Spreading out cost of asbestos

At the start of May, the House of Lords handed down a landmark decision in Barker v Corus (UK) plc (formerly Saint Gobain Pipelines plc); Murray v British Shipbuilders (Hydrodynamics) Ltd; Patterson v Smiths Dock Ltd and others (HL), changing the way in which compensation should be paid to those that have been negligently exposed to asbestos and contracted mesothelioma as a result.

The usual law of damages where a party has acted negligently, provides that it must be proved beyond the balance of probability that the defendant’s conduct caused the damage. In other words, it must be shown that but for the defendant’s negligence, the claimant would not have suffered any harm. However, in 2002 the House of Lords found that there should be an exception to this well established rule of law where the claimant had been negligently exposed to asbestos more than once, by more than one employer.

At present, it is not possible to say which of the exposures it was that led to a claimant suffering from mesothelioma. What science can tell us is that it is contracted by the instant inhalation of a single spore from asbestos and is not a result of cumulative build up from exposure to asbestos. Therefore, it is impossible to say when it was contracted.

The Lords found that the established rule of law relating to damages awarded as a result of negligence produced an unjust result, so they made a narrow exception to the rule by making a less demanding test in the circumstances outlined above. This allowed a claimant to claim against any of the employers that it could show had negligently exposed him or her to the asbestos. Whichever employer the claimant went against would be liable for the full amount of damages.

What this exemption meant was that if a claimant had worked for one employer for 20 years and another for two months, and if both employers had negligently exposed the claimant to asbestos, then the second employer will be fully liable. This scenario is not uncommon in asbestos cases as mesothelioma takes up to 50 years to materialise, by which time the employer may no longer exist.

In the recent case, the employers and their insurers made a challenge to the extent of the employer’s liability. The employers argued that the extent of their liability should be limited to the proportion of time that the claimant had worked for them. The employers also contended that they should not have to pay all of the claim where the other employers had gone out of business and their insurers could not be found.

The law lords agreed with the defendants by a four-to-one majority. This means that the liability of any one employer is now limited to the proportion of the contribution they made to the risk of that harm occurring. This decision is going to make it considerably harder for mesothelioma sufferers or their families to recoup all the damages they are due. The claimant will now have to pursue all their former employers where the asbestos exposure might have occurred. Coupled with the difficulty of doing this is the problem of past employers having gone out of business in the intervening years.

While this would seem to be a straightforward approach, the problem it generates is as to how the damages will be apportioned between employers. For, as Lord Hoffman pointed out, the proportion of risk that each employer is liable for will depend on the facts and circumstances of the claimant’s exposure to asbestos. For example, the exact type of asbestos the claimant was exposed to will be a factor as will the intensity of the exposure.

This means that it is now far harder to assess the award of damages in asbestos cases and will doubtless lead to some extended litigation. Each case will now be an issue of fact to be decided on the evidence particular to the case. Commentators have predicted that “there are likely to be more court battles to establish a coherent approach” (Financial Times, May 4, 2006).

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