Overturn of UK Position on Pleural Plaques
On January 26, 2006, the Court of Appeal handed down a judgment which reversed 20 years of precedents regarding compensation for pleural plaques. By a 2:1 majority, the Court found that pleural plaques are not a compensable condition. The eight appeals in respect of ten claims for personal injury arose from a 2005 judgment by Justice Holland sitting in the Queen's Bench Division (Manchester District Registry) of the High Court.1 Lord Justices Phillips and Longmore found that there is no legal basis for aggregating three separate parts of a claim which, individually could not justify an award of compensation, but together produce sufficient damage to give rise to a claim. The Justices were persuaded by the defendants that there are a number of reasons of policy why it is undesirable that the development of pleural plaques should give rise to a cause of action. They wrote that if pleural plaques give rise to a cause of action:
On discovery of the existence of pleural plaques a claimant will be advised that he should bring a claim in order to protect his position, even if he would not otherwise wish to do so unless and until he developed symptomatic disease.
Bringing legal proceedings is stressful. It will result in the claimant's attention being drawn to all the possible consequences of exposure to asbestos and may well create or augment the anxiety for which compensation will be claimed.
There is a danger that those, such as claims managers, who make a business out of litigation, will encourage workers who have been exposed to asbestos to have CT scans in order to see whether they have pleural plaques for the sole purpose of bringing claims for compensation. Such a practice will tend to create stress and anxiety where none exists.
Some claimants will be tempted to claim a final award, thereby, in effect, gambling, to the possible prejudice of themselves and their families, that they will not contract an asbestos-related disease.
The costs of litigation in cases such as those before us tend to be disproportionate to the damages recoverable.
It is unjust that the right to recover damages should depend upon the fortuity of whether or not the particular claimant has developed pleural plaques.
In the dissenting opinion, Lady Justice Smith dismantled the pro-defendants' opinion with such comments as:
In my judgment, such a tissue change does amount to an injury The presence or absence of symptoms goes only to the question of how serious the injury is The plaques are of the same nature whether they are extensive or limited and, in my view, if extensive plaques are an injury, so are limited ones I cannot accept that a visible tissue change (such as a lesion caused by radiation on the skin) is different in nature from a tissue change which is hidden within the body I would also hold that pleural plaques are a disease
In summary, I would hold that, in cases of pleural plaques such as are found in this group of cases, the claimant's cause of action is complete at the time when the pleural plaques formed because, by that time, he was already subject to appreciable risks of serious conditions arising from the same wrongful act.
Citing the expectations of most people on the Clapham omnibus, she believed that these claimants deserved better: I would hold that the need to do justice to these injured claimants, in accordance with what I believe are the expectations of most reasonable people, should outweigh the policy considerations advanced by the appellants.
Needless to say, the Association of British Insurers (ABI) and their members are delighted with an outcome which could prevent 100,000 court cases, thereby saving the industry £1-£1.4 billion (US$1.79-2.5 bn).2 Journalist Michael Harrison summed up their reaction:
The insurance industry was understandably cock-a-hoop, declaring that the judgment served as a stark warning to ambulance-chasing claims firms who prey on the fears of workers who may have been exposed to asbestos In America this has become big business, which is why in this country the Association of British Insurers was so pleased that the Court of Appeal had put a stop to this latest example of the 'compensation culture'.3
Nick Starling, Director of General Insurance, at the ABI said:
The ABI welcomes the legal clarity this judgment brings. It sets out that medical conditions that have no impact on health are not compensatable This judgment is a stark warning to claims firms who seek to exploit the current compensation system by misleadingly raising expectations of the public.
Norwich Union, which brought this action, is part of the world's sixth largest insurance group and the biggest in the UK; the Group's pre-tax operating profits in 2004 were £2.3 billion, a more than 20% increase on the previous year. Dominic Clayden, Norwich Union's Technical Director, welcomed the judgment, saying he believed it to be a pragmatic result on the issue of compensation being awarded for an asymptomatic condition. It is believed that other insurers which will benefit from this verdict, should it stand, include Zurich Financial Services, Royal & SunAlliance Insurance and Lloyd's of London.
The claimants and their representatives are seriously concerned at the implications of the Appeal Court's decision. The General Secretary of Amicus, the trade union which brought the case, condemned the judgment as dreadful:
(it) harms many of our members who have been exposed in their working lives to asbestos. We believe that people with pleural plaques should be compensated and we will fight on.
Ian McFall, one of the legal team which represented Amicus, reacted:
We're shocked at the result of this ruling and the impact it will now have on thousands of people. Pleural plaques are recognised by medical experts as a sign of irreversible damage to the lining of the lung caused by a history of exposure to asbestos which carries with it an increased risk of malignant disease such as the deadly cancer mesothelioma.
Throughout the appeal, the threat from ambulance-chasing claims farmers was referred to. The spectre of an American-type asbestos claims free-for-all was paraded as a worst case scenario by defendants even though the average UK pleural plaque claimant receives just a few thousand pounds. Media reports published during the case kept the exaggerated role played by claims-generating rogue operators in the UK's burgeoning Compensation Culture Society fresh in the minds of the judges, the legal community and the public.
The pleural plaque judgment is just the latest manifestation of the insurance industry's long-standing campaign to avoid paying claims brought by UK asbestos victims. In 2001, the insurers' defence in the Fairchild case won the backing of the Court of Appeal; had the House of Lords not overturned that decision in 2002, thousands of asbestos cancer victims would have been prevented from taking legal action against negligent employers. Once again the Court of Appeal is siding with asbestos defendants and their insurers; the findings of Lord Justices Phillips and Longmore that the pleural plaque claimants had no cause of action will deny thousands of UK asbestos victims the right to have their conditions recognized.
Nowadays, the British insurance industry is run by individuals with scant regard for the duty owed to those who, through no fault of their own, have been injured. One hundred years ago things were very different; in the aftermath of the San Francisco earthquake, Cuthbert Heath, an underwriter for Lloyd's of London, instructed his local agents to: pay all claims. How does the image of insurers snatching a few thousand pounds out of the hands of claimants reflect on the industry? Not very well. Shame is, I guess, a concept that has become unfamiliar to those in the city of London. I wonder what Cuthbert Heath would have made of this 21st century vendetta against asbestos victims ?
January 27, 2006
2 Asbestos Condition not Compensable: U.K. Court. Reuters. January 26, 2006.
3 Harrison M. A Wrong-Headed Ruling on Asbestos. The Independent. January 27, 2006. p51.