By : James Watthey
The House of Lords ruled that where a claimant’s mesothelioma was caused by one of a series of employers, but he cannot show which one, he may still have a claim. The reasoning of their Lordships could have implications wherever scientific opinion is unsettled or evidence of causation is unclear. Accordingly, insurers of all marine and commercial concerns should take note of the decision.
On 16 May 2002, the House of Lords handed down a unanimous ruling in favour of a set of claimants in Fairchild v Glenhaven & Others, an appeal from the Court of Appeal. This ruling clarifies the law on the extent to which an employer can be held responsible when people who have worked for them go on to develop mesothelioma, an asbestos-induced cancer. In particular, overturning the judgments of the lower courts, their Lordships ruled that where a claimant’s mesothelioma was caused by one of a series of employers, but he cannot show which one, he may still have a claim.
The potential costs to industry could be immense. Lord Justice Brooke in the Court of Appeal said that around 1,550 people a year are diagnosed with mesothelioma in the UK, of which about 1,500 cases are due to exposure to asbestos. Due to the large number of potential claims, the BBC has estimated that this ruling will lead to insurance claims of £6 – 8 billion over the next 20 years. Many members of the insurance market have disputed these estimates, however, and some have considered it unlikely that any increase in reserving would be necessary.
Asbestosis is “divisible” or “cumulative” in nature, meaning that the risk of developing it increases with each period of exposure to asbestos. Mesothelioma, in contrast, is thought to be an “indivisible” disease, in the sense that it can be triggered by one period of exposure and, indeed, by the inhalation or ingestion of a single fibre. Medical opinion, however, is not fully decided on the aetiology of mesothelioma; there is a current view that, although it is not a “cumulative” disease, multiple exposures may increase the risk of contracting mesothelioma, by weakening the body’s defences over time.
It was common ground among the parties to the action that it could not be said whether any one particular period of exposure, and therefore any one particular Defendant, was to blame for the Claimants’ conditions.
The various appeals were heard together in the Court of Appeal and, subsequently, by the House of Lords. There were six claimants when the Court of Appeal heard the case, although only three claimants followed their claims through to the House of Lords. Of those six original claimants, five were suffering with, or had died from, mesothelioma by the time the Court of Appeal gave its judgment. A sixth claimant had already suffered asbestos-related lung damage and was at a serious risk of developing mesothelioma in the future.
The claimants had worked for various employers throughout their careers and had been exposed to asbestos in many situations.
The Law before Fairchild
The leading case on causation was Bonnington Castings Ltd v Wardlaw , in which the House of Lords set out the general principle that the Claimant must show on the balance of probabilities that the Defendant’s wrongful acts caused or materially contributed to the injury.
The Bonnington Castings principle was applied and expanded upon by the House of Lords in McGhee v National Coal Board. In that case, a workman (Mr McGhee) who was used to emptying pipe kilns at a brickworks was sent to empty brick kilns at a place where working conditions were much hotter and dustier than those to which he was accustomed. In breach of duty, his employers failed to supply him with washing facilities, so that he had to cycle home caked in dust and sweat. Following this breach, Mr McGhee developed extensive irritation of the skin and was diagnosed as having dermatitis. Medical evidence showed that the dermatitis was caused by repeated minor abrasions to the outer horny layer of skin, followed by contact with the underlying cells. The effect of such abrasions was cumulative. This process was accelerated where a person was exerting himself or sweating, and the only way to prevent further injury was by washing the skin. The House of Lords ruled in favour of Mr McGhee:
Lord Salmon said that an employer is liable if a Claimant can show on a balance of probabilities that his employer had been negligent and that his negligence had materially increased the risk of the Claimant contracting an industrial disease.
Lord Reid referred to the inconclusiveness of the medical evidence, and considered whether it would make any difference if dermatitis could begin as a result of one abrasion and then spread after further exposure, so that the multiplication of abrasions merely increased the risk of dermatitis. His Lordship said that:
“From a broad and practical viewpoint I can see no substantial difference between saying that what the defender did materially increased the risk of injury to the pursuer and saying that what the defender did made a material contribution to his injury”
Lord Simon and Lord Kilbrandon, however, considered that the principle only applied to where there were “cumulative” causes; the principle did not therefore necessarily apply to mesothelioma sufferers.
Lord Wilberforce took an entirely different approach, holding that the burden of proof should shift, so that each defendant is required to prove on the balance of probabilities that his negligence did not cause the claimant’s injuries.
Despite the speeches of Lord Simon and Lord Kilbrandon, a mesothelioma sufferer managed to succeed in Bryce v Swan Hunter Group plc as long ago as 1987. The Claimant was unable to show that the asbestos dust which he inhaled as a result of his successive employers’ negligence was the effective cause of his illness. At the same time, however, the employers could not disprove that their respective breaches contributed to the Claimant’s illness. The Judge held that the Claimant could succeed by invoking “the principle in McGhee”. It is worth noting that the medical evidence before the Judge in Bryce was seemingly very different to that adduced in Fairchild, and the nature of mesothelioma was found to be cumulative, in the same way as asbestosis.
Finally, and in contrast to Bryce and the generally held view at the time, the House of Lords said emphatically in Wilsher v Essex Area Health Authority, that McGhee laid down no new principle of law whatsoever; the earlier ruling was, said Lord Bridge, simply a robust and common sense response to strong and undisputed primary facts.
Legal arguments in the Court of Appeal
Arguments of the Claimants
It was argued on behalf of Mr Fairchild’s widow that where the substance which caused an injury was known, the principle in McGhee v National Coal Board  1 WLR 1 must apply: a causal link had been shown between the asbestos and the mesothelioma, and it was not necessary to go further and show the precise method by which asbestos inhalation leads to mesothelioma. Further, a situation where medical evidence was unclear called for the application of robust common sense by the trial judge. Given the impossibility of proving which particular fibre of fibres caused the injury, counsel urged the court not to over-refine the concept of causation or engage in a “sub-atomic speculation” requiring proof of what could not be proved.
Counsel based further arguments on the medical evidence and the prevailing medical opinion. He showed how before Mr Justice Curtis’s judgment medical experts had equated a “material increase in risk” with a “material contribution to causation” of a disease and submitted that it was legitimate for the courts to do the same. Dr Hind, who had given evidence for the employers at the trial of Mr Matthews’s case, admitted that he had often said in past reports that mesothelioma was caused by exposure to asbestos and then left it to the lawyers to determine the apportionment of damages. Mr Fairchild’s medical expert, Dr Rudd, went further and said:
“In consideration of causation of a particular mesothelioma, medical science does not take a narrow mechanistic view, ie that the disease was caused only by the fibre or fibres which brought about the malignant transformation of the particular mesothelioma cell, any more than it takes the view that a lung cancer was caused only by the particular molecule or molecules of tar from one or more cigarettes which actually brought about the malignant transformation of a particular bronchial epithelial cell to a lung cancer cell. Rather, when it is not possible to have precise mechanistic knowledge of the mechanism of malignant transformation, medical science takes the view, on the basis of epidemiological evidence, that all factors which contributed to the risk that malignancy would occur contributed to causation of the malignancy. Hence, all asbestos fibres inhaled are considered to have contributed to causation of a mesothelioma in the same way that all cigarettes smoked are considered to have contributed to causation of a lung cancer”.
Counsel for Mrs Fairchild argued that operation of the McGhee principle did not depend on the existence of a single defendant. Further, the danger of damages being awarded against the “wrong” employer could not be regarded as conclusive, since, even on the facts of McGhee, the employer could have been held liable for damage which was not caused by its default.
Underlying the Claimants’ submissions was a policy-based view expressed by Counsel as follows: if the tort system is to fulfil its function in preventing risks to health and safety being taken, it ought to provide compensation in a situation where such risks occur in breach of duty, where the persons responsible for such breaches are all before the court, and where there is no reason to excuse them from the financial consequences. The reasonable man in the street would regard it as thoroughly unfair and unjust if this did not happen.
Arguments of the Defendants
Counsel for Waddingtons bore the main burden of the Defendants’ response to the Claimants’ submissions. He pointed out that it was just as likely that a mesothelioma was initiated by a single fibre as that it was initiated by more than one fibre, and that it was just as likely that it was caused by environmental exposure as that it was caused by exposure at work. Moreover, even if the only sources of asbestos exposure were at work, it could not be shown who the particular workman was working for when he succumbed. Therefore, he said, this case was one in which nothing could be proven on the balance of probabilities: of the thousands of millions of asbestos fibres these men may have inhaled during a working lifetime, nobody could say on the balance of probabilities which fibre or fibres were responsible for causing or materially contributing to their mesothelioma. The medical evidence was incontrovertible: if Mr Hind had been Mr Matthews’ own doctor and been asked what caused his mesothelioma, the advice would have been that it was impossible to say.
It was further argued that a causal link could only be inferred where, as in McGhee itself, there was no evidence suggesting another tortfeasor or another causal agent. It would, he said, be wholly unjust to use the McGhee principle to leap an evidential gap in order to hold a single defendant who happened to be before the court 100% liable for the claimant’s mesothelioma.
Defence Counsel went on to accept that if the medical evidence had shown that the development of mesothelioma was part of a cumulative process, then the court might legitimately infer that each exposure to “guilty” dust materially contributed to the causation of the disease, but he maintained that no such inference could be made on the evidence available.
The Judgment of the Court of Appeal
Lord Justice Brooke handed down the unanimous judgment of the Court. However sorry they felt for the Claimants, their Lordships considered that their contentions amounted to an attempt to leap over an evidential gap, and presented a serious danger of injustice. There was a danger that a finding in favour of the Claimants could impose liability for the whole of an insidious disease on employers with whom they had worked for quite a short period, even though they were unable to prove that the particular period of employment had any causal link with the inception of the disease.
Their Lordships considered that this would be:
“distorting the law to accommodate the exigencies of a very hard case. We would be yielding to a contention that all those who have suffered injury after being exposed to a risk of that injury from which someone else should have protected them should be able to recover compensation even when they are quite unable to prove who was the culprit”.
It was said that this was “too weighty an edifice to build upon the slender foundation of McGhee”. Furthermore, the reasoning in McGhee had no application here: the reasoning only worked in McGhee because it involved only one possible causative agent and one possible defendant.
Finally, their Lordships remarked that, if the Claimants had a claim under the Pneumoconiosis etc (Workers’ Compensation) Act 1979, the costs to the exchequer would probably run into tens of millions of pounds a year. If they had no such claim, then there was a “major injustice crying out to be righted either by statute or by an agreed insurance industry scheme”. Efforts to reach such an agreement failed, and the appeals went ahead in three of the original actions.
The Speeches in the House of Lords
The House of Lords overturned the Court of Appeal and ruled in favour of the Claimants.
It is clearly stated in all of their Lordships’ speeches that this is a ruling whose application should be very narrowly contained to closely analogous facts. For example, Lord Bingham was clear that the ruling applied only where:
“(1) C was employed at different times and for differing periods by both A and B, and
(2) A and B were both subject to a duty to take reasonable care or to take all practicable measures to prevent C inhaling asbestos dust because of the known risk that asbestos dust (if inhaled) might cause a mesothelioma, and
(3) both A and B were in breach of that duty in relation to C during the periods of C’s employment by each of them with the result that during both periods C inhaled excessive quantities of asbestos dust, and
(4) C is found to be suffering from a mesothelioma, and
(5) any cause of C’s mesothelioma other than the inhalation of asbestos dust at work can be effectively discounted, but
(6) C cannot (because of the current limits of human science) prove, on the balance of probabilities, that his mesothelioma was the result of his inhaling asbestos dust during his employment by A or during his employment by B or during his employment by A and B taken together”.
The Basis of the Ruling
Each of the five Law Lords gave their own individual reasons for allowing the Appeal.
Lord Bingham apparently abandons the balance of probabilities test altogether and bases his conclusion on the grounds of “justice” and “common sense”:
“To the question posed in paragraph 2 of this opinion I would answer that where conditions (1)-(6) are satisfied C is entitled to recover against both A and B. That conclusion is in my opinion consistent with principle, and also with authority (properly understood). Where those conditions are satisfied, it seems to me just and in accordance with common sense to treat the conduct of A and B in exposing C to a risk to which he should not have been exposed as making a material contribution to the contracting by C of a condition against which it was the duty of A and B to protect him. I consider that this conclusion is fortified by the wider jurisprudence reviewed above. Policy considerations weigh in favour of such a conclusion”.
Lord Bingham expressly rejected the view that McGhee had been based upon the drawing of a factual (rebuttable) or legal (irrebuttable) inference about probability. Rather, he considered that it was preferable in the interests of transparency to state explicitly that the court’s were taking a completely different approach to the issue of causation.
Lord Nicholls of Birkenhead also considered that good policy reasons existed for departing from the usual threshold “but for” test. Subject to a de minimis exception, his Lordship considered that each employer’s wrongful exposure of its employee to asbestos dust and, hence, to the risk of contracting mesothelioma, should be regarded by the law as a sufficient degree of causal connection. It was emphasised that considerable restraint was called for, and that his reasoning was not intended to lead to a relaxation of the “but for” test wherever a claimant has a difficulty discharging the burden of proof, since this could become a source of injustice towards defendants. There must be good reason, which is sufficiently weighty to justify depriving the defendant of his usual protection. According to his Lordship, however, it was impossible to be more specific. In common with Lord Bingham, Lord Nicholls rejected the notion that causation was being “inferred” and said that it would be better to recognise openly that the House was applying a different and less stringent test.
Lord Hoffman considered that a rule requiring a link to be demonstrated between the Defendants’ wrongdoing and the Claimants’ disease would, in multiple employer cases, empty the duty of care of any content. His Lordship agreed that the exercise had nothing to do with drawing an inference, and also emphasised that his ruling should be confined to facts which were truly analogous.
Lord Hutton differed from the other Members of the House in that he considered that McGhee had involved a factual inference about causation from the available evidence. His Lordship held that, in the interests of justice, it should now be held as a matter of law that this approach should be followed in cases such as the present one, where the state of existing medical evidence does not allow a claimant to show which employer’s breach caused his disease.
Lord Rodger of Earlsferry agreed with the reasoning of Lord Bingham, and also placed much emphasis on policy arguments. Following McGhee, his Lordship held that, by proving that the Defendants individually materially increased the risk that the men would develop mesothelioma due to inhaling asbestos fibres, the claimants are taken in law to have proved that the Defendants materially contributed to their illness. His Lordship considered that a number of conditions were necessary (but not sufficient) for the McGhee principle to come into effect: firstly, that the claimant has proved everything he can but the current state of scientific knowledge leaves uncertainty about how and by whom his disease was caused; secondly, that the defendants’ conduct created a material risk to the claimant personally; thirdly, that the defendants’ conduct must have been capable of causing the claimant’s injury; fourthly, that the claimant’s injury was caused by the eventuation of the kind of risk created by the defendants’ wrongdoing; fifthly, the claimant must therefore usually show that his injury was caused by either exactly or almost the same agency as was involved in the defendants’ wrongdoing; and, sixthly, the principle applies where the other possible source of the claimant’s injury is a similar act or omission of the same defendant (whether wrongful or otherwise) or a similar wrongful act or omission of another person. His Lordship expressly reserved his opinion on whether the principle applies where the other possible source of the claimant’s injury is a similar but lawful act or omission of someone else or a natural occurrence.
Policy played an extremely important role in this ruling. The speeches are heavily scattered with references to “fairness”, “justice”, and “common sense”. In addition to the remarks of Lord Bingham set out above, Lord Nicholls, for example, says:
“I have no hesitation in agreeing with all your Lordships that these appeals should be allowed. Any other outcome would be deeply offensive to instinctive notions of what justice requires and fairness demands”.
Further, in response to the Court of Appeal’s view that a finding in favour of the Claimants could unfairly impose liability on Defendants whose acts had not contributed to the injury, Lord Bingham said:
“I am of opinion that such injustice as may be involved in imposing liability on a duty-breaking employer in these circumstances is heavily outweighed by the injustice of denying redress to a victim. Were the law otherwise, an employer exposing his employee to asbestos dust could obtain complete immunity against mesothelioma (but not asbestosis) claims by employing only those who had previously been exposed to excessive quantities of asbestos dust. Such a result would reflect no credit on the law”.
None of their Lordships could quite bring themselves to spell out precisely what they meant by “policy”, but some key themes appear:
Firstly, there seems to be a clear view that employers who are under a duty to protect their employees from negligent exposure to danger must be restrained from breaching that duty, and that employers who do breach their duty should not be able to escape liability as a result of the Claimant’s problems of proving causation. Lord Bingham was of the view that:
“there is a strong policy argument in favour of compensating those who have suffered grave harm, at the expense of their employers who owed them a duty to protect them against that very harm and failed to do so, when the harm can only have been caused by breach of that duty and when science does not permit the victim accurately to attribute, as between several employers, the precise responsibility for the harm he has suffered … It seems to me, as it did to Lord Wilberforce in McGhee  1 WLR 1 at 7, that ‘the employers should be liable for an injury, squarely within the risk which they created and that they, not the pursuer, should suffer the consequence of the impossibility, foreseeably inherent in the nature of his injury, of segregating the precise consequence of their default'”.
Secondly, their Lordships seemed to consider that either result was going to be unfair to one party or the other, and that it would be better if the unfairness fell on someone who was in some legally recognised way at fault.
Thirdly, one sees operation of the view that unfairness towards an insured party is acceptable because it will be passed on to insurers and, to a lesser degree, to reinsurers and retrocessionaires. None of their Lordships says this expressly, but a commercially aware judge can never quite put this factor out of his mind. It may be said that on no other basis, other than moral censure, could their Lordships have so readily concluded that unfairness to the employers was preferable to unfairness to the Claimants.
Apportionment of Liability
Counsel for the Defendants did not argue that liability should be apportioned. Their Lordships, therefore, had no option but to hold that each Claimant could recover in full from one Defendant. If a future defendant wishes to dispute this, it would have to pursue other potential tortfeasors in a claim for a contribution. For example, Lord Bingham considered that:
“It is a conclusion which follows even if either A or B is not before the court. It was not suggested in argument that C’s entitlement against either A or B should be for any sum less than the full compensation to which C is entitled, although A and B could of course seek contribution against each other or any other employer liable in respect of the same damage in the ordinary way. No argument on apportionment was addressed to the House”.
What would happen if an argument of apportionment is made in a future case therefore remains somewhat of an open question. The Supreme Court of California ruled on a case where the claimant suffered pre-natal injuries from a drug manufactured by a large number of defendants. The Court apportioned damages in accordance with the defendants’ market shares. It is unclear whether this approach will be helpful in the present type of case, not least because the current medical evidence seems to be that multiple exposures to asbestos increase the chances of contracting mesothelioma whereas the existence of additional manufacturers did not increase the risk involved in using the drug.
Overseas Jurisprudence and Academic Comment
Their Lordships took into account both the views of academics, particularly the seminal work on causation by Hart and Honoré, and the laws of various jurisdictions (both ancient and modern).
The Supreme Court of California has considered, in a situation where a claimant cannot prove which wrongdoer has caused his injury, that “a requirement that the burden of proof on that subject be shifted to the defendants becomes manifest”. A similar approach is taken in Canada. Other than Lord Wilberforce’s speech in McGhee, however, no support for this approach exists in the English authorities.
Dutch law is considered to be highly policy-driven. For example, it holds liable to cancer sufferers all those manufacturers of carcinogenic medicines available at the time their mothers had taken such substances.
The German Civil Code deals with the present problem as follows:
“If several persons have caused damage by an unlawful act committed in common each is responsible for the damage. The same rule applies if it cannot be discovered which of several participants has caused the damage by his act”.
Lord Rodger even considered Classical Roman Law, in which many continental laws still find their roots. The Classical decisions, which permitted recovery in similar circumstances to the present case, could not furnish precise guidance on the formulation of any equivalent rule today. The point was made, however, that all these centuries ago considerations of policy led to a departure from what the law would usually require by way of proof of causation.
The implications of Fairchild
There is no doubt that this ruling is going to cost the insurance and reinsurance industries a great deal of money, albeit that many will already have put in place significant reserves before the surprising Court of Appeal judgment.
However, although it is not clear how far their Lordships’ willingness to subvert the normal legal principles on the ground of policy will affect future unrelated cases, it seems unlikely that the initial fears will be realised:
Each of their Lordships’ speeches contained either an express or implied caveat that their reasoning will cease to apply if advances in medical evidence allow claimants to show which employer or employers caused their injuries. However, this limitation will not actually reduce the costs to the insurance industry as a whole; rather, it will simply, in time, put an end to the rough and ready justice of Fairchild and make sure that the “correct” employer (or, in reality, his insurer) foots the bill. In the meantime, each of their Lordships was careful narrowly to circumscribe his ruling, and the majority of the House expressly restricted the application of their reasoning to a carbon copy of the facts in the present set of Appeals.
In the meantime, lawyers and industry alike will await with interest, if not trepidation, the outcome of any future Part 20 claims between multiple defendants for damages to be apportioned between them. As far as mesothelioma itself is concerned, until the hoped-for advances in medical evidence, one can only guess how the courts will address this point.
Whilst noting their Lordships’ caveats, one can only wonder how far the love affair with “common sense” might go. Will it really be confined to cases where medical knowledge is rudimentary, or might the courts be receptive to arguments that a more liberal approach should be taken with all expert or even factual evidence? Medium term legal certainty has been jettisoned in favour of “common sense” and the policy that if someone has to be unfairly penalised in the courts, it may as well be the Big Bad Insurers.