Emma Costin

On 17 October 2007, the House of Lords ruled in the case of Rothwell v Chemical & Insulating Co (and others) that people suffering from pleural plaques will no longer be able to claim compensation. Pleural plaques is a characteristic form of scarring to the lining of the lungs only caused by inhalation of asbestos dust. This is a landmark decision which reverses over 20 years of established legal precedent.

The House of Lords Decision
The House of Lords made a distinction between what they regard as serious asbestos conditions (for example mesothelioma and lung cancer) and pleural plaques which they regard as less serious. The Law Lords went so far as to say that pleural plaques are not even an injury and therefore should not attract compensation at all.

Prior to this decision, people who had been exposed to asbestos, either knowingly or recklessly, had regularly been successful in claiming compensation for pleural plaques. It is a basic principal of UK law that where a duty of care exists, for example between employer and employee, should the employer expose the employee to a foreseeable risk of harm, the victim has a right to make a claim if they are injured. The Lords decision means that even where fault is admitted, the victim will be denied compensation on the grounds he or she has not suffered an injury. Previously, victims were regularly awarded between £6-30,000 for pleural plaques.

The Insurance Industry
Norwich Union has estimated that this decision has saved the industry £1.5bn. FOIL (Forum of Insurance Lawyers) regards the Rothwell decision as a huge victory. One of the arguments rehearsed in the Court of Appeal was a need to avoid a US Style compensation culture.

Victims, Trades Unions and other claimant representatives will not be swayed by these arguments. In the first place, awards of damages (including damages for pleural plaques) have historically always been much lower in the UK than in the US. There is also the moral argument – these are genuine claimants who can demonstrate on x-ray or CT scan that asbestos has invaded their bodies and caused scarring. The entire point of employers’ liability insurance is that the employer is able to protect himself financially against civil claims made by his employees, should he breach his duty of care and injury occurs.

In the test cases, all of the employers admitted they had breached their duty to the victims, but denied this has caused any injury. Their Lordships agreed with this argument and we are now left with the bizarre situation that a person can recover compensation for a scratch to the back of his hand from which he fully recovers in weeks, but not for permanent irreversible scarring to the lining of his lungs and the knowledge that he is at increased risk of developing cancer.

The Construction Industry
From the 1950s through to the 1980s construction workers were regularly exposed to substantial quantities of asbestos dust. Asbestos was seen as a wonder mineral due to its heat resistant qualities and the ease with which it could be moulded or combined with other materials into a workable form.

Carpenters and joiners would work regularly with asbestos board (asbestolux, marinite) which would shed visible quantities of asbestos dust when sawn or machined.

As far as the construction industry is concerned, very often the employer was a local builder who has long since disappeared. Often the insurer cannot be traced and so the victim is unable to obtain compensation since no defendant company or insurer exists. The Association of British Insurers operates a database of employers’ liability policies which can be searched. If this locates a policy in existence at the time a victim was exposed to asbestos, a claim could be made.

In the 1960s many building and construction workers lost their employed status on the back of Harold Wilson’s Selective Employment Tax. In an effort to boost the manufacturing sector the service sector was in effect penalized for the number of employees on their books. Accordingly, many employers required their staff to become sub-contractors responsible for their own Tax and National Insurance stamps. If a sub-contractor is exposed to asbestos, he has no employer to claim against. Many thousands of people fall into the self employed category (including architects) and consequently they have been denied compensation by this decision, even when they develop asbestos cancer and the contractor for whom they worked can be traced.

When an employer or insurer could be traced, very often the victim would not recover full compensation since the chance of developing pleural plaques is directly dependent on the dose of asbestos inhaled. It is necessary to trace each and every employer who materially contributed to the risk. Workers in the building and construction industry were notorious for changing employers frequently, depending on who paid the post for the job in hand and it is not unusual for the employment history of such a person to list 20 or 30 companies all of whom may be potentially liable. The difficulty in identifying and tracing this number of defendants is one of the reasons why it was essential to instruct an experienced lawyer to handle the litigation.

Employers in the construction industry who are still trading however, are unlikely to be directly affected by the House of Lords ruling since Employers Liability Insurance has long been compulsory and should they be pursued by a victim, the insurer will pay. Insurers are not likely to reduce their premiums on account of this decision.

What next?
There can be no doubt that the House of Lords’ ruling will be devastating to many thousands of innocent victims of asbestos and their families, and that a significant proportion of these will come from the construction and building sector. A diagnosis of pleural plaques condemns a person to a lifetime of never knowing when a more serious condition is going to be diagnosed. This impacts on their loved ones as much as it does them. Moreover, once a compensatable disease has been diagnosed, such as cancer or mesothelioma, very often the victim is already too ill to contemplate a claim or even remember events up to 60 years beforehand.

It has already been announced that the Scottish Government is to introduce a bill to reverse the House of Lords’ judgement on pleural plaques. Due to the massive shipbuilding and other heavy industry in Scotland, the numbers affected are potentially huge. The provision of the bill will take effect from the date of the judgement. This will mean that an action can be brought in Scotland if there is a Scottish connection such as the claimant residing in Scotland, the exposure took place there or the defendant is a Scottish company. Other jurisdictions both in Europe and notably the US still permit claims for pleural plaques. However, the Ministry of Justice has let it be known that there are no plans to change the law in England and Wales, in spite of an ever-growing body in support of legislative action spearheaded by victim support groups, pensioners groups and trades unions. There is a strong feeling that injustice has been done and that the law has failed to protect the weak but favoured the strong.

The Rothwell decision will deprive thousands of genuine victims, whose employers admit fault, from the right to make a claim during their lifetime and secure a provisional judgement for the benefit of their families. The sums involved of up to £30,000 would have been significant to them, many are on low income and have no company pension.

These people are the real human tragedy simply because 30, 40 or 50 years ago their health and well being was ignored. The House of Lords is the highest court in the land, so unless parliament changes the law, this is the end of the road for pleural plaques victims.

Emma Costin is a partner with Simpson Millar LLP, specialising in Industrial Disease and Personal Injury Claims. She is also a member of the Association of Personal Injury.

Comments