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Allens Arthur Robinson

July 2006

In brief: In this edition of Recall, we look at proportionate liability in UK mesothelioma cases, negligence claims and asbestos, and a High Court decision overruled by new Civil Liability Act amendments in New South Wales.

Proportionate liability in UK mesothelioma claims and implications for Australia

In brief: A landmark UK House of Lords decision has established an exception to the general rule of joint and several liability for defendants in mesothelioma claims. Special Counsel Nicola Nygh(view CV) and Law Graduate Rachel Darvey report on the House of Lords decision and its likely impact on the decisions of the Australian Courts. 

The House of Lords decision

On 3 May 2006, the House of Lords, in the decision of Barker v Corus [2006] UKHL 20, held that where a claimant has contracted mesothelioma after being wrongfully exposed to asbestos dust at different times by different entities, each defendant's liability is proportionate to the probability that that defendant caused the harm. This decision follows from the House of Lords' earlier decision in Fairchild v Glenhaven Funeral Services Ltd [2003] 1 AC 32 that a claimant who developed mesothelioma could sue any of the entities that had wrongfully exposed him or her to asbestos dust, even though on the current state of scientific knowledge, the claimant could not prove which exposure had caused the disease.  

The Fairchild exception

The decisions in Fairchild and Barker proceeded on the basis that mesothelioma is an indivisible injury. That is, that mesothelioma is likely to have been caused by a single exposure to asbestos rather than by the cumulative effect of multiple exposures. In these circumstances, the claimant will often not be able to prove on the balance of probabilities which exposure caused the condition. The most that the claimant may be able to prove is that each exposure increased the risk of the claimant contracting mesothelioma, and that that risk eventuated. 

Thus, Fairchild established an exception to the usual rule that a claimant must prove on the balance of probabilities, that each defendant's conduct caused the damage the claimant suffered, in the sense that the damage would not have happened had the defendant's wrongful conduct not occurred. As a result, a claimant in the UK who falls within the Fairchild exception can choose to bring their claim against solvent defendants notwithstanding that the mesothelioma may have been caused by a claimant's single exposure to asbestos-related dust by one party only, that may or may not, be a party to the proceedings. 

The Barker decision

In Barker, the House of Lords considered the scope of the Fairchild exception and resolved the question of whether an individual defendant could be liable for all the damage suffered by the claimant (or claimant's estate) or whether, in the alternative, the defendant is only liable for its own contribution to the materialised risk of the claimant contracting mesothelioma.

The House of Lords in Barker determined that there is a narrow exception to the usual rule of joint and several liability under the Fairchild principle in mesothelioma cases, whereby:

  • each defendant is only liable for its contribution to the total risk of the claimant contracting mesothelioma in circumstances where that risk materialised; and
  • a defendant is not liable for the risks created by material exposure to asbestos by other defendants, the claimant (in Barker there was a period of asbestos exposure when Mr Barker was self employed) or persons not before the court (such as a now insolvent company).

The House of Lords recognised that, under the Fairchild principle, the rules of causation are relaxed and held that in those circumstances it was appropriate to impose proportionate liability only, so as to 'smooth the roughness of the justice which a rule of joint and several liability creates.' Lord Rodger of Earlsferry delivered a strong dissenting judgment criticising the creation of a narrow enclave within which special rules for causation and apportionment apply.

Apportionment of liability

In Barker, the House of Lords remitted the three cases before it to the lower courts to determine the proportion of each defendant's individual liability for the risk which materialised. However, the House of Lords suggested that the following factors may be relevant in apportioning liability.

  • The time of the claimant's exposure by each defendant to the asbestos-related products.
  • The intensity of each period of material exposure.
  • Whether the same asbestos agent was present in each period of material exposure or whether the types of asbestos that the claimant was exposed to differed.
  • The proportion of the risk of each of the defendant's conduct as a percentage of the total damage.
Effect of the decision

In the UK, defendants in mesothelioma cases are no longer jointly and severally liable. This change will be welcomed by defendant insurers who should now be better able to determine the likely amount of their contribution arising from a mesothelioma claim from the outset and will not be required to effectively indemnify insolvent defendants (and insurers).

It appears that this exception to joint and several liability will be applied narrowly. It only applies where the claimant has in fact contracted the disease against which he should have been protected. A mere risk of contracting mesothelioma is not sufficient to found a cause of action. Further, it seems that the same causative agent must have caused the damage to the claimant in order for liability to be several, limiting the number of product liability cases that may benefit from the decision. To take the example given by Lord Hoffmann, where a claimant suffers from lung cancer, and the cause may have been asbestos exposure or may have also been smoking, and it cannot be proved which is more likely to have been the case, liability will still be joint and several.

The Australian position

Neither the decision in Fairchild nor that in Barker represent the current law in Australia. The High Court has held that a common sense approach should be taken to causation and that the 'but for' test is not a comprehensive and exclusive criterion for determining causation.1 However, the facts before the House of Lords in Fairchild and Barker have not been squarely considered by the High Court.

Similar facts have been considered by the New South Wales Court of Appeal. In Bendix Mintex Pty Limited v Barnes (1997) 42 NSWLR 307, the plaintiff failed to establish liability for the condition of mesothelioma where he was exposed to asbestos from more than one source. The plaintiff could establish that each exposure materially increased the risk of his developing mesothelioma but he could not establish which exposure actually caused the disease.2

More recently, the issue has been considered by a single judge of the Supreme Court of Western Australia in Misiani v Welshpool Engineering Pty Ltd [2003] WASC 263. In that case Justice Barker held that the test for causation enunciated by the House of Lords in Fairchild does not apply in Australia. However, he then seemed to apply a test which is not dissimilar to that applied in Fairchild to find that the deceased's exposure to asbestos during both periods of employment caused or materially contributed to his mesothelioma. This decision appears to be inconsistent with the line of authority in the New South Wales Court of Appeal, which follows the decision in Bendix.3

Effect of recent state legislation in Australia

It is worth considering how recent state legislation in relation to tort law and the policy considerations behind that legislation may affect the development of the law in relation to this issue in Australia. In particular, Australian courts may be reluctant to adopt the approach taken in Barker given that state legislatures have deliberately not extended the new proportionate liability regimes to personal injury claims.4 The area of asbestos claims is one where the state legislatures have proved more than ready to intervene where they do not agree with the way the law has been developed by the courts. It remains to be seen how Australian courts and the state legislatures will respond to the House of Lords decision in Barker.

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Negligence claims and asbestos: pleural plaques and attendant anxiety not actionable as injury

In brief: In Grieves & Ors v FT Everard & Sons & British Uralite PLC & Ors, the UK Court of Appeal determined that a benign condition resulting from exposure to asbestos and anxiety related to diagnosis could not be aggregated to found an action in negligence. The observations of the court have wider implications for the product liability field. Partner Maryjane Crabtree(view CV) and Lawyer Claire Forster report on the decision and consider the position in Australia.

Introduction

In Grieves & Ors v FT Everard & Sons & British Uralite PLC & Ors [2006] All ER (D) 187 (Jan), the UK Court of Appeal held that former employees of the defendants who had been exposed to asbestos and developed pleural plaques (a largely benign condition) were not entitled to compensation. The court accepted that pleural plaques are merely indicators of asbestos exposure, and do not predispose a person to more serious illness.

Each of the claimants' future risk of developing more serious asbestos-related disease had been assessed by medical practitioners as being between 1 per cent and 5 per cent and most were between 1 per cent and 2 per cent.

The decision of the trial judge

At first instance, Justice Holland held that the presence of pleural plaques in conjunction with the attendant anxiety upon being diagnosed with an asbestos-related condition and the risk of future, more serious, injury was sufficient to establish injury and compensable damage. In all cases, except for Mr Grieves, the claimants relied on the pressure of significant anxiety (in conjunction with pleural plaques) to establish injury and damage. Mr Grieves established a depressive illness resulting from attendant anxiety and the risk of developing more serious illness in the future.

Justice Holland held that the relevant injury was not the pleural plaques, but rather the permanent penetration of the chest by asbestos fibres. That injury, manifested in pleural plaques, was sufficient to establish an action in negligence when anxiety resulting from the risk of more serious illness was also present. His Honour held that the 'injury' could not be regarded as 'minimal'.

The appeal

Negligence is not actionable per se, but actionable upon proof of damage, ie that damage must be more than minimal. In this context, Lord Justices Longmore and Phillips considered the three heads of damage separately in their majority decision.

  1. 'Pleural plaques': it was common ground between the parties that the physical damage from pleural plaques was minimal.
  2. 'Risk of future disease': where an injury is incurred as a result of negligence and there is a risk that the claimant will suffer further injury in the future, increased damages will be awarded to compensate for further decline. However, no claim for risk of future damage may be made in the absence of physical injury. In this case, pleural plaques per se were held not to be an injury.
  3. 'Anxiety': as a matter of policy, the English courts have never entertained a claim for fear of a future illness, incapacity or death in the absence of physical injury.

The majority held that each head of claim considered individually was not sufficient to ground a claim in negligence. Furthermore, the majority observed that there existed no legal principle for aggregating separate heads of claim to establish a cause of action in circumstances where no individual head of damage was sufficient to ground a claim in negligence on its own.

Accordingly, the majority rejected Justice Holland's finding that the continued presence of asbestos fibres in the claimants' bodies, together with the attendant anxiety, and risk of future disease founded a cause of action.

In relation to the depressive illness suffered by Mr Grieves – his anxiety at being exposed to future asbestos-related disease – the court held that his illness was not a reasonably foreseeable consequence of his exposure to asbestos. Accordingly, Mr Grieves was not entitled to compensation for that illness.

Australian position

A number of Australian decisions are consistent with the UK Court of Appeal's decision that a condition which causes no physical discomfort or disability, and has only the potential for more serious development is insufficient to found a claim in negligence.5 The High Court has also held that a plaintiff cannot recover compensation for likely or potential damage.6

Analysis

The decision in Grieves confirms that a claimant must demonstrate that he or she has suffered a physical injury in order to claim damages in negligence. In the absence of physical injury, a claimant cannot rely on a condition brought on by anxiety caused by the fear of suffering physical injury to establish a claim in negligence. This is consistent with the position in Australia.

This decision provides some certainty that the class of potential claimants in respect of asbestos exposure will not be substantially increased to include claimants who have developed benign conditions and fear that they will develop more serious asbestos-related disease in the future.

This decision has wider implications in the product liability field. It suggests that manufacturers and distributors of products will not be liable in negligence to claimants who develop anxiety-related conditions, but suffer no physical harm as a result of exposure to harmful products.

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High Court decision overruled by new Civil Liability Act amendments in NSW

In brief: Amendments to the Civil Liability Act in NSW overrule the High Court decision in CSR Limited v Eddy [2005] HCA 64. In Victoria, dust and tobacco-related diseases have been excluded from provisions limiting the amount of damages which may be claimed in personal injury actions. Special Counsel Nicola Nygh(view CV) reports.

Background

The Civil Liability Amendment Act 2006 (NSW) (the Act), passed on 8 June 2006, amends the Civil Liability Act 2002 No 22 (NSW). The Act came into force on 20 June 2006. The Act overrules the High Court's recent decision in CSR Limited v Eddy [2005] HCA 64 (21 October 2005) to provide that certain personal injury claimants may recover damages for loss of ability to provide gratuitous domestic services to dependants. The provisions apply to claims arising from, among other things, motor accident, dust-related conditions and smoking and tobacco products.

In addition, the Act places a cap on the hourly rate for calculating the amount of damages payable for gratuitous care provided to a claimant in regard to a dust-related condition under the principle in Griffiths v Kerkemeyer (1977) 139 CLR 161.

In Victoria the Wrongs (Part VB) (Dust and Tobacco-Related Claims) Regulations 2006 (Vic) have been made under the Wrongs Act 1958 (Vic). The Regulations exclude damages awarded for 'dust and tobacco-related diseases' from Part VB (Personal Injury Damage) of the Act which limits the damages which may be claimed in personal injury actions. The Regulations commenced on 9 May 2006.

Footnotes
  1. E M March v E & M H Stramare Pty Ltd (1991) 171 CLR 506 per Chief Justice Mason at 514 and 516. 
  2. See also similar decisions by the NSW Court of Appeal in ICI Australia Operations Pty Ltd v Walsh (1997) 15 NSWCCR 279 and Wallaby Gruip (BAE) Pty Ltd v Macleay Area Health Service (1998) 17 NSWCCR 355 but compare Jsekarb v Plane (1998) 17 NSWCCR 434.
  3. Authorities referred to in footnote 2.
  4. See section 34(1() Civili Liability Act 2002 (NSW) and analogous provisions in other states.
  5. See Martindale v Burrows and Waller [1997] Qd R 243; Battaglia v James Hardy (sic) and Co Pty Ltd (unreported, Justice Vincent, Supreme Court of Victoria, 12 March 1987); Papadopoulos v James Hardy and Co Pty Ltd (unreported, Justice Kaye, Supreme Court of Victoria, 12 February 1988).
  6.  Wardley Australia v State of Western Australia (1992) 175 CLR 514. 

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