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Recent developments in disease claims handling

Most of the news of the past year has been preoccupied with the volume and cost of NIHL claims, with the Civil Justice Council’s report into the claims handling process and the potential for fixed costs eagerly anticipated. In the meantime though, a couple of developments have been causing practitioners concern. Ian Macalister and Daren Charlton comment on the increasing delays in obtaining HMRC schedules and the potential deletion of records of defunct companies from the Companies House Register.  They also report on a new Court of Appeal decision on de minimis in asbestosis claims. 

Recent developments in disease claims handling

Backlogs and HMRC Schedules

Claimant solicitors are reporting a delay of 12 months or more, 396 days in some cases in obtaining HMRC Schedules from HM Revenue & Customs. At the same time insurer clients are reporting a significant reduction in new Noise Induced Hearing Loss claim notifications as the surge in deafness claims from the pre LASPO era recedes. It is possible there is some relationship between the delays experienced at HMRC and the drop in notifications. More likely the fall is related to the removal of success fees and ATE premiums as recoverable items of claimant costs in the minority of cases which succeed.

Claimant representatives are even suggesting non-party disclosure applications to force HMRC’s hand. Given the failure rate in Noise Induced Hearing Loss claims in some instances is running at well over 85% one has to question whether it would be an appropriate use of public funds to divert resources from dealing with enquiries made on behalf of more deserving asbestos victims for example.

Whilst the Protocol governing disease and illness claims states under paragraph 6.5 the claimant should provide an employment history and chronology supported by an HMRC Schedule, the Protocol does also encourage flexibility in approach in particular in relation to the arrangements for the disclosure of documents, see paragraph 2.6 for example. Occupational records are available under paragraph 4 of the Protocol in any event in cases where the proposed defendant is a “live” company. The delays experienced in obtaining HMRC Schedules are not a reason for failing to provide the required chronology and sufficient information as required under 6.8 to enable insurers to commence enquiries and put a broad valuation on the risk.

Companies House Records

The suggestion that Companies House may consider deleting the records of defunct businesses after 6 years, has been condemned by APIL and in our view rightly so. The risk that the victims of long tail disease and illness may be unable to trace the companies liable to them in respect of tortious exposure to toxins such as asbestos and other harmful agents will be highlighted.

Companies House on the other hand is concerned that the practice of retaining these records may be inconsistent with Data Protection Regulations. The claimant lobby however is right to be concerned. The records at Companies House can be a useful source of information in helping track and confirm insurance cover when policy records are often held in the name of a parent company. Further, the Third Parties (Rights against Insurers) Act of 2010 which came into effect this month allows actions to be brought directly against insurers in long-tail disease cases but only where either the insolvency event or the incurring of the liability occurred on or after the commencement date of 1 August 2016.

The question of when injury occurs and therefore when liability crystallises in the context of long-tail disease cases has occupied the courts in for example the Trigger litigation in the context of insurance policy liability, and in other instances in the context of limitation, see for example Arnold v CEGB (1987) HL. It is reasonably clear that in the case of mesothelioma the injury giving rise to liability occurs some time before symptoms manifest. Similarly in deafness cases the cause of action accrues when the damage occurs at or about the point of exposure.

In these cases it appears to us that the 2010 Act does not apply unless we are concerned with an insolvency from 1 August onwards and that strictly the claimant is required to trace and restore the companies which exposed him or her in the first place so as to recover under and enforce judgments under the Third Parties (Rights against Insurers) Act 1930.

Asbestos Exposure – de minimis exposures

The question of what constitutes minimal exposure too trivial to attract liability in an asbestos case is something which has been considered in the appellate courts in recent years.

Fairchild (2002) HL of course is authority for the proposition that negligent exposure which materially increases the risk of contracting the disease mesothelioma is sufficient for that exposure to be considered causative in the event the condition manifests and the tortfeasor is then liable to the full extent of the claimant’s losses under the Compensation Act 2006.

In Sienkiewicz (2011) SC, the Supreme Court was concerned with the level of exposure to asbestos needed to create a material increase in risk. The court stated that it was not necessary for a claimant to show that particular exposure had doubled the risk of contracting the condition; that was a step too far. Fairchild requires the claimant to establish only that the exposure had materially increased the risk. To require the claimant to prove that the exposure had doubled the risk was in effect to require the claimant to prove causation on the balance of probabilities. The court declined however to define in quantitative terms what level of exposure was or was not considered to be de minimis for the purposes of attributing causation. It was suggested in Sienkiewicz that the point may be reached where after comparison with other exposures a particular exposure was considered to be so slight in relative terms as to be insignificant in terms of its contribution to risk and therefore de minimis.

In Williams v Universityof Birmingham (2011) CA, the deceased had been exposed to very low levels of asbestos fibre amounting to at, or more than 0.1 fibres per ml but less than 0.2 fibres per ml for a maximum of 78 hours over an 8 week period in 1974. There was histopathological evidence of substantial exposures to crocidolite elsewhere. Lord Justice Aikens gave the lead judgment in that case in the Court of Appeal.

The court held that the exposures were not sufficient to give rise to any foreseeable risk of injury at the time that they occurred (in 1974 no reasonable university would have considered Mr Williams to have been at risk of harm in the circumstances as the judge found them). The defendants therefore won their appeal on that ground, namely there was no breach of duty, however they had also argued that the exposures were de minimis so as not to be causative of the deceased’s mesothelioma. Lord Justice Aikens said that the judge’s findings of fact justified a finding that the exposure outlined above had materially increased the risk albeit repeating and stressing the approach in Sienkiewicz that the question of whether an exposure materially increased risk is a matter for the trial judge who may or may not conduct a comparative exercise of relative exposures.

The problem in Williams was that the judge at first instance found first that the exposures had materially increased the risk of the deceased developing mesothelioma but had then conflated questions of breach and causation so as to go on to hold that the defendants had also breached their duty of care towards him notwithstanding the evidence that the exposures as she had found them would not have been considered foreseeably dangerous at the time.

Clearly there is a point when looking at exposures relative to the overall dose where one can say that such exposures are de minimis and do not amount to or constitute a material increase in risk. Dr Rudd seems to have settled in the past on a threshold of about 1% of the total exposure but factually of course given the very nature of long-tail disease claims, forensic examination and determination of the issues and the extent of exposure are always difficult.

Furthermore, as most of us are in some way exposed to asbestos fibres within the environment and do not develop mesothelioma, almost any extra environmental or occupational exposure may appear to have materially increased our risk, should the condition develop.

The cases above are cases about mesothelioma an indivisible condition, and the attribution of causation is subject to the special rule in Fairchild. Cumulative conditions such as asbestosis where the severity of the disease is related to the degree of exposure are of course different.

Carder v University of Exeter - Court of Appeal, 29 July 2016

In the recent case of Carder the Court of Appeal considered the case of an 87 year old man with a 40% disability from asbestosis caused by a lifetime asbestos exposure dose of some 51.26 fibre ml per year. An estimated 97% of his exposure had taken place in the 1950s but with a company that no longer existed and was not pursued, presumably through lack of traced insurance. About 0.3% of the exposure occurred with a hospital board in the 1960s, but proceedings against the hospital board had been discontinued. A further 0.2% of the exposure again occurred in the 1950s with a company which was not pursued and the remaining 2.3% occurred with the appellant university during the 1980s.

Dr Rudd had prepared evidence in the case on behalf of the claimant and had described the hospital board exposure (0.3% of the total dose) as de minimis. His evidence was that the University’s 2.3% contribution to exposure although small had made a material contribution to the asbestosis.

In answer to a series of narrow questions put to him by the University’s solicitors Dr Rudd conceded that in the context of the overall exposures the exposure with the University had not made any difference to the condition or appearance of the claimant’s lungs, his response to lung function testing, his subjective perception of the symptomology and his ability to cope with day to day tasks; he declined to quantify the minimum percentage exposure required to cause a material difference to the appearance and function of the lungs because whilst there is clearly a relationship between the severity of asbestosis and the dose received the dose response curve varies between individuals with some of us more or less sensitive to changes within the lung.

On the basis of Dr Rudd’s answers to the questions the University submitted that because its 2.3% contribution to the total exposure dosage had not made any difference to the claimant’s symptomology or prognosis it had not caused the claimant any actionable damage. Its contribution was de minimis in effect.

The Court of Appeal rejected this approach; the question following Rothwell (2007) HL is whether the claimant’s condition caused by the defendant has made the claimant worse off. In this regard it was significant that Dr Rudd’s evidence was that the risk of the development and the extent of the asbestosis increases in relation to the dose received; each source of asbestos exposure has contributed to the development of the condition itself in proportion to the dose. It was on this basis that Dr Rudd had originally said the 2.3% exposure had made a small but material contribution to the claimant’s asbestosis.

It would seem then that the test advocated by the court is to consider whether the culpable exposure from an individual employer was sufficient to materially contribute to the development of the overall condition. If it was then it will be deemed worthy of a pro rata share of that divisible condition, even though that small share cannot be said to have made the actual symptoms any worse than they would have been had that small additional exposure not occurred. As the claimant argued, to find otherwise would prevent recovery of any damages for the injured person with exposure across 50 employers with 2% each.

What if the claimant had not succeeded but then gone on to develop mesothelioma? An argument of de minimis would certainly fail in the context of that disease but would he be entitled to bring a second action against the defendant in relation to mesothelioma, the first action for asbestosis having failed on the basis that the culpable exposure had not caused material damage? The cause of action was not complete at the time of the first action because no compensable damage had occurred. On that basis a limitation defence would not necessarily arise?

As an aside we also observe that on the facts in Carder he may well have been entitled to a PWCA payment the recoupment of which when offset against damages would probably mean he recovered no money at all; however claims will none the less still be made in such instances in order to obtain provisional damages awards and protect the claimant’s position on limitation. 


For further information please contact Ian Macalister or Daren Charlton

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.