Braille Live

A very bad deal for asbestos victims

Anthony Coombs and James Thompson

Summary

Mesothelioma is an invariably fatal cancer usually of the lining of the lung or abdomen. It is nearly always caused by asbestos and in particular by the “amphibole” blue and brown asbestos, which were mined in the Northern Cape and Northern Province of South Africa for many years. This association was first described by Dr Christopher Wagner in a seminal article in 1960, based on his research in the Northern Cape. In Britain there is a long-established tradition of suing employers for asbestos-related diseases.

Employer’s liability insurance has been compulsory for more than 30 years, but most large employers were insured well before that. There are practical difficulties in suing suppliers or manufacturers, not least because it is often not known who they are. Two recent developments will make it more difficult for asbestos disease victims, suing in Britain to obtain compensation through the courts.

Fairchild – a very unfair decision
Fairchild v Glenhaven Funeral Services and Others l February 2001, is an unjust decision which will herald the end of civil damages for most mesothelioma victims in the UK, if it is followed by other judges. Curtis J found on the basis of medical evidence from three leading British experts Drs Rudd Muers and Moore-Gillon. that the widow of Mr Fairchild had not established causation of his disease. Many commentators, and apparently these doctors themselves, think that the judge did not understand the medical evidence properly. He based his conclusion on what was no more than informed speculation about causation of mesothelioma by a single fibre or many fibres of asbestos.

Mrs Fairchild had established that her husband’s disease was caused by asbestos. She had sued defendants responsible for all his exposure. But the judge found she had not proved causation. Mr Fairchild had two significant periods of exposure to asbestos. The two occupiers of the buildings where those exposures took place were both defendants. The judge had no information to decide whether either defendant had exposed him to more asbestos than the other.

The three doctors agreed :

• that Mr Fairchild had died of mesothelioma;
• that all his asbestos exposure had increased his risk of developing mesothelioma;
• that the tumour started with the malignant transformation of one cell;
• that this transformation was a process in several stages probably involving six or seven genetic changes;
• that the exact mechanism by which asbestos caused this malignant change is not known.

Leading counsel for the defendants extracted from the doctors what were intended only as informed speculations about whether the malignancy was caused by a single fibre or a collection of fibres and about whether asbestos operated at one stage, or several stages in the process, and elevated these speculations to the central and decisive issue.

There are many diseases where the precise mechanism is not understood but the cause is established. Lung cancer caused by cigarette smoking is one example. It cannot be said that smoking causes an individual’s lung cancer, but it is known that smoking increases the risk and so causation is inferred by doctors. It is wrong to say that one fibre of asbestos caused mesothelioma, just as it is wrong to say that one particular cigarette caused someone’s lung cancer.

It is believed that the doctors involved in this case feel that their opinions were misunderstood and that an injustice has been done. It could never be proved certainly that a particular exposure to asbestos contributed to the development of mesothelioma, but it is known that it increased the risk and causation can be inferred. In medical terms, to cause a disease of which the exact mechanism is not known, means to increase the risk of the disease occurring.

The impression given is that the judge was led, by a well-prepared leading defence counsel, to a conclusion which is completely out of line with the medical view of causation and which defies common sense – by concentrating on the malignant transformation of one cell. The judge did not have the true picture that everyone has fibres in his lungs which do not cause disease and it is only when you have many thousands of fibres that you develop asbestos-related disease.

The only thing that is known for certain is that the risk of developing mesothelioma increases with the dose of asbestos and, where the precise mechanism of causation is not understood, then causation has to be seen in terms of risk.

In Fairchild Curtis J concluded that the number of fibres inhaled is immaterial. This was not the opinion of the doctors, who thought that each inhalation increased the risk of mesothelioma. The judge also concluded, that the more fibres are inhaled the greater the chances of one fibre succeeding in starting the cell transformation, whereas the doctors’ opinion is that no one knows whether it is one fibre or many fibres that initiate the reaction.

The judge considered two House of Lords decisions McGhee v National Coal Board [1973] 1 WLR 1 and Wilsher v Essex Area Health Authority [1988] 1AC 107 in finding that Mrs Fairchild had not proved causation.

McGhee involved a man who developed dermatitis. He worked in brick kilns, dust stuck to his skin and there were no showers at work. He went home by bicycle and could not take a shower until he got home. The employers were not in breach of duty by exposing him to brick dust but they were in breach of duty by failing to provide showers at work. The medical evidence was that their failure to provide a shower had increased the risk of dermatitis. But it could not be said that a shower at work would probably have prevented the dermatitis. The precise mechanism by which brick dust caused dermatitis was unknown. It was possible that all the dust played its part through an accumulation of small abrasions of the skin. It was also possible that dermatitis began with just one abrasion and spread so that many abrasions, just increased the risk. The House of Lords decided that a breach of duty which increased the risk of dermatitis was the same thing as a material contribution to the causing of the dermatitis. Causation was proved.

In Wilsher v Essex Area Health Authority, there were five possible causes of serious injury to a premature baby, but only one of these involved a breach of duty by the Health Authority. In Wilsher the court’s finding was that it was impossible to say, which of the five competing and different scenarios, had actually happened. Causation of the injury was not proven, because none of the potential causes was more likely to have happened than any of the others.

The judge in Fairchild Curtis J was clearly influenced by Wilsher although this is an old decision which had never previously been raised in the context of causation of mesothelioma. Many commentators think that McGhee is much more relevant to mesothelioma. In Wilsher there were five possible and competing causes of the injury. In McGhee there was only one possible cause – brick dust, just as there was only one possible cause of Mr Fairchild’s mesothelioma – namely asbestos. The state of medical knowledge about dermatitis, at the time of McGhee, is very similar to the present state of medical knowledge about mesothelioma. All that was known in McGhee was that all exposure to brick dust increased the risk of dermatitis, just as all that is known about mesothelioma is that all asbestos inhalation increases the risk of getting the disease.

In Fairchild, defence counsel was able to persuade the judge that because mesothelioma – unlike asbestosis – is not a cumulative condition, you cannot infer that a particular exposure has contributed to the disease. But the reality is that all doses of exposure did contribute, in the sense that any one of the exposures could have caused the disease on its own, each exposure increased the total amount of asbestos inhaled and therefore increased the chance of mesothelioma and there is no safe minimum threshold of asbestos exposure.

All the doctors involved in the Fairchild case apparently feel that it was a terrible result. The only certain medical knowledge is that if you do not understand the mechanism of causation then you define it in terms of risk. This was overridden by speculation. The judge’s decision on causation in the Fairchild case is a decision on its peculiar facts and medical evidence, and it is hoped and expected that other judges will not follow it. The Court of Appeal will consider Fairchild and linked cases during November 2001.

Iron Trades – a very unfair set up

Earlier this year it looked as though many asbestos disease victims in the UK would not, in the future, be compensated through the courts, because what was probably the biggest insurer for asbestos risks had reorganised its business.

The Iron Trades Group began employers’ liability insurance over 100 years ago and continued until 1990. By 1990 it was realised by its managers that disease (mainly asbestos disease) and other long-term claims undermined its viability.

A decision was made that the employers’ liability insurer, then known as Iron Trades Employers’ Insurance Association Limited, would stop writing new business. A new group company was set up to take on new business. The group was restructured, so that by 2000 the continuing profitable business of the group was sold to QBE International (a familiar name in Australian insurance) while the remaining part of the group, now known as Chester Street Holdings, was left to pay out on disease claims; its income from new premiums now gone and its remaining resources to pay claims depending entirely on a dwindling pool of built-up assets and investment income.

In December 2000, advice was obtained that the company might not be able to meet its future disease claim liabilities in respect of the pre-1990 policies (perhaps not surprising in the circumstances). The company was heading for insolvency. To manage its insolvent position, it announced plans for a “Scheme of Arrangement” – a complex statutory financial management tool, designed to avoid creditors taking proceedings to liquidate an insolvent company. Under such a scheme a creditor is paid only a percentage of each debt.

The scheme of arrangement was approved on 5 February 2001, by the main creditors of the insurance company – the few remaining conglomerates of traditional heavy industries, such as shipbuilding and steel making, where exposure to asbestos and excessive noise was heavy. The creditors are the employers, not the plaintiffs or prospective plaintiffs, so that individual claimants and their representatives have no power in the procedure.

The initial payment percentage has been set at 5%. The other 95% must be met by the employers if they still exist. Most do not. It was apparently important to set an initial percentage as early as possible, so that at least some payment would be made quickly. Many commentators wonder why the scheme administrators bothered. They say that they have been cautious in setting the percentage at 5%, with a view to ensuring that claims that will not arise for many years receive the same payment percentage as claims that have already arisen or may shortly arise.

So someone who might develop mesothelioma in 20 years was meant to be comforted by knowing he would get 5% of the value of his claim. And victims, whose court actions these insurers purported to settle shortly before the Scheme of Arrangement, and whose damages cheques have been dishonoured or withheld, were meant to be comforted by the fact that at least no-one else in the future would be paid more than them.

In reaching their decision to do what they did, these insurers appear to have been heavily influenced by the potential 40-year latency of mesothelioma and by predictions about the number of mesothelioma cases in Britain. Optimistic projections were that UK mesothelioma cases among former shipbuilders will have tailed off by 2012, but pessimistic projections suggest this will not happen until 2035. Outside shipbuilding a tail-off will happen between the years 2029 and 2036. Some commentators do not accept these assumptions and think that mesothelioma will in fact tail off much sooner than this, but there has to be great uncertainty.

What did look certain is that many of these victims will not be compensated by the civil justice system
There is a safety net. If the victim was exposed to asbestos after 1971 the policyholders Protection Act 1975 allows them to receive virtually full compensation. But the majority of our clients and most mesothelioma victims being diagnosed now were not exposed after 1971. We are commonly dealing with claims based on asbestos exposure in the 1950s and 1960s. If their employer has gone out of business, or does not have the assets to pay damages and happened to be insured with Iron Trades as many were, these victims stand to recover a maximum of 5% of the value of their claims with no safety net.

To rub salt into the wound, it is written into the terms of the scheme of arrangement, that defendants’ costs are recoverable in full from a claim before any of it is available to the claimant. There are few cases in which a defendant’s costs are less than 5% of damages. The result is that the percentage for most claimants might as well be set at zero.

A lethal combination
Before Fairchild a mesothelioma victim could have been confident of compensation through the courts, providing he could identify just one solvent or insured former employer. It was accepted that a victim of an indivisible injury, such as mesothelioma, would succeed jointly and severally against each employer at fault (and nearly all employers were at fault). Any employer who made a material contribution materially contributed to the risk of the mesothelioma and was liable for the entire damage.

If by any chance Fairchild were to stand as “good law” (how can such bad law be good law?) and if the Iron Trades/Chester Street Scheme of Arrangement had been allowed to stand, then to recover damages the victim would have to find either :

• the only employer who exposed him and hope that it was not insured by Iron Trades.

Or if he was exposed by more than one employer the victim would have to find

• the employer who exposed him to the majority of the asbestos he inhaled and hope that this “majority exposer” was not insured by Iron Trades.

The fact that there are now so many mesothelioma cases has changed the way they are perceived and handled by the English courts. From where we stand we see a shifting of the goal posts. The enlightened pragmatic and compassionate approach taken by the British courts just a few years ago to these diseases is on the wane. We should rage against the dying of that light.

Post script
This article was submitted for publication earlier this year. The injustice of the Iron Trades/Chester Street Scheme of Arrangement spurred a big campaign by trade unionists asbestos advice groups and many committed people aimed at restoring the right of asbestos victims to be compensated. This campaign bore fruit recently when the British Government announced that a new Financial Services Compensation Scheme will be created to pay compensation to asbestos disease victims who would have lost out completely as a result of the Iron Trades fiasco. This scheme will guarantee 90% of the value of claims for asbestos disease victims whose employers have gone out of business and who were insured at the relevant time by Iron Trades/Chester Street.

Anthony Coombs (BA Oxon) and James Thompson (BA Sheffield) are solicitors and partners in John Pickering & Partners of Manchester England who represent 2200 South Africans in the Cape plc asbestos disease case being pursued in England. The House of Lords decided in July last year that because legal aid is still available in England for multi-party or group actions whereas there is no funding for these complex and expensive cases in South Africa, the actions would be allowed to proceed in England, after a 3 year battle about forum. Since then Cape plc has indicated that it is interested in settling the cases if suitable terms are available. John Pickering & Partners also deal with claims for clients who have emigrated to South Africa and other countries and who develop asbestos related disease many years later as a result of their work in England.
See also 2000 (Oct) DR 4 and 47; (Nov) DR 56 and (Dec) DR 5 – Editor