business services construction & property insurance & indemnity leisure media & technology public sector retail transport

LUG Conference 2007

Non-traumatic harm: risk factors & legal issues

Alistair Kinley & Vanessa Latham

overview Introduction Asbestos compensation – legal & judicial agendas Policy coverage & triggers (Bolton v MMI) Noise-induced hearing loss Asymptomatic conditions & pleural plaques Harassment & discrimination Conclusions

introduction By non-traumatic harm we mean conventional

occupational disease risks and also psychiatric injury• why is it topical?• interest for insurers• social issues

“ Liability for psychiatric injury … is in general no different in principle from liability for physical injury … It is foreseeable injury flowing from the … breach of duty that gives rise to the liability.”Scott-Baker LJ, Hartman v South Essex Mental Health [2005]

Asbestos compensation

mesothelioma update - case law & legislation

recent government activity claims numbers

& claims handling

mesothelioma update

??A B C

issue year consequence 

Fairchild v Glenhaven 2002 House of Lords decides on joint & several liability for multiple tortfeasors

Barker v Corus 2006 House of Lords allows apportionment (discount) for unsued / untraced exposure

Compensation Act 2006 statutory reversal of Barker v Corus, to re-impose joint & several liability

FSCS reform 2006 for the first time allows FSCS to repay co-defendants and insurers & retains 90% pre-72

recent Government activity

current developments Child Maintenance &

Other Payments Bill Draft CPR Pre-Action

Protocol for Mesothelioma Claims?

Fatal Accidents Act reform (Scotland as example)?

a standardised judicial approach?

Ministry of Justice’s damages consultation

claims numbers & claims handling

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

200000

1900

1907

1914

1921

1928

1935

1942

1949

1956

1963

1970

1977

1984

1991

1998

2005

2012

2019

2026

2033

2040

2047

Year

Asb

esto

s E

xpos

ure

inde

x

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Nu

mb

er o

f d

eath

s

Exposure Index

Central estimate

Observed Mesotheliomadeaths

claims numbers & claims handling quicker handling

• draft CPR protocol, standardised judicial approach larger interim payments

• DWP reforms & draft CPR protocol more expensive claims

• DWP reforms will introduce CRU mechanisms retrospective costs

• DWP reforms (CM&OP Bill clause 49(3))

Policy coverage Divisible Pleural Thickening

Asbestosis

Indivisible Mesothelioma

Lung Cancer

Divisible injury

Defendant only pays for the period of their exposure

Insurer pays only for the period on risk

Holtby v Brigham & Cowan (2000)

Indivisible injury “each defendant liable in full for a claimant’s

damage, although a defendant can seek a contribution against another employer liable for causing the disease”

(Hoffman, Fairchild)

Phillips v Syndicate 992 (2003)

Insurer liable for full extent of C’s damages even though it only insured for part of C’s employers culpable exposure

ABI mesothelioma guidelines - EL Time based apportionment Pay and be paid. Apportionment first by employer

then by insurer Ignore void periods – no solvent employer

and no insurer Gap period paid by solvent employer or if

insolvent, by its insurer BUT Phillips

Policy Triggers Wording of policies differ

Long tail claims – cause and effect can be many years apart.

Mesothelioma - historically, EL coverage usually when the exposure occurred and PL, when malignancy occurs 10 years prior to symptoms.

Bolton v MMI and CU (2006) PL claim

CU 1960-65 when injury/illness “occurred”

MMI 1979-91when injury/illness “occurs”

Court of Appeal found that injury occurs when the malignancy develops or symptoms identified

Implication on Policy Trigger PL polices usually worded ‘occurs’ so will be

when malignancy occurs/symptoms develop

EL policies post 1 January 1972 should state injury or disease “sustained” by employee and “arising” out of their employment so will be when exposure occurred.

Pre-1972 policy wording varies – some which use wording ‘occurs’

Following Bolton “caused” – can you argue that can’t be

provide you caused it, just that materially increased the risk?

Pre-1972 EL coverBAI, MMI, test cases

US – Triple Trigger approach? Compensation Act 2006 Reinsurance position

Noise-induced hearing loss Long tail – reservoir of 20dB

Divisible dose related and cumulative

Noise related deterioration stop with exposure

Incidents of NIHL 1996 – 1.1 million-1.3 million people

exposed to noise in excess of 85dB(A) Self-reported work related illness survey

2001/2002 – 87,000 in GB believe they are suffering from hearing problems caused or made worse by work

The number of claims peaked in the 80’s

Nottinghamshire Textile Cases General date of knowledge

Noise and the Worker - June 1963 Code of Practise - 1973

Special or actual dates of knowledge

Noise at Work Regulations 1989 and 2005

Nottinghamshire Textile Cases 7 Test cases Daily exposure 80-86bD (A) Breach - no general liability

below 90dB(A) Diagnosis - History of exposure

PLUS

- “notch” on audiogram at 4kHz

Potential for Future Claims Insurers reporting increase New Legislation – Noise at Work

Regulations 2005 New Areas of Litigation call centres

leisure industry

motorcycles Acoustic Shock Syndrome

Asymptomatic conditions& pleural plaques

Pleural plaques Duty, breach, causation, loss Pleural plaques are asymptomatic, so what is the ‘loss’? The basic test case argument is, essentially:

• exposure + plaques + anxiety = £ compensation• however, doesn’t 0 + 0 + 0 = ??

House of Lords ruling expected before end of year Prospects of Government intervention thereafter?

“There was a lack of evidence of associated disability to justify adding pleural plaques to the list of prescribed diseases.” - IIAC Annual report 2004/05

Asymptomatic conditions The focus for now is pleural plaques, and there was an

unsuccessful amendment to the Compensation Bill

“The lodging in the body of a chemical or substance which may cause injury as a consequence of negligence or breach of statutory duty, shall give rise to a cause of action whether or not the lodging has caused symptoms at the time the action is commenced or brought to trial.”

Any other examples?

Harassment & Discrimination Protection from Harassment Act 1997

S1(1) A person must not pursue a course of conduct which he know or ought to know amount to harassment of another

Criminal offence to breach s1 Damages for any anxiety and financial

loss

Protection from Harassment Act

Limitation 6 years Course of Conduct Harassment – criminal liability Foreseeability Quantum – Singh v Bhakar & Bhakar

(2006)

Majrowski v Guys and St Thomas’ Vicarious liability

“course of employment”

Lister v Hesley Hall

No defence for employer

Insurance Coverage

EL policy Anxiety/distress – is this covered? “Mental Anguish” Intentional Acts PL Policy

Discrimination Sex Race Disability Sexual Orientation Religion/belief Age

Key Issues Time limits – 3 or 6 months Conduct must relate to status Foreseeability not required Damages for injured feelings

- £500-£25,000 Costs

Employment Tribunal Statistics

115,039 claims in 2005/06 23,810 discrimination claims 4,383 successful at tribunal £10,807

- £30,361 average award 1,038 costs orders

Insurance Considerations Employment Practises Insurance EL Policy wording Injury to Feelings – is this covered? Intentional Acts Exclusion of ‘claims arising solely out of

the contract of employment’ PL Policy – DDA Service Providers

Conclusions There is a continuing political and judicial

focus on UK mesothelioma claims We are entering a period of uncertainty

regarding ‘asymptomatic’ conditions Legislation against discrimination and

harassment is drawing EL & PL insurers into unforeseen areas

business services construction & property insurance & indemnity leisure media & technology public sector retail transport

LUG Conference 2007

Non-traumatic harm: risk factors & legal issues

Alistair Kinley & Vanessa Latham