Asbestos compensation

Earlier reports that the floodgates for litigation would open following the
Law Lords’ ruling on victims of mesothelioma may well prove to have been
exaggerated, by Nic Paton

Historic, landmark, groundbreaking, the most significant decision in the
history of industrial disease compensation, was how May’s ruling by the House
of Lords in the cases of three people suffering from asbestos-related diseases
was described by the media and commentators.

The judgment, it was claimed, would open the litigation floodgates for
litigation for thousands of people with such illnesses contracted through their
workplace, and cost insurers billions of pounds in damages.

Now the dust has settled somewhat, the reality, it appears, is a little more
prosaic. The ruling by the five Law Lords – the highest court in the land –
headed by Lord Bingham, overturned an earlier Court of Appeal judgment that
argued that compensation could not be paid to workers exposed to asbestos dust
by more than one employer.

The Fairchild case

The Lords were primarily considering a case known as the Fairchild case. It
was a claim backed by the construction union Ucatt brought on behalf of Judith
Fairchild, whose husband Arthur died of mesothelioma in 1996.

Arthur Fairchild had been exposed to asbestos while working for Leeds City
Council in the early 1960s and later for the games maker Waddingtons.

The claim for compensation had been rejected by the High Court and
subsequently by the Court of Appeal. Had she lost in the Lords, Fairchild would
have faced a legal bill of around £1m. Instead, she will now receive
approximately £191,000 in compensation.

Two other claims were also considered. The first was that of Doreen Fox,
widow of Thomas Fox, who worked for a firm called Spousal (Midland) and for
several employers at Liverpool docks.

The third claimant was Edwin Matthews, 54, from Rochester in Kent, who is
dying from mesothelioma.

Matthews had been awarded compensation of £155,000 by the High Court, but
this was overturned by the Court of Appeal ruling. A former factory worker, he
had brought his claim against two employers, Associated Portland Cement and
British Uralite.

Ucatt, perhaps inevitably, hailed the decision as a momentous victory, and
one that could cost British businesses between £6bn and £8bn.

Implications for employers

Union leader George Brumwell said: "This judgment will help tens of
thousands of sufferers from the asbestos-related disease mesothelioma and will
teach the insurance industry a lesson it will never forget."

But personal injury lawyers were more circumspect about the importance of
the Lords’ decision and its implications.

Adrian Budgen, head of the asbestos diseases unit at solicitors Irwin Mitchell,
a company that handles many asbestos-related cases, was frank about its
ramifications. "This is not going to open the floodgates. The cost is more
likely to be closer to £200m to £300m. It is very easy to talk about huge
numbers and big figures, but we are not talking about billions of pounds – that
is scaremongering.

"Really, what the Law Lords have done is go back to how the law was
before 1 February last year," he explained.

The earlier Court of Appeal ruling took the view that if you had a case
where there was more than one wrongdoer, some of which may have since gone out
of business, then it was wrong that the surviving firms should have to pay for
the negligence of others.

What Lord Bingham and his colleagues decided was that, if a person suffering
from mesothelioma had been exposed in several places then rather than saying it
was not possible to prove which of those companies contributed, all defendants
should contribute because they all exposed the claimant.

"All defendants who are sued then pay, so the claimant will receive 100
per cent of damages," said Budgen.

Full judgment awaited

The rarity of this case was not so much in the ruling itself, but the fact
the Lords revealed their decision before publishing their full written ruling.

Until that full judgment is available, the ramifications for OH
professionals will not be completely clear. But it is likely the main
implication will be in how far this judgment applies to other similar
industrial diseases.

Because of the stringent laws now covering asbestos, cases involving
mesothelioma are by and large historical, going back decades. This is less so
in cases of, say, asthma or vibration white finger, both of which could
feasibly come under the remit of the ruling. Companies might also have to take
an even closer look at the due diligence procedures surrounding the transfer of
business, potential risks and liabilities and so forth.

"It would seem that the Fairchild principle would apply to any cancer
case or asthma case. It is any injury that would be cumulative," asserted
Budgen.

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