck or at least the sort of hardship forwhich others should not be liable.

In this edition, Brian Goodwin looks at the subject of the Compensation Act and it might be said that there is an invisible thread through many of theissues in terms of what the law’s reaction should be to undesirable situations;how far should landlords be liable to tenants in respect of defects when thereis no express provision in the lease; in what circumstances should peoplewho cause accidents or even death be criminalised (see Rodney Wilson’sarticle on corporate manslaughter); should fear of mesothelioma give rise toa claim (Matthew Harrington’s and Val Jones’s articles).

In addition to that, we have articles on costs, catastrophic injury and theimportant developments concerning access to justice and the management of claims, of great importance to insurers, covered in Alistair Kinley’s article,since this brings us back to the issue of insurers’ opportunity to insist on acommon sense view of liability in the framework of an efficient system forresponding to claimants.

Finally, we include our usual diet of construction, fraud, risk management (this time issues we face in relation to migrant workers) plus a trip to Europeto look at the new ‘Choice of Law’ regime.

Catherine Hawkins

Partner, BLM London

In terms of disease claims there appears to be no long or short term cure in sight and no sooner arecases decided upon than legal mutations occur. The following three articles highlight various complexlevels and stages of specific cases associated with disease and why it is crucial to be fully informed.

Pleural plaquesand beyond

The recent House of Lords decision in Johnston (HL 17.10.2007) confirmed that pleural plaques were not actionable. Pleural plaques are only evidence of asbestos exposure and do not in themselves progress to another condition.

Per LJ Longmore in the Court of Appeal:

The fact that negligence has produced physiologicalchange that is neither visible nor symptomatic and inwhich no way impairs the bodily functions should notattract legal liability.

The HL found that pleural plaques are not a significantinjury or de minimis and rejected the ‘aggregationtheory’, that is, that physiological change which is notcompensatable, aggregated with risk and anxiety (neitherof which give rise to a cause of action) could combine tocreate a cause of action.

Although resolving one major area of dispute in asbestoslitigation, the judgment above on pleural plaques didhighlight the position with regards to other asymptomaticor arguably de minimis asbestos-related conditions. InJohnston, the Law Lords declined to comment in detail onother asymptomatic conditions caused by asbestosexposure, such as asymptomatic asbestosis andasymptomatic pleural thickening.

The HL left open another potential avenue tobring a claim for pleural plaques: that an employerwould owe a duty in contract to its employee not toexpose them to injurious asbestos. Since arguably theseclaims are not claims for personal injury following theJohnstondecision, there would be a strict six year limitationperiod, which would prove fatal to most of the claims.Even if the claimants were able to bring the claims theremay be no insurance cover and damages may be verylimited. In seven test cases in the Newcastle County Court permission has, however, been given to amend Particularsof Claim to include breach of contract.

A further important element of the reasoning inJohnstonwas that the pleural plaques would very rarely(apart from in approximately 1% of cases) result inany symptoms.

That can be distinguished from other conditions of pleuralthickening and asbestosis which are progressive. Pleuralthickening tends to reduce lung capacity. Diffuse pleural thickening is widespread uniform fibrosis (scarring) ofthe pleura and tends to cause disability and may causebreathlessness on exertion as well as reduced lungcapacity. Asbestosis is fibrosis of the lung caused byasbestos exposure.

These conditions may result only in a reduction in reservelung capacity. Reduced lung capacity does not necessarilymean that there is a current disability or symptoms. However, it may mean that there is a potential for futuredisability or reduced lung capacity.

The details above raise a number of questions. Whatwill the court regard as minimal symptoms? Would theclaimant be able to recover if he has no current symptomsand only a risk of future symptoms? Would the claimant beable to recover if the claimant has reduced lung capacitybut no symptoms?

In terms of political intervention, a draft bill to reversethe HL decision is being put to the Scottish Parliament.Westminster had said that it did not intend to legislate andwould reserve its position depending on the draftproposals in the Scottish Parliament. However, GordonBrown has now indicated that the government is seekinga deal with insurers to pay up to £5,000 to victims ofpleural plaques. A consultation document is due to bepublished shortly. There have been a number of decisionsin the lower courts in the past year which have decided

some of the issues.

The courts have previously found that it is not necessaryfor a claimant to perceive an injury in order for it to besignificant. In Johnstonthe CA cited with approval the caseof Cartledge v Jopling (CA 1963). They considered the issueas to when an injury passes from becoming sufficientlyserious to found a cause of action. In Cartledge it was found that damage occurs at the point when the accumulatedscarring is sufficient to diminish appreciably the elasticityof the lungs and deprive them of much of their reservecapacity. In this case there were no symptoms at that stage.This may suggest that loss of reserve capacity alone may berecoverable.

In Owen v Esso Exploration & Production UK Ltd and Hopol Ltd(Liverpool County Court 16.11.2006) the claimant suffered frompleural thickening and asymptomatic asbestosis. Theclaimant had no functional impairment; there was only a riskthat claimant may develop a symptomatic condition. In thatcase the court found that the claimant could not recoverdamages. The threshold for actionability had not beenpassed. It was significant that there was no evidence beforethe court on loss of residual lung capacity. However, JudgeStewart inOwen makes a distinction between the chanceprogression of symptoms (such as asymptomatic pleuralthickening) and an asymptomatic condition which is merelypreparatory to the causation of symptoms, which iscompensatable (such as a virus).

In Hirst v William Proctor and Sons Ltd and Proctor RoofingServices Ltd (Sheffield County Court 27.4.2007) the claimantsuffered from asbestosis. The argument advanced by thedefendant that the claimant would not require his full lungcapacity was rejected by the court. The claimant was ableto recover damages where there was only 1% disability dueto asbestosis and due to loss of residual lung capacity.The court did not state whether it would have madean award if there was asymptomatic asbestosis.

In Cox v Swan Hunter (Newcastle CC 15.11.2007) the claimant suffered from asbestosis and an asbestos-related disabilityof at least 5% but that was held not to be minimal. It appears that asbestosis with very minor symptomsis recoverable.

It is significant that even where lung function tests arewithin the ‘normal’ range and there could still be areduction in actual lung capacity. These tests aresubjective. A practitioner should obtain medical evidenceon loss of reserve capacity.Following these cases, it is not clear what will be regardedas minimal injury. The position is even less clear in relation to loss of residual lung capacity on its own without anyother symptoms. The basis for actionability appears to reston the effect on respiratory reserve and current symptomsand potential for progression of those symptoms.

It appears that claims for pleural thickening may onlybe recoverable with symptoms and it is apparent thatasbestosis is recoverable with demonstrated loss oflung function even with minimal symptoms.

Of course, Cox, Hirst and Owen are all first instancedecisions and should be treated with caution. The positionmay become clearer over the course of the next yearpending test litigation in the Newcastle County Court. TheNewcastle test litigation relates to cases which lie betweenasymptomatic conditions and 5% disability. There are 33 scheduled cases included in the Newcastle test cases. Atthe moment the pleadings are limited. No lead cases have been selected as yet. The cases were listed before JudgeWalton for a case management conference on 28.02.08.

The cases have been set down for trial in September/October 2008. In the interim, legal developments maybe overtaken by political intervention. Clarity from thecourts and from the government would be welcomeon these issues.

John Mackenzie

Solicitor, BLM Manchester

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D i s c l o s u r e • April 2008

Liability for psychiatricloss: a patchwork quilt?

Those of us who practice in personal injury law have been blessed with the wisdom of the Houseof Lords (HL) in its consideration of some basic principles of compensation in the combinedappeals of Johnston, Rothwell & others [2007] UKHL 39 – otherwise known as the ‘pleural plaques’test litigation – in which a comprehensive judgment was handed down on 17 October 2007.

Practitioners and students alike will no doubt make muchuse of the narrative on the history and development of thecommon law as to what amounts to an actionable injury –acknowledged as the main thrust of that judgment.

There is, however, an equally interesting issue that arose inthe case of one of the appellants, Mr Grieves (Grieves v F TEverard & Sons and Others), in the context of liability forpsychiatric loss. It is worth repeating the facts upon whichMr Grieves claimed he should have recovered damages.

Mr Grieves sued two defendants who employed himconsecutively between 1961 and 1969. Both employersadmitted that they negligently exposed him to asbestos dust. He went onto develop a psychiatric illness as a resultof an x-ray examination in 2000, over 30 years later andlong after he was employed by either defendant. Thosex-rays showed that he had developed pleural plaques,which, as we know, their Lordships concluded was not anactionable injury for which he could claim compensation.

Liability for psychiatric injury and nervous shock hasoccupied the appellate courts for well over a century andthe many judgments are noted for the control measuresand exceptions to the general principle of recovery forinjury. Since Bourhill v Young [1943] AC 92, when anunsuccessful claimant merely heard a collision andwitnessed its aftermath, the law has gone onto recognize that psychiatric injury should be compensated where that injury is foreseeable, though it has seen the need to limitthe category of victim able to claim. It does so for policyreasons, treating claims for physical and psychiatric injurydifferently because:

1 Whereas claims for the former are directly connected to

the wrongdoer’s act, those who suffer psychiatric injury

may be removed in time and place from it.

2 Psychiatric injury can be difficult to diagnose.

So, for a claimant to recover, he should not only bringhimself within the category of those entitled to sue, whetheras a primary or secondary victim, but also demonstrate thathe has a recognised psychiatric condition.

Mr Grieves thought he was doing just that, relying inparticular on their Lordships’ earlier judgment in Page vSmith [1996] AC 155. Mr Page was a teacher who sufferedfrom chronic fatigue syndrome for many years. He suffereda road traffic accident as a result of which he did not sufferany physical injury at all, but went onto suffer anexacerbation of his chronic fatigue syndrome whichresulted in his condition becoming permanent. The HL,by a majority of three to two, held that in the case of aprimary victim as Mr Page clearly was, the relevant test iswhether the defendant could reasonably foresee that hisconduct would expose the claimant to a risk of personalinjury, whether physical or psychiatric; if so, the duty of care exists even if the claimant does not go onto to sufferfrom any physical injury.

Mr Grieves contended that he was a primary victim withinthe meaning of Page as he was at risk of physical injuryfollowing the defendant’s negligent exposure of him to asbestos fibres and that he should be compensated for hisdepressive condition even though his employers could nothave foreseen that he would go on to suffer with this someyears later.

Page has attracted much criticism by some academicwriters and practitioners in its application (eg Lord Goff inFrost v CC South Yorkshire Police [1999] 2 AC 455) and many saw this as an opportunity for the HL to overrule theirearlier decision. Indeed, Mr Donachie, a policeman,recovered damages from the Chief Constable of GreaterManchester ([2004] EWCA Civ 405) for the extreme stresshe suffered in having to re-visit a suspect’s car nine times inhis attempt to attach a defective tracker device; it wasaccepted that his stress reaction led to hypertension andthen to a stroke. Mr Donachie claimed he was a primaryvictim within the meaning of Page, as he was in danger ofphysical harm if he had been discovered by the criminals, thus circumventing the control mechanisms put in placeby Lady Justice Hale in Barber (one of the appeals inSutherland [2002] EWCA Civ 76).

In Mr Grieves’s case, emphasis was placed on the time atwhich the claimant was exposed to a risk of injury, that is inthe 1960s, compared with the point at which he thensuffered a psychiatric injury, in 2000, after he had a x-ray.As Lord Hoffman pointed out, the question in Mr Grieves’scase is a different one, not whether he suffered damage,but whether the defendants owed him a duty of care inrespect of psychiatric illness caused by his anxiety at therisk of a future illness. It was the creation of a risk of anasbestos-related disease that caused the mental illness ofwhich Mr Grieves suffered, and it is already accepted dicta by the HL that there cannot be compensation for thecreation of a risk. (See Gregg v Scott HL.)

So, rather than overrule Page, as invited to by thedefendants, Lord Hoffman has attempted to kick it into thelong grass by declaring that the HL in Page must have onlymeant it to be:

Confined to the kind of situation which the majorityhad in mind … a foreseeable event (a collision) which,viewed in prospect, was such as might cause physicalinjury or psychiatric injury or both … In the presentcase, the foreseeable event was that the claimant wouldcontract an asbestos-related disease. If that eventoccurred, it could no doubt cause psychiatric as wellas physical injury. But the event has not occurred. Thepsychiatric illness has been caused by apprehensionthat the event may occur … I think it would be anunwarranted extension of the principle in Page v Smith to apply it to psychiatric illness caused by apprehensionof the possibility of an unfavourable event which hadnot actually happened.

The reader might be forgiven for thinking that LordHoffman has a long memory and was perhaps alsomotivated by the majority decision overturning the Courtof Appeal (CA) in Page at that time!

Lord Hope of Craighead agreed on the basis that the causal chain between inhalation of asbestos dust and thepsychiatric injury stretched far beyond that which wasenvisaged in Page, and that Mr Grieves’s reaction almost30 years later was not the kind of injury that wasreasonably foreseeable. As Lord Hope put it:

The category of primary victims should be confined topersons who suffer psychiatric injury caused by fear,or distress resulting from involvement in an accidentcaused by the defendant’s negligence, or its immediateaftermath. A person like Mr Grieves who sufferedpsychiatric injury because of something which he mayexperience in the future as a result of the defendant’spast negligence is an entirely different category. Theimmediacy which is characteristic of the situation thatapplies to primary victims as contemplated in Pagev Smith … is lacking in his case.

And so their Lordships did everything but overrule Page,preferring to distinguish it in Mr Grieve’s case, andconfining it to a special category of limited cases in whichthe tort which results in subsequent psychiatric injuryoccurs proximately.

It is to be hoped that Lord Hoffman’s optimism that Page‘does not appear to have caused any practical difficulties’and limiting its scope in terms of proximity to the tort iswarranted. It will certainly be useful in stress litigation. Toput it another way, no doubt Mr Donachie will considerhimself fortunate to have recovered compensation at thehands of the CA in 2004 as there must be some doubt thathe would now do so.

The patchwork quilt grows ever larger and more intricate.