LUG Conference 2007 Non-traumatic harm: risk factors & legal issues

1. LUG Conference 2007Non-traumatic harm: risk factors & legal issues Alistair Kinley & Vanessa Latham

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

3. 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] introduction

4. Asbestos compensation • mesothelioma update - case law & legislation • recent government activity • claims numbers & claims handling

5. 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 mesothelioma update A ? B ? C

6. recent Government activity

7. 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 current developments

8. claims numbers & claims handling

9. 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))

10. Policy coverage • Divisible Pleural Thickening Asbestosis Indivisible Mesothelioma Lung Cancer

11. Divisible injury • Defendant only pays for the period of their exposure • Insurer pays only for the period on risk • Holtby v Brigham & Cowan (2000)

12. 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

13. 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

14. 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.

15. Bolton v MMI and CU (2006) • PL claim • CU 1960-65 when injury/illness “occurred” • MMI 1979-91 when injury/illness “occurs” • Court of Appeal found that injury occurs when the malignancy develops or symptoms identified

16. 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’

17. Following Bolton • “caused” – can you argue that can’t be provide you caused it, just that materially increased the risk? • Pre-1972 EL cover BAI, MMI, test cases • US – Triple Trigger approach? • Compensation Act 2006 • Reinsurance position

18. Noise-induced hearing loss • Long tail – reservoir of 20dB • Divisible dose related and cumulative • Noise related deterioration stop with exposure

19. 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

20. 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

21. 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

22. 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

23. Asymptomatic conditions& pleural plaques

24. 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? Pleural plaques “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

25. 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?

26. 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

27. Protection from Harassment Act • Limitation 6 years • Course of Conduct • Harassment – criminal liability • Foreseeability • Quantum – Singh v Bhakar & Bhakar (2006)

28. Majrowski v Guys and St Thomas’ • Vicarious liability • “course of employment” • Lister v Hesley Hall • No defence for employer

29. Insurance Coverage • EL policy • Anxiety/distress – is this covered? • “Mental Anguish” • Intentional Acts • PL Policy

30. Discrimination • Sex • Race • Disability • Sexual Orientation • Religion/belief • Age

31. Key Issues • Time limits – 3 or 6 months • Conduct must relate to status • Foreseeability not required • Damages for injured feelings - £500-£25,000 • Costs

32. 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

33. 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

34. 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

35. LUG Conference 2007Non-traumatic harm: risk factors & legal issues Alistair Kinley & Vanessa Latham