A busy few weeks in the Court of Appeal 

There are three upcoming hearings in the Court of Appeal which will be of interest of those who follow this blog. Here is a reminder of what each case is about and the dates on which they are due to be heard, according to the Civil Appeals Case Tracker. 

We will blog about each decision once handed down. 

Sivaji v Ministry of Defence

CA hearing date: 15 or 16 June 2021 

First instance judgment

A fatal mesothelioma claim brought on behalf of the deceased and his dependants. The Deceased’s alleged exposure to asbestos took place in the Sembawang naval dockyard in Singapore between 1953 and 1968. The case gave rise to various issues including whether the applicable law was the law of England or the law of Singapore and whether the action was time-barred. 

The issue before HHJ Allan Gore QC (sitting as a High Court Judge) at first instance was whether the Claimant should have permission to amend the Claim Form and Particulars of Claim. On the MOD’s case, these amendments were outside the limitation period under Singaporean law and the effect of giving permission for the amendments would be to deny the MOD the benefit of that limitation defence, at least in respect of the dependency claim, due to the doctrine of relation back, The Judge granted permission for the amendments. 

Rix v Paramount Shopfitting Company Limited 

CA hearing date: 23 or 24 June 2021 

First instance judgment

Mr Justice Cavanagh’s decision concerned the scope of the Fatal Accidents Act 1976. The Deceased was a successful businessman whose business had continued to thrive after his death from mesothelioma. The Judge held that notwithstanding the ongoing success of the business, his widow had a substantial financial dependency claim. 

John-Paul Swoboda and Cressida Mawdesley-Thomas previously blogged about the first instance decision here and Rachit Buch spoke about the case at 12KBW’s Asbestos Webinar Day 2020 which you can watch here. The permission hearing before Lord Justice Bean can be viewed here

Witham v Steve Hill Limited

CA hearing date: 6 or 7 July 2021 

First instance judgment

Another mesothelioma case concerning the scope of the Fatal Accidents Act. Anthony Metzer QC (sitting as a Deputy High Court Judge). As a result of the untimely death of the Deceased, his widow had been forced to give up work to look after her foster children. The Judge held that there was dependency claim, which he assessed on the basis of the cost of care to replace the services the Deceased would have provided but for his death. 

Steven Snowden QC and John-Paul Swoboda (who acted for the Claimant at trial) blogged about the case here. Kate Boakes spoke about the case at 12KBW’s Asbestos Webinar Day 2020 which you can watch here.

Sparkes v London Pension Funds Authority & Leigh Academies Trust [2021] EWHC 1265 (QB)

This post by Kate Boakes is about the recent decision of Mr Justice Murray by which he reversed Master Thornett’s dismissal of the Claimant’s non-party disclosure application in a mesothelioma claim arising out of alleged asbestos exposure in a school.

The Claimant was represented by Harry Steinberg QC and Aliyah Akram.

The claim

The facts are summarised at [6]-[10].

It was alleged that the Deceased was exposed to asbestos while working as a teacher between 1970 and 1975. It was said that asbestos was in the fabric of the school building and that the Deceased would “almost inevitably” have been exposed to asbestos during the construction of a new schoo l building in 1973.

The Defendant was the London Pension Funds Authority, which had inherited the relevant contingent liabilities. The Respondent to the disclosure application was the Leigh Academies Trust (“the Trust”) which, according to information obtained by the Claimant’s solicitors, had “boxes of old documents” relating to building and maintenance works at the school.

Disclosure requests

The background to the application is set out at [12]-[15]. The Claimant’s solicitors sought disclosure from the Trust and were provided with 46 pages of documents. They wrote to the Trust saying that they considered it likely that there were more relevant documents in the light of the information they had been given as to the quantity of documents the Trust held. They offered to attend the Trust’s site to inspect the documents. A representative of the Trust telephoned the Claimant’s solicitors and stated that it had provided all of the documents relevant to the 1970s. After consultation with counsel, the Claimant’s solicitors made a wider disclosure request for documents regarding building, maintenance, renovation, or demolition works at the School before and after the Deceased’s period of employment. There was no response to this request and a non-party disclosure application was filed pursuant to CPR 31.17.

Application hearing

The decision of Master Thornett is summarised at [16]-[26].

Master Thornett dismissed he application on the basis that it was too broad, vague, and unfocused. The Master held that it would impose a disproportionate and unfair burden on the Trust, particularly bearing in mind that it was a third party respondent. His overall conclusion was that:

“… this application is hopelessly vague and lacking in specificity. It is unworkable from a Respondent’s viewpoint and it is disproportionate to expect a third party to try to respond to it. … I cannot, sympathetic as I am to the principle as to how certain documentation could be relevant, today grant this application as it stands. Neither am I able to identify a shape or form of an order that could be intelligible.”

The appeal

The Claimant pursued four grounds of appeal which are set out at [33].

The Judge summarised the legal framework at [27]-[32] and the Claimant’s submissions at [34]-[44].

Murray J found for the Claimant on all four grounds. His reasons are at [45]-[53]:

“45. Acknowledging the broad discretion that the Master should be accorded in making a case management decision, I am nonetheless forced to the conclusion that he was wrong in his application of the test under CPR r 31.17(3) to the relevant facts, took into account irrelevant factors, gave insufficient weight to relevant factors, and failed to balance the relevant factors fairly in the scale. His decision was wrong, and therefore the Order had to be set aside.

[…]

51. For the reasons given by Mr Steinberg, documents regarding building, maintenance, renovation, or demolition works at the School, both before and after [the Deceased’s] period of employment, were potentially relevant, satisfying the “may well” test referred to in Three Rivers (No 4). Properly understood, the Disclosure Application did not seek to require the Trust to undertake a disproportionate, onerous, vague, or unfocused search. All the potentially relevant documents were in boxes at the School’s premises, and RWK was offering to pay copying costs or to attend and physically inspect the boxes themselves.

52. Moreover, it is clear that there was a reasonable possibility that in those boxes there would be documents that were decisive of the claim, one way or the other, and therefore that disclosure was necessary in order to dispose fairly of the claim and/or to save costs.

53. Because the Master appears to have misunderstood the scope of what was requested in the Disclosure Application, which in my view is clear from the statement supporting the Disclosure Application, he did not exercise his discretion on a proper basis and therefore made the wrong decision.”

Costs

Unusually, the Claimant was awarded the costs of making the application on the basis that the Trust had “not put forward any good reason why, from the end of October 2019 onwards it failed to engage with the appellant’s reasonable and several times repeated request for disclosure, which included reimbursing the Trust for its copying costs or attending to conduct a physical inspection, further minimising cost to the Trust.”

Comment

Applications of this sort are heard by Masters on the mesothelioma list day-in-day-out but it is rare for them to be considered in an appeal. This decision therefore provides a useful reminder of the legal framework and how those principles should be applied in practice.

In particular, it is a reminder of the threshold that is set by CPR r31.17(3), which is that documents “are likely to support the case…” if they “may well” do so as opposed to it being “more probable than not” that they will do so.

As per the Judge’s findings in this case, documents from an earlier period than the employment period may have showed asbestos being installed, or documents from a later period may have showed asbestos being removed. In either case, such documents “may well” have supported the Claimant’s case.

The decision also exemplifies the importance of giving a respondent to a non-party disclosure application adequate time to respond, or chasing for a response before issuing an application, and, where possible, of seeking to relieve the burden of compliance with the request by offering to pay for copying or even of attending to carry out the inspection. In this case, not only did the taking of these steps contribute to the success of the appeal, they also led to the Claimant recovering the costs of the application.

Re-assessment of damages in Head v Culver Heating Co Ltd: from nothing to £2.4M

This blog post was written by Samuel Cuthbert.

Harry Steinberg QC and Kate Boakes – instructed by Peter Williams of Fieldfisher LLP – acted for the Claimant in Deborah Head (Executrix of the Estate of Michael Head, Deceased) v The Culver Heating Company Limited [2021] EWHC 1235 (QB). Johnson J re-assessed the lost years claim, following the Claimant’s successful appeal in the Court of Appeal earlier this year.

The judgment can be read here. Our blog post on the Court of Appeal’s judgment can be read here.

Background

In January 2021, the Court of Appeal overturned the decision of HHJ Melissa Clarke by which she held that Mr Head, a successful businessman who founded and ran a company called EMSL, could not recover any loss of earnings in the lost years because the profitability of his business would likely continue after his death and so too any divided income from his shares. The Court of Appeal set aside that element of her decision and ordered that the case should be remitted for a re-assessment of the lost years claim.

The re-assessment of damages was heard by Johnson J. By a judgment handed down on 11 May 2021, the Judge assessed damages for the lost years claim in the sum of £2.44 million. Accounting for the other heads of loss that were assessed by HHJ Clarke, the total judgment sum was £2.62M.

The decision

Johnson J was required to assess the lost years claim in accordance with the guidance of Bean LJ in the Court of Appeal.

The gulf between the parties remained enormous: the Claimant contended for a figure of £3.7M and the Defendant contended for a figure of £238,000. This difference was attributable to four key issues which the Judge had to determine.

(1) What fell to be included in the lost years claim? Was it limited to salary and dividend income? Or did it extend to retained profits insofar as these were generated by Mr Head’s work?

At paragraph 33 of the Court of Appeal’s judgment, Lord Justice Bean held that “at the time of Mr Head’s death all the income which he and his wife received from the company (save for the small deduction in respect of Mrs Head’s work) was the product of his hard work and flair, not a return on a passive investment.

There was a dispute as to the meaning of this sentence. The Claimant argued that it was intended to mean that all of the income the Claimant was able to derive from EMSL, including those profits he chose to retain within the business, was recoverable as part of the lost years claim and there was no “investment income” element. The Defendant argued that the use of the word “received” meant that the recoverable element was limited to that which was actually extracted from the business and that the profits Mr Head retained within the business should be categorised “investment income” and offset against the loss.

Johnson J found for the Claimant on this point. He held that the effect of the Court of Appeal’s judgment was clear:

First, artificial distinctions should not be drawn between salary, dividends and undistributed profit. Bean LJ’s use of the term “loss of earnings” was not an exclusion of earning capacity that was reflected in the accumulation of funds otherwise than by payment of salary. Mr Head’s dividend income was not to be treated differently to his salary. Similarly, the term “dividend” was used in Bean LJ’s judgment to cover both dividend income and undistributed company profits. Mr Head’s earning capacity was not defined solely in terms of his salary or by reference to dividend payments, because he was the individual responsible for 90% of the profitability of the business. Had he been self-employed, his earning capacity would be assessed be reference to his net profit and the fact he chose to incorporate EMSL did not, as a matter of principle, make any difference to his level of earning capacity.

Second, Mr Head’s earning capacity, at the time he contracted mesothelioma, was best reflected by a combination of his salary and 90% of EMSL’s profits, less a deduction in respect of the work done by Mrs Head. This was an assessment made by HHJ Clarke at first instance and the Court of Appeal had not suggested that this element of her decision was in any way flawed.  

Third, once Mr Head no longer worked full-time, his earning capacity could properly be reduced pro rata.

(2) If Mr Head had not contracted mesothelioma, to what extent would he have worked less and/or handed over ownership of the company as he approached old age?

HHJ Clarke held that Mr Head would have worked at 80% rate from the age of 65 to 70 and at 50% rate thereafter. These findings were not disturbed on appeal. Johnson J held, following the guidance from Bean LJ, that Mr Head would have further reduced his input to 25% at the age of 75. Despite Mr Head’s evidence that he did not envisage ever fully giving up work, Johnson J found as a fact that he probably would have retired completely at the age of 80.

Johnson J accepted the evidence of Mr Head’s widow and son that he would not have drawn more money from EMSL than that which reflected the work he put in. He found that it was likely, as the years progressed, that Mr Head would have reallocated his shareholding to reflect his proportionately reduced involvement. This meant that there was no element of “investment income” to be taken into account – all of Mr Head’s income from EMSL would have been a reflection of his contribution to the business and was therefore earned income.

(3) Should the calculation of the lost years claim take into account rental income that Mr Head would have received from a property he had jointly owned with his widow?

This issue was not explored at the original trial and so there was no evidence on the point. It was possible that if the Defendant had relied on the rental income, then the Claimant may have sought to argue that a part of the rental income should be included in Mr Head’s earning capacity, thereby increasing the extent of the claim (e.g. if Mr Head had spent time and effort in the maintenance of the property). Johnson J held that it was not open to the Defendant to introduce an additional factor to the calculation of the lost years claim which had not been explored in the evidence.

(4) What deduction should be made for living expenses?

It was common ground that that Mr Head’s notional living expenses during the lost years should be deducted from his earning capacity, but not the extent of that deduction. There was a typing error in HHJ Clarke’s judgment which meant that the percentage deduction was too high. The Defendant contended that it was too late to change it. But Johnson J held that, rather than deducting a proportion of the income, it was appropriate to deduct the actual sum that reflected Mr Head’s living expenses. This was £3,584 per month. This deduction was to be made once overall – rather than year on year with any surplus crystalising as a loss – because the award was a single sum representing the whole of Mr Head’s earning capacity in the lost years less his total living expenses for the same period.

Consequential issues

Johnson J decided various consequential issues at a second hearing.

After determining some minor calculation issues, he assessed the lost years claim at £2.44 million. The overall judgment sum – including other heads of loss and interest – was £2.62 million.

There were two consequential issues which may be of wider interest.

  • What rate of interest should be applied, and in respect of which components of the award?

The effect of the judgment was that Mrs Head ought to have been awarded £2.44 million in May 2019, when HHJ Clarke handed down her judgment. The Claimant contended that interest should be awarded on that whole sum at a rate of 8% (by analogy with the judgment debt rate) or alternatively 4%. The Defendant argued that interest should only be awarded on the past loss element of the award, at half the special account rate.

Johnson J held that he should apply the conventional approach, as set out in Jefford v Gee [1970] 2 QB 130, of awarding interest at half the special account rate. That rate was held to apply to past losses only, i.e. that part of the lost years claim that related to the period before judgment in the re-assessment of damages.

(2) What, if any, orders should be made under CPR 36.17(4)?

The Claimant made a Part 36 offer on 13 November 2020, before the Court of Appeal hearing, of just under £2.25 million in respect of all heads of loss, which she subsequently bettered. The Claimant sought an order under CPR 36.17(4) which should be refused only where the court considers it “unjust” to make such orders. CPR 36.17(5) sets out a non-exhaustive list of matters to be considered.

Johnson J considered each of the factors at CPR 36.17(5)(a)-(e) and held that none of those factors suggested that it would be unjust to order Part 36 consequences. However, he declined to make the orders on the basis that the Claimant introduced new evidence between the Court of Appeal’s judgment and the re-assessment of damages hearing. That evidence comprised a witness statement from Mr Head’s widow, son, and personal assistant, which resulted in a finding that Mr Head would have reduced his shareholding in the business to reflect the gradual reduction in his involvement. This benefitted the Claimant as it meant that the value of the claim was assessed on the basis that Mr Head would not have received income from the business beyond that which derived from his contribution. The Judge found that the earlier evidence before the court would not, in itself, have resulted in that finding, and therefore it would have been natural for the Defendant to question whether the offer was supported by the evidence as it stood at the time.

Comment

The decision on the lost years claim is bound up in the findings of fact. Johnson J, having considered the evidence in the light of the decision in Adsett v West, held that Mr Head’s income would have reflected his work and was not investment income. But the judgment serves as a useful worked example of how to quantify a lost years claim for a successful businessperson who is still working at the time of contracting a fatal illness.

In his judgment in the Court of Appeal, Bean LJ stated at [6]: “I consider that it was indeed necessary to reopen the determination of this appeal in order to avoid real injustice”. Before HHJ Melissa Clarke, the Claimant was awarded damages of c.£175,000 and nothing in respect of the lost years. The re-assessed damages now stand at £2.62 million. This serves to quantify the extent to which a real injustice has been avoided.

The Part 36 decision is also of interest. It could be argued that the Defendant was fortunate to escape the consequences set out in CPR 36.17(4). The determinative factor identified by the Judge appears to be one of the vagaries of litigation, where the Claimant produced supplementary evidence in response to the guidance from the Court of Appeal.

Scarborough College Ltd v Winter [2021] 4 WLUK 352- The Show Cause Test under Scrutiny

This post was written by Helen Waller.

An independent boarding school recently appealed a judgment on liability made against it under the ‘show cause’ procedure set out in CPR PD 3D. The claim was one made by a former pupil who had contracted mesothelioma as a consequence of his exposure to asbestos at the school. The mesothelioma led to the former pupil’s death in December 2020, a month after the show cause hearing. His widow continued the claim.

CPR PD 3D, paragraph 6.1 sets out the defendant’s obligations in the show cause procedure. A defendant is to “identify the evidence and legal arguments that give the defendant a real prospect of success on any or all issues of liability.” Following Silcock v H M Revenue and Customs [2009] EWHC 3025 (QB), that obligation only kicks in once the claimant has adduced credible evidence in support of his case.

The Background

The Claimant/Respondent had been a boarder at the school from 1969 to 1973, housed in a Victorian building. He said that 6 days a week he and other pupils dried their sports kit on asbestos-lagged pipes in the basement boiler room. His case was that the lagging was damaged and frayed. In respect of establishing the Defendant/Appellant’s knowledge of the dangers of asbestos and breach of duty, the Claimant/Respondent relied on the following:

  1. A Department of Education memo, circulated to all schools in 1967, which stated that the inhalation of asbestos dust was known to cause asbestosis, lung cancer and mesothelioma.
  2. The now well-known 1965 article in The Sunday Times which discussed the danger of exposure to asbestos.
  3. A letter from a health and safety practitioner as a preliminary expert report, which stated that the pipes were likely to have contained asbestos.

The Defendant/Appellant submitted a preliminary report from an occupational hygienist.

The Master held that the school knew or ought to have known of the condition of the lagging, the risk of exposure to asbestos, and that the pupils were using the room. He held that the memo and the article meant that it would be fanciful for the school to maintain that it did not have concerns about exposure to asbestos, and that the school should have curtailed access to the boiler room in light of such concerns. Therefore, the Master concluded that the school had no realistic prospect of defending liability and that a breach of statutory duty was incontrovertible. Medical causation and assessment of damages remained to be dealt with at trial.

The Appeal

The appeal came before Cavanagh J. The school contended that the Master had applied too high a standard in deciding whether or not it had a “real prospect of success” in defending the case on liability. The school accepted that the lagging had likely contained asbestos, but argued that it had neither actual nor constructive knowledge as to the risks of asbestos at the time such as would place it in breach. It argued that asbestos had been used up to 1975, that contemporary publications had suggested that it had posed no health risk and that competing interpretations of what was known at the time should be a matter for trial.

The Judge dismissed the appeal. Drawing on Silcock, the Judge held that the test of whether the Defendant/Appellant’s case had some prospect of success that was not fanciful was a low bar. The procedure was inevitably rough and ready and often conducted without the benefit of full expert reports. It was held that the Department of Education memo should have put the school on notice of the risk. The Master had been entitled to conclude that it was not reasonably arguable that contemporaneous reports about the safety of asbestos present in buildings in an undisturbed state could have assuaged concerns. That conclusion was supported by The Sunday Times article from 1965. As a result, the Master had been right to find that the school ought to have taken reasonable steps to prevent exposure to the asbestos lagging and dust. Foreseeability was to be judged in the context of the state of knowledge at the time and the Master had been correct in his conclusion that the school would not be able to establish that harm had not been reasonably foreseeable. The school might not have known whether the dust swirling in the boiler room was chrysotile, but there had been a clearly foreseeable risk of injury. The school’s own expert did not exclude the possibility that the dust was chrysotile.

Comment

This is an important appellate judgment re-enforcing two key aspects of the show cause procedure.

Firstly, it is only a low bar that a defendant has to meet. However, the test is a clear one and the Masters are specialist asbestos judges. This case is a reminder that the Masters should approach these cases pragmatically and realistically. 

Secondly, the Masters regularly apply this test to incomplete expert evidence, but that is no bar to a finding of a defendant having no prospects of success. Defendants can often generate the semblance of a coherent argument, but once one takes a step back, it is clear that that argument is not one that stands reasonable prospects at trial. The procedure is necessarily rough and ready. It is designed to ensure, so far as possible, that dying victims are not deprived of the ability to live the short remainder of their lives with a modicum of financial security.

Balls v Reeve & Thurlow [2021] EWHC 751 (QB)

This blog post was written by Megan Griffiths. It concerns the High Court’s judgment in the asbestosis case of Balls v Reeve & Thurlow [2021] EWHC 751 (QB). The successful Claimant was represented by Max Archer.

The Claimant alleged negligent exposure to asbestos whilst working as a carpenter for the Defendant between 1979-1984. He was set to work smashing and asbestos roofing and removing and cutting asbestos panels. This period represented 16% of his total employment period with the Defendant, there being no insurance in place for the remainder of his employment period. He was diagnosed with asbestosis in 2017, although there were references to asbestos related disease and fibrosis in earlier records and a history of chest issues stretching back to the 1990s. The claim was issued in October 2019. The Defendant contested breach, causation and limitation.

In particular, the Defendant argued that the Claimant’s date of knowledge was in the 1990s or alternatively 2013 when a note accompanied a scan made reference to ‘previous asbestos exposure’. The Defendant challenged the Claimant’s account of exposure to asbestos. It was conceded that if the Court accepted the Claimant’s account then breach of duty would follow. The Defendant challenged causation, arguing that causation in-fact could not be proven without the evidence of an occupational hygienist to confirm exposure to asbestos above the levels described in the Helsinki Criteria.

The Court found for the Claimant on every point.

Limitation

Primary limitation turned on date of knowledge, either actual or constructive. This was contested on the basis that the Claimant’s evidence was that he was aware of respiratory problems since the 1990’s; records in 2013 referred to fibrosis and bilateral pleural calcification “in keeping with previous asbestos exposure”; the Claimant’s expert opined that the Claimant had had respiratory disability since at least 2016; and the IIDB assessment recorded a date of onset of 2015.

The Defendant submitted that the Claimant’s actual knowledge was when he suffered symptoms, given that he knew that had respiratory problems dating back many years he must have known that they were both significant and attributable to his exposure whilst working for the Defendant. Alternatively, it was submitted that the Claimant had constructive knowledge when he first experienced symptoms, the Claimant should have asked if that might have caused his respiratory problems.

The Claimant submitted that time started to run with the diagnosis in 2017 and that it was relevant that asbestosis was “gradual and insidious” in its onset. There were no references to ‘asbestosis’ prior to 2017, the references to fibrosis before this point were a hypotheses and ought not to be treated as a diagnosis given the potential differential diagnosis of idiopathic pulmonary fibrosis. On constructive knowledge the Claimant submitted it was hard to see how he could have done more, having sought medical attention when he experienced symptoms, no treating doctors diagnosed their cause until 2017. Therefore the Claimant submitted that constructive knowledge began with diagnosis also.

On section 33, the Defendant submitted there was no contribution to the delay by the defendants, no adequate explanation for the delay and an evitable compromise of the cogency of the Claimant’s recollection. The Claimant submitted that failure to exercise section 33 discretion would deny him his meritorious claim, causing significant prejudice. There was no forensic prejudice to the Defendant as there was no documentary evidence before the Court, the position was unlikely to have been different if the claim had been intimated in 2013.

The Court found that there was no actual knowledge until the date of diagnosis in 2017 and that the earlier references to respiratory difficulties did not preclude this as he “clearly considered they were not sufficiently serious to bring them to the attention [of] his GP” [43]. The Court also accepted the Claimant’s submission of the “insidiously progressive” nature of the illness which the Court found was promptly diagnosed once manifested. Without a diagnosis he could not be said to have actual knowledge.  The Court also found that constructive knowledge did not arise until the date of diagnosis [44], it was noteworthy that in spite of ongoing investigations into his chest issues no treating doctor made a diagnosis until 2017. Therefore, the claim was issued in time.

But for the findings on primary limitation the Court made clear that it would have exercised its section 33 discretion in the Claimant’s favour on the basis that it would be “unjust” to deprive the Claimant of a remedy and there was no serious prejudice to the Defendant caused by the delay [45].

Causation and the Helsinki Criteria

The Defendant conceded that if the Court found for the Claimant on limitation then breach of duty would follow. It disputed causation however, on the basis that there was no expert evidence from an occupational hygienist and so it would be “unsafe” for the Court to presume that the Helsinki Criteria were met to prove that the exposure caused the asbestosis [47]. The Defendant highlighted that Professor Maskell, consultant chest physician, said that whilst his view was that the Claimant’s exposure was likely to meet the criteria, it “obviously would be for an occupational hygienist to confirm” [49].

The Claimant submitted that the nature of the Claimant’s asbestos exposure was moderate to heavy, evidenced by the Claimant’s evidence of fact and Professor Maskell’s expert opinion. He submitted that the Helsinki Criteria required 25 f/ml years of asbestos or “one year of heavy exposure or five to ten years of moderate exposure” [50]. The evidence in this case amply satisfied the second alternative even without occupational hygienist evidence on f/ml years. It was submitted that there was no attempt to go behind the diagnosis, this was medical question and an alternate diagnosis (namely IPF) had never been suggested by the Defendant.

The Court found that the combined evidence of the Claimant and Professor Maskell was “sufficient to prove, on the balance of probabilities, that he had moderate to severe exposure to asbestos … consistent with the Helsinki Criteria” [53]. The Court was particularly persuaded by the Claimant’s evidence that he used to blow asbestos dust away after cutting into asbestos materials with a handsaw so that he could make the next cut [52]. Other relevant factors were that the Claimant had not been exposed to asbestos in any other employment and that the diagnosis of asbestosis was not disputed.  

Comment

This judgment is likely to be seen by claimant asbestos litigators as an extremely promising one on limitation. The meaning of date of knowledge in asbestosis cases, where the onset is so gradual, has not always been clear. It was a curious feature of this case that the Defendant sought to challenge causation in fact (therefore challenging the diagnosis of asbestosis) whilst simultaneously arguing that the Claimant ought to have brought his action earlier on the basis that he knew that he had asbestosis. The Court’s finding that time does not run until the date of diagnosis on these facts is a welcome one. The decision on section 33 is similarly reassuring.

The findings on causation without occupational hygiene evidence are also extremely valuable. In many asbestos exposure claims occupational hygiene evidence is obtained as a matter of course which, provided it shows the Helsinki Criteria are met, strengthens a claimant’s case on causation. However, this judgment shows that such evidence is not always necessary where (i) the claimant’s factual account and medical evidence supports one year of continuous exposure or five to ten years of moderate exposure and (ii) that where the diagnosis of asbestosis is not challenged.

A copy of the judgment can be found here

Charmaine Haggerty-Garton (as Widow and Executrix of the Estate of Mr David Haggerty (Deceased)) -v- Imperial Chemical Industries Limited: Case Summary

Introduction

John-Paul Swoboda and Spencer Turner instructed by Dushal Mehta of Fieldfisher recently represented a Claimant in a claim which involved the common law double actionability rule and the circumstances in which the “flexible exception” to the rule can apply.   

The claim was brought by the widow of Mr Haggerty in England. Mr Haggerty died from mesothelioma following exposure to asbestos in Scotland in the 1970’s. The Claimant’s position was that Scots law applied to the claim. If Scots law was found to apply to the claim, the Claimant could bring a claim for ‘loss of society’ under section 4 of the Damages (Scotland) Act 2011, which had the potential to substantially increase the value of her claim. Relatives unable to claim in English law would also be able to join the action if Scots law applied.

This blog post considers the principles relevant to the determination of the applicable law in this claim.  

Applicable Law and the ‘Double Actionability’ Rule

The applicable law in this claim fell to be determined by the common law double actionability rule because the alleged tort occurred before the Private International Law (Miscellaneous Provisions) Act 1995 and the Rome II Regulation came into force.

The origins of the English common law position are set out in Phillips v Eyre (1870) L.R. 6 Q.B. 1 in which Willes J stated that:

“As a general rule, in order to found a suit in England for a wrong alleged to have been committed abroad, two conditions must be fulfilled. First, the wrong must be of such a character that it would have been actionable if committed in England. Secondly, the act must not have been justifiable by the law of the place of where it was done.”

Willes J’s decision came to be regarded as requiring the existence of a civil liability for the harm done which was imposed by the law of place of the tort. However, any civil liability would only be actionable in England if the circumstances of the case, had they occurred in England, would have also given rise to an actionable claim in tort.

The House of Lords considered the applicable law rules in relation to torts committed abroad in the case of Boys v Chaplin [1971] A.C. 356. The majority of the court affirmed the general rule of double actionability as was stated in Phillips.

The rationale for the double actionability rule is twofold. Firstly, it seeks to ensure that a person should not be liable for something which is lawful in the place that it is done and secondly, to provide that a person who is given protection by the laws of one country is protected against legal proceedings in other countries.

The Exception to the ‘Double Actionability’ Rule

In Boys, Lord Wilberforce emphasised that double actionability was to be the general rule but it was not invariable and was subject to a “flexible exception” where the court considers it just to apply it. The exception provides that a particular issue between the parties may be governed by the law of the country which, with respect to that issue, has the most significant relationship with the occurrence of that issue and the parties. The exception was not precisely defined in Boys when Lord Wilberforce said that there was:

“great virtue in a general well-understood [double actionability] rule covering the majority of cases provided that it can be made flexible enough to take account of the varying interests and considerations of policy which may arise when one or more foreign elements are present.”

Boys arose out of a road traffic accident in Malta. The Claimant and the Defendant were both normally resident in England but at the time of the accident were stationed in Malta as members of the armed forces. Maltese law provided that general damages could not be recovered for PSLA. The question for the House of Lords was whether or not the Claimant could recover the general damages in his claim brought in England.

The House of Lords determined that, although the Claimant’s claim would fail under the general rule of double actionability, there were clear and satisfactory grounds on which to apply the flexible exception. Lord Wilberforce particularly emphasised the fact that the parties were both normally resident in England and that no policy or interest of Malta would be adversely affected by the application of an English rule in a claim brought by one English party against another.

The difficulty with the exception is that the court in Boys did not provide a set of firm guidelines for determining when the exception could be invoked.

The flexible exception to the double actionability rule was considered again by the Privy Council in Red Sea Insurance Co Ltd v Bouygues SA [1995] 1 A.C. 190 (PC). In Red Sea Lord Slynn said that the exception could be invoked in cases in which the law of the place where the tort was committed was more significantly related to the case as a whole or to a particular issue than was the law of the country in which the action was brought.

The Court of Appeal further considered the exception in Pearce v Ove Arup Partnership Ltd [2000] Ch. 403 (CA). In that case there was a claim in respect of a breach in the Netherlands of a Dutch copyright which would not have been actionable if committed in England. The Court of Appeal said that “the plaintiff’s claim would be defeated if the court were to refuse to apply the exception. But the claim … is one where the English court would have given a remedy, under United Kingdom copyright law, if the facts alleged had occurred in England. This is not a case in which the claim is in respect of some wrong which is conceptually unknown in English law. In our view this is a case where … the exception to the double actionability rule enables the English court to apply Dutch law; and the English court ought to do so.”

In Sophocleous v Secretary of State for the Foreign And Commonwealth Office [2018] EWCA Civ 2167, the Court of Appeal restated the comment made by Lord Wilberforce in Boys, that there needed to be “clear and satisfying grounds” for the flexible exception to be applied. The Court of Appeal stressed the importance of the general rule and emphasised that the courts should not apply the exception readily.

Lord Hope in Kuwait Airways Corporation v Iraqi Airways Co (Nos 4 and 5) [2002] 2 AC 883 said of the exception that “unless a rigorous approach to this question is adopted, the application of the exception is at risk of giving rise to much uncertainty and to the criticism…that it has become instinctive and arbitrary”

The instant matter was listed for a preliminary hearing to determine whether Scots law or English law applied in whole or to any part of the claim.

The Claimant’s position was that there were clear and satisfying grounds for the Court to find that the applicable law to the claim was Scots law, arguing that:

  1. The exposure took place in Scotland.
  • The Damages (Scotland) Act 2011 provided for a significantly larger damages claim than under the Fatal Accidents Act 1976 and there was the potential for different family members to be compensated under different regimes which would be incongruous.
  • A group of potential claimants in Scotland may have had their claims extinguished if Scots law did not apply to the claim. It would therefore be unjust to minimise damages by reducing what was recoverable to the lowest common denominator as between Scots law and English law.
  • The stated goal of English law was ‘to fulfil foreign rights, not destroy them’, as per KXL v Murphy [2016] EWHC 3102 (QB).

The Defendant’s position was that:

  1. The parties were domiciled in England.
  • The consequences of the tort were and will continue to be experienced in England.
  • The Claimant chose to sue in England rather than in Scotland.

The matter was set down for a preliminary hearing in the High Court to determine the applicable law. Shortly before the matter came before the court the Defendant accepted the Claimant’s position that Scots law should apply to the claim.

The case provided an interesting insight into the authorities surrounding the principle of double actionability and the flexible exception the rule. This case demonstrates that the common law rules are by no means obsolete. Given the majority of asbestos cases involve exposure before the Private International Law (Miscellaneous Provisions) Act 1995 came into force, it is not expected that this will be the last time that practitioners and the courts have to grapple with the issues which arose in this case.

Deborah Head (Executrix of the Estate of Michael Head, Deceased) v The Culver Heating Co Ltd. [2021] EWCA Civ 34

This post was written by Samuel Cuthbert. It concerns the decision of the Court of Appeal in Head v The Culver Heating Co Ltd, which was handed down on Monday afternoon. The Court of Appeal overturned the decision of the High Court that the Deceased, a successful businessman, could not recover any loss of earnings because the profitability of his business would likely continue after his death and so any divided income from his shares in that business would survive his death. Mr Head was alive at trial but had sadly died by the time the case came before the Court of Appeal.

The judgment of the Court of Appeal can be read here.

Background

This was an appeal against the judgment of Her Honour Judge Melissa Clarke on the principal issue of what damages should be awarded for the Deceased’s ‘lost years’ claim, where the Deceased was the founder and managing director of his own heating and ventilation company, Essex Mechanical Services Ltd (“EMSL”). The Deceased was both paid a salary and received divided income on his shares in ESML.

At first instance

The Defendant relied upon Adsett v West [1983] QB 826in which McCullough J distinguished between earned income arising from a claimant’s capacity to work as recoverable in a ‘lost years’ claim, and income derived from capital surviving a claimant’s death which is not recoverable in a ‘lost years’ claim.

The Judge accepted the Defendant’s argument that the Deceased’s income was derived from his successful business and would not be lost. Accordingly, the judge valued this aspect of the claim at zero, in contrast to the £4 million which the Claimant sought. The Judge asked whether it was relevant for the purposes of a ‘lost years’ calculation that the Deceased’s dividend income from his EMSL shares would survive his death. The judge summarised her reasoning at [11]:

  1. the principles of Adsett v West applied;
  2. on the balance of probabilities, the profitability of EMSL was likely to continue after Mr Head’s death, therefore the dividend income from the shares that he and his wife held in EMSL was likely to survive his death;
  3. this dividend income was greater than the ‘surplus’ income he enjoyed;
  4. per Adsett v West, there was no loss in the ‘lost years’.

The Judge concluded at [70] that “the real distinction being drawn by McCullough J in Adsett v West is not between earned income and income from capital but from income which is lost on death and income which survives death”.

The Judge refused permission to appeal, as did Simler LJ on the papers. Following an application under CPR 52.30, which codified the principle set out in Taylor v Lawrence [2003] QB 528, the order refusing permission was revoked and the question was referred for determination by the Court of Appeal. Bean LJ, giving the lead and unanimous judgment, stated that:

“The overwhelming majority of Taylor v Lawrence applications are entirely unfounded but this one was a rare exception, perhaps the most striking one I have seen during six years’ service in this court.”

It was deemed necessary to reopen the determination of appeal in order to avoid “real injustice”.

On appeal

There were seven grounds of appeal. The first alleged that the decision was based on a misunderstanding of the expert accountancy evidence and a mistaken assumption that those experts had agreed that the profits of EMSL would continue undiminished after the Claimant’s death. Bean LJ found it unnecessary to resolve this ground in light of his judgment on the subsequent six grounds which are dealt with in concert.

Bean LJ accepted the position as set out in Adsett that the correct line to draw was between loss of earnings from work and loss of income from investments. Significantly, it was held, Adsett involved a claimant whose shareholdings and their respective dividend income had been gifted to him. Analogously, it was stated that had the Deceased retired prior to the onset of mesothelioma symptoms, the loss of earnings claim would be zero. However, it was accepted by HHJ Clarke that the Deceased was integral to the running of EMSL and that would have continued to be the case but for the mesothelioma.

The Deceased was paid a very modest salary which was fixed for tax efficiency and, as at [33], in light of the Deceased being the driving force behind EMSL “it made no sense at all […] to say that this was the full extent of his earnings from work.” As a matter of logic, all of the Deceased’s income from EMSL represented the fruit of his labours and not a return on an investment. The corollary to that is set out at [35] whereby Bean LJ recognises two points. First, at the point at which the Deceased would have stopped working full time, if he retained his shares in the company, his dividend income would be pro rata income on investments and not earnings from his work. Second, upon the Deceased stopping work altogether, any surviving dividend income would entirely constitute income on investments.

At [34], Bean LJ agreed with the Appellant’s submission that the nature of a ‘lost years’ claim was to compensate the earning capacity which had been personally lost by a claimant:

“Mr Head was free to dispose of that income in whatever way he chose. By contrast, as Mr Steinberg rightly observed, he could not make a testamentary disposition of his own future earning capacity. It was not necessary for him to be able to plead and prove what the cost of a replacement would be to EMSL: that would be to mischaracterise the nature of a lost years claim, which requires assessment of the value of the earnings or earning capacity which the claimant personally has lost.

The Court of Appeal therefore set aside the Judge’s assessment of  the ‘lost years’ claim, and remitted the case for an assessment of damages before the Senior Master.

Comment

This judgment is hugely significant in directing the manner in which courts address quantification of the ‘lost years’ claims. There is now clear authority that a lost years claim should reflect the annihilation of the claimant’s future earning capacity by their illness.The earnings which the Deceased lost were not a return on any kind of investment in EMSL, but a reflection of his acumen, experience, skill and hard work. The value of that work was extinguished upon the Deceased’s death, and so falls to be recovered. The fact that EMSL may continue to make a profit in the future is immaterial to the personal financial loss which the Deceased suffered by reason of the mesothelioma.

It further represents a recognition of the fact that, for the purposes of ‘lost years’ claims, any quantification of income must fully embrace the economic reality of a claimant’s business structure. Distinguishing between salary and dividend income for such purposes does not appreciate that such lines are drawn for the purposes of tax-efficiency. Separating the two artificially and unfairly hives off income which was nonetheless the fruits of the Deceased’s labours.

The language used by Bean LJ at [6] is striking: “I consider that it was indeed necessary to reopen the determination of this appeal in order to avoid real injustice”. Such bold statements of fundamental principle are rare and speak to the significance of this judgment for both the Deceased’s widow and claimants more broadly.This judgment affirms that properly compensating a claimant for their loss of earnings in the ‘lost years’ requires close scrutiny and appreciation of which earnings are the fruits of their labours, and which are a return on an investment. Bean LJ highlights at [35] that Mr Head’s evidence regarding the involvement he would have continued to have in EMSL as he aged was accepted by the judge at first instance. Logically it must follow that the assessment of damages maps that evidence in compensating the Deceased’s estate.

Harry Steinberg QC and Kate Boakes – instructed by Peter Williams of Fieldfisher LLP – acted for the Appellant.

Pinnegar (Skeen Deceased) v Kellogg International Corp & ICI Chemicals & Polymers [2020] EWHC 3431 (QB)

This post by Ivan Bowley – who acted for the claimant in the case – comments on the recent decision of the High Court in Pinnegar v Kellogg International & ICI. This case was a decision on the facts but dealt with a number of issues that sometimes arise in very old asbestos claims.


The deceased, Mr Skeen, worked for Kellogg International as a pipe fitter at ICI Wilton for about 6 – 8 months in the tax year 1966/67. He alleged that during this employment he had worked alongside laggers who were stripping old asbestos lagging and preparing replacement lagging, mixing asbestos paste and cutting asbestos sections. The deceased stated that at the end of a typical working day he was covered in white asbestos dust. He developed mesothelioma and died in 2017.

The only factual evidence on exposure was a single statement from the deceased taken shortly before he died. In that statement the deceased provided detail about his entire working life including his work at ICI Wilton. Some 50 years after the alleged exposure took place he recalled particular details about the site, the work that was generally taking place on site at that time and a number of specific details that were of limited relevance to the facts in issue but nevertheless demonstrated the quality of his recollection.

At an early stage the claimant sought judgment on Show Cause against both defendants, but this was successfully resisted. The defendants relied upon a preliminary report from their expert engineer, Dr Alan Jones of the IOM, who questioned the reliability of the deceased’s account. In common with many such claims with limited factual evidence the presentation of a preliminary report by defendants, questioning the veracity of that evidence, was sufficient to persuade the Master that the defendants had overcome the threshold test in Silcock v HMRC and should avoid judgment.

ICI’s defence asserted that at the material time it was aware of the dangers of asbestos, had in place suitable guidance about the risks of asbestos exposure and effective precautions designed to protect its own employees and the employees of contractors working on its sites. ICI’s disclosure supported this assertion, but it did not serve any witness evidence to show that such guidance had been given to workers or that precautions had been implemented.

ICI also disclosed a number of other important documents, one of which, a spread sheet showing the dates of the construction of various buildings at ICI Wilton, indicated that the deceased had probably worked on the construction of a particular building that had not been lagged with asbestos. A further document, described as an “as built” specification for the lagging within that building, recorded that all the lagging materials used were non-asbestos. Armed with this evidence the defendants denied exposure to asbestos and continued to deny the claim.

After exchange of experts’ reports and the preparation of their Joint Statement the Claimant’s expert engineer, Chris Chambers, identified an ICI document that had not been disclosed by ICI but which demonstrated that the non-asbestos lagging alleged by the defendants to have been used on site had only been developed close to the end of the tax year in which the deceased was exposed. The claimant’s case at trial was that the deceased must therefore have been describing exposure to asbestos lagging (a) because the non-asbestos alternative was not yet available commercially when he was on site, and (b) because the deceased had described being covered in “white” asbestos dust whereas the new non-asbestos lagging being developed at that time was coloured either “yellow” or “pink”.

It was against this background that the Judge had to consider the quality and reliability of the deceased’s original statement. As can been seen from the judgment (paras 6 and 42) the judge accepted that the deceased’s recollection was reliable.

At trial the defendants attacked the reliability of the deceased’s statement. They relied upon the decision of Leggatt J in Gestmin SGPS v Credit Suisse (UK) Ltd [2013] EWHC 3560, and in particular his comments at paras 16 – 20 of his judgment about the questionable reliability of claimant lay witness evidence. Gestmin is frequently relied upon by defendants, particularly at the Show Cause stage, to seek to undermine a claimant’s lay witness evidence and avoid judgment, often in circumstances where the defendant in question has no witness evidence of its own. A number of other judges have made similar comments to Leggatt J. However, more recent decisions, including CXB v North West Anglia NHS Foundation Trust [2019] EWHC 2053 and Smith v Secretary of State for Transport [2020] EWHC 1954 (QB) provide helpful commentary on the limitations of what was said in Gestmin. Ultimately, as HHJ Platts observed in the present case (para 5), these judgments do no more than remind judges of their fact-finding obligations. They do not provide statements of legal principle.

As part of the process of seeking to undermine the deceased’s evidence, at an early stage in the litigation the defendants sought disclosure of attendance notes prepared by the claimant’s instructing solicitor at the time the deceased’s statement was taken. This request was unsurprisingly refused on grounds of legal professional privilege. At trial the defendant brought the relevant correspondence to the attention of the judge and invited him to take the claimant’s refusal into account when assessing the deceased’s evidence. The object of this exercise was to add weight to the defendant’s assertion that the deceased’s statement may have been the product not only of his own recollection but was drafted with assistance from his solicitor. Correctly, in the writer’s opinion, the judge refused to attach any weight to the claimant’s refusal to disclose the relevant attendance notes (para 6).

The claimant succeeded at trial. Damages were agreed but the claimant’s solicitor had made an effective Part 36 Offer and the claimant therefore recovered an additional sum pursuant to CPR 36.17(4). This case is a useful reminder of the potential benefit to claimants using the Part 36 procedure.

Weyer v Prescot

This post was written by Aliyah Akram, who acted for the Claimant in this case.


This was a claim brought under the Law Reform (Miscellaneous Provisions) Act 1934. 

The Deceased, Mrs Weyer, was exposed to asbestos through washing her husband’s overalls. Mr Weyer worked for the Defendant, formerly known as Kitsons Insulations Limited, for almost 20 years. He was a thermal insulation engineer, or lagger, and so he worked extensively with asbestos insulation. 

In this assessment of damages, judgment having previously been entered against the Defendant, Michael Ford QC, sitting as a Deputy Judge of the High Court awarded the sum of £90,000 for pain, suffering and loss of amenity. 

In determining quantum the judge heard that prior to the onset of the disease the Deceased had been fit and healthy. He found that she was a brave and stoical woman who first saw her GP many months after she began to experience symptoms as a result of the disease. In total she suffered from symptoms as a result of the disease for around 14 months. 

She underwent chemotherapy but was not fit enough to continue with her treatment. Towards the end of her life she suffered from severe weight loss and struggled with intense pain. The judge noted that there were difficulties with controlling her pain and she struggled to sleep. He also commented on the tragic family circumstances, her husband had himself died as a result of lung cancer. Two of their children had also worked for the Defendant and been exposed to asbestos. The Deceased had lost around 10.6 years life expectancy. 

The judge also made awards for care (£9,250), travel expenses (350), miscellaneous expenses (£560) and funeral expenses (£4,284).

The case will be on Lawtel shortly.

Gendered experience of mesothelioma study

This post was written by Aliyah Akram, who was on the advisory group to the study.


In a study published this month, a research team from the University of Sheffield examined gendered experiences of mesothelioma. The full report is certainly worth a read by anyone practicing in this area but a number of findings are of particular interest to asbestos lawyers. 

The study relied on quantitative and qualitative data, both from interviewing patients with mesothelioma and from analysing results from the MORE survey and data from HASAG. 

Statistics show that mesothelioma is a significantly more common in men (83% of cases) than in women. The difference in experiences of the disease go beyond occurrence, however. Mesothelioma tends to be more aggressive in men, more invasive and metastasising. Unsurprisingly, therefore, women tend to have far higher survival rates. But further evidence shows that there may a steeper dose-response curve in relation to asbestos exposure for women. This would suggest that women are more susceptible to developing mesothelioma. 

This seems of particular relevance when the report considers how women are exposed to asbestos. Men tended to be exposed in construction-related occupations where they directly handled asbestos. For women para-occupational exposure via a family member’s overalls was common, but a significant proportion were exposed through their work. That exposure tended to occur due to asbestos materials in the working environment, rather than because they worked with asbestos directly. As we know, certain occupations which are dominated by women put them in the types of buildings in which asbestos use was especially prevalent, particularly schools and hospitals. 

The study also noted that women are less likely to seek legal advice and when they do are less likely to receive compensation. Female interviewees expressed concern that seeking compensation is too costly, time-consuming or would make the experience of living with mesothelioma more challenging than it already is. The researchers noted different societal expectations, where men are expected to provide financially but women were concerned about avoiding the emotional burden of legal action.

For asbestos lawyers, two of the report’s practice notes are worth bearing in mind:

  • It is important to take an occupational history which assesses the working environment as well as the work which was carried out. 
  • Further steps need to be taken to raise awareness of compensation routes for those who have not worked with asbestos directly.