House of Lords judgment on proportionate damages for asbestos claims
The House of Lords recently handed down judgment in the case of Barker v Corus (UK) plc [2006] UKHL 20 regarding the apportionment of damages in mesothelioma claims against employers. Previously, in the landmark case of Fairchild, it had been decided that where a person developed mesothelioma, each employer that had exposed them to asbestos could be held liable to the extent of 100% even though it could not be proved which exposure had caused the disease. In this latest decision, the House of Lords held by a 4-1 majority that where principle in Fairchild applies, and there are several employers/occupiers at fault each should only be liable for a proportion of the damage determined according to their respective contributions to the risk of injury.
Application of Fairchild
In Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22, the House of Lords addressed the situation where a claimant's disease was likely to have been caused by a single exposure out of numerous exposures to asbestos. None of these could be proved, on the balance of probability, to have been the one actually causing the injury. It was held that in the interests of justice the normal rules of proof of causation should not apply, and it was enough to show only that the defendants' conduct increased the risk of damage and may have caused it for each of them to be liable. The House stressed that crucial to this decision was the fact that it was evidentially impossible to determine which exposure caused the mesothelioma. For a further summary of the Fairchild decision, click here.
In Fairchild it was not suggested that the defendants should each be liable other than jointly and severally to the claimants for the full amount of the compensation, although they could seek contribution from one another in the usual way. Apportionment was assumed not to arise. In Barker the House of Lords has effectively changed its earlier view.
Relevant exposures
In Fairchild, all of the exposures to asbestos were either in the control of the defendant or were caused by negligence on behalf of an employer. In the case of Barker (but not the two cases heard alongside Barker), the deceased had been exposed to asbestos on three occasions, two of which were due to negligence on behalf of employers and one of which was due to lack of care by the claimant himself. The Law Lords considered whether the liability could still arise under the Fairchild principle when not all of the exposures involved breaches of duty to the claimant.
The House agreed that the issue of whether all exposures a claimant had received over time were tortious or not was irrelevant for satisfying the requirement of a sufficient causal link under the Fairchild principle. The fact that one exposure was not caused by negligence (or that such a tortious exposure was caused by someone who was not a defendant in the action or another person negligent in some other respect) would not affect liability. Thus cases in which the claimant has been exposed to asbestos 'innocently' or through his own carelessness in a period of self-employment are not a bar to the 'guilty' defendants being liable for having allowed the exposure.
Two of the Law Lords considered the question whether the Fairchild principle applies where the exposures involved two or more different causative agents, and concluded that it does not. For Lord Hoffman it was an essential condition for this exceptional liability to arise that the impossibility of proof of causation arose out of another potential causative agent which operated in the same way. As an example, he did not think that the exception would apply to lung cancer cases where asbestos and smoking were both cited as potential causes. Lord Scott was clearer in stating that Fairchild 'is a narrow exception to the causation requirements applicable to single-agent cases'.
Divisibility of liability
The most contested issue in the judgment concerned the correct analysis of the basis for the Fairchild principle, that is, the exceptional treatment of mesothelioma and other 'indivisible' injury cases under the law of tort. The standard rule of tortious liability is that it must be shown that the defendant's conduct caused the damage on the balance of probabilities. The majority of the Law Lords considered that the liability in Fairchild was not for having caused the disease but for negligently having increased the risk of the claimant's disease, when the risk had in fact later materialised. It was a short step for them to hold that it was possible to quantify each defendant's liability based on the relative likelihood each had contributed to that risk of the disease materialising. They held each defendant liable for a portion of the damages proportionate only to the extent of its negligent exposure. This was viewed a fair way of balancing the Fairchild principle which imposes liability on defendants who may have caused the harm in terms of negligently allowing exposure, but who equally may not have caused any harm at all.
Apportionment
On the basis that the liability of the defendant should in these circumstances be several, rather than joint and several, the House of Lords held that the damages should be apportioned. However, it did not decide exactly how this should be done, instead remitting the case to the High Court to determine that complicated factual issue. Lord Hoffman suggested that the most practical method of apportionment would be according to the relevant proportion of the time period of exposure, with allowance to be made for the intensity of exposure and type of asbestos.
Conclusions
The judgment in Barker has both clarified and narrowed the circumstances in which the Fairchild principle applies. In this respect it reflects the reluctance other courts have shown to extend Fairchild to different circumstances. It is clear that virtually all mesothelioma cases will fall within the exception. It is likely too that claims involving multiple exposures to disease-causing organisms like legionella or food-borne bacteria will be pursued on this basis when the defendant causing the alleged disease cannot be picked out and found liable on the balance of probabilities under the normal approach to causation. It can be envisaged that claimants in product liability cases involving e.g. pesticide exposures and drug side-effects will argue that the same principle applies to manufacturers for breaches of statutory duty under the European Product Liability Directive. This however would involve extending Fairchild principle further than its current scope since liability under the directive is unrelated to negligent exposure of product users to risk, and is specifically expressed as being for damage caused by a defect. Product claims brought on this basis will probably therefore be subject to the normal more challenging rules of causation. In any case, the clarification that the Fairchild rule applies only to 'single agent' cases (or at least ones which involve causes operating by the same mechanism) should prevent a flood of speculative claims based on tenuous scientific theories of causation where other more plausible possible causes can be shown.
The more immediate significance of the Barker decision is to reduce the burden of claims on the insurance industry and employers who are self-insured for asbestos claims. No longer will they in effect subsidise insolvent companies and insurers. (In one of the cases in the Barker decision 83% of the period of exposure was attributable to insolvent companies and their insurers.) Apportionment of damages brings its own problems however in terms of additional costs and expert evidence, and protocols will need to be developed for the economic disposal of the many mesothelioma cases expected to arise in the future.
The adverse impact on the compensation recovered by victims in these cases is also substantial and there is political pressure on the government to ensure that there is joint and several liability in Fairchild principle cases. Legislation may yet reverse the significant victory which Barker represents for employers, occupiers and their insurers.
