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Focus: Product Liability – November 2007

House of Lords: No aggregation of heads of damage permitted

In brief: In July 2006, we reported on the UK Court of Appeal's decision in Grieves v FT Everard & Sons. On 17 October 2007, the House of Lords upheld that decision, affirming that a claimant cannot 'aggregate' heads of damage to establish a cause of action in negligence where those heads are, of themselves, insufficient to establish the claim.1 With this holding, the position in the UK now reflects that in Australia. Partner Annette Hughes (view CV), Senior Associate Claire Forster and Law Graduate Jenny Kaldor discuss the decision and its implications.

How does it affect you?

  • This decision confirms that manufacturers and distributors of products will not be liable, in the UK, under a negligence claim brought by claimants who suffer anxiety but no physical harm as a result of exposure to harmful or potentially harmful products. The decision, which is consistent with the position in Australia, gives further certainty to this area of the law.
Background

In Grieves and Ors v FT Everard & Sons & British Uralite PLC & Ors,2 the UK Court of Appeal held that former employees of the defendants, who had developed pleural plaques as a result of their exposure to asbestos while in the defendants' employment, were not entitled to compensation. The court accepted that pleural plaques (a condition which, except in the most exceptional cases, is asymptomatic) are merely indicators of asbestos exposure and do not necessarily predispose a person to a more serious asbestos-related disease. 

Prior to that decision, pleural plaques were actionable in the UK, not on their own, but on the basis of 'aggregation', that is, when they are aggregated with the risk that the pleural plaques might develop into further asbestos-related conditions and with the anxiety produced by that risk. A number of insurers had brought the Grieves case to challenge the aggregation theory. The case was heard at first instance by his Honour Justice Holland, who held that the pleural plaques were actionable on the basis of the 'aggregation' principle.

On appeal by the insurers, the UK Court of Appeal considered the following three heads of damage:

  • the pleural plaques;
  • the risk of future disease or injury arising from the pleural plaques; and
  • anxiety arising out of the prospect of future injury or disease.

The court upheld the insurers' appeal, concluding that none of these types of damages was, of itself, actionable. This decision was based on the legal rule that, unlike some other causes of action, negligence is actionable only on proof of damage and that damage must be more than minimal. Pleural plaques were held not to be an actionable injury as they are merely indicators of asbestos exposure and do not predispose a person to a more serious disease. The court held that the three heads of damage could not be aggregated to form the basis for a claim in negligence. The claimants then appealed the decision to the House of Lords.

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House of Lords' decision

On 17 October 2007, the House of Lords unanimously dismissed the appeal, firmly endorsing the Court of Appeal's decision. The House of Lords emphasised that the risk of future disease in relation to an asymptomatic condition is not actionable, 'and neither is a psychiatric illness caused by contemplation of that risk' (Lord Hoffmann). Put in a more colourful way, 'nought plus nought plus nought equals nought' (Lord Scott of Foscote).

The House of Lords departed from the Court of Appeal in rejecting the policy considerations of the earlier decision. While the Court of Appeal took into account the undesirability, on policy grounds, of 'opening the door' to pleural plaques claims, the House of Lords preferred to rely on a more strict legal analysis of the claim in negligence.

The House of Lords did note that the claimants may have an action in breach of contract on the basis that the employers owed their employees a contractual duty of care, which was breached when the employees were exposed to asbestos dust in the course of their employment. Proof of damage is not required to establish a breach of contract at law and the measurement of damages is calculated differently from damages for negligence. The House of Lords was not asked to determine this issue and, accordingly, simply noted that an action in breach of contract may be brought (subject to the statute of limitations) and that there may be room for development of the common law in this area.

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The Australian position

A number of Australian decisions are consistent with the principle upheld by the House of Lords. In Wardley Australia v State of Western Australia,3 for instance, it was held that 'vulnerability to injury or the potential for harm does not in itself amount to an injury'. Similarly, in Martindale v Burrows and Waller,4 the court noted that where there was a failure to demonstrate actual harm, the mere fact that there was potential for harm will not constitute actionable damage.

The House of Lords have provided further certainty to this area of the law, confirming that manufacturers and distributors of products will not be liable in negligence to a class of claimants suffering no physical harm as a result of exposure to a harmful or potentially harmful product.

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Footnotes
  1. Johnston v NEI International Combustion Ltd [2007] UKHL 39.
  2. [2006] 4 All ER 1161.
  3. (1992) 175 CLR 514.
  4. ([1997] 1 QD R 243.

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