Damage limitation

The Court of Appeal dealt a severe blow to victims of the asbestos-related lung condition known as pleural plaques last month.

The decision was made in Grieves & Others vs FT Everard & Sons. This was a test case brought by 10 men against 10 companies that had employed them. Each had developed pleural plaques: localised areas of thickening around the membrane surrounding the lungs. They are symptomless, have no adverse effect on any bodily function and, being internal, have no effect on appearance.

They are, however, evidence of asbestos exposure, which of itself may lead to an increased risk of developing more serious asbestos-related conditions, such as mesothelioma or lung cancer. The important thing to note, though, is that the presence of pleural plaques does not necessarily mean that the individual is suffering from an asbestos-related disease.

For the past 20 years or so, insurers have paid compensation to those suffering from pleural plaques. Such sums, although vast in the global sense, have been relatively small in terms of payments to individual sufferers. After the first instance decision in Grieves & Others both sides claimed victory - the individuals because the judge held that they could claim damages and the insurers because the judge set a lower benchmark for the level of compensation.

However, this has now been overturned. The Court of Appeal held that the development of pleural plaques was insufficiently significant to constitute damage upon which a claim in negligence could be founded.

The court's reasoning was that to be successful in any claim for negligence, you must have proof of damage, and the damage suffered had to be more than minimal. Pleural plaques do not threaten or lead to other asbestos-related conditions; they do not increase the risk of lung cancer; they are purely evidence of asbestos exposure. The individuals did run a risk of developing asbestos-related disease, but the court said this was not as a result of the pleural plaques but rather exposure to asbestos.

The Court of Appeal considered whether physical changes to the body, negligently caused, were enough to found a claim in negligence if they carried a risk of the individual suffering from a more serious ailment and subsequent anxiety or psychiatric injury.

The court’s reasoning was that to be successful in any claim for negligence, you must have proof of damage, and the damage suffered had to be more than minimal

The answer was that it was not.

There was no duty on an employer to take care not to cause anxiety and, although there had been some cases where it had been found that the defendants ought to have known that they were exposing the claimants to the risk of sustaining psychiatric injury, the same could not be said of the circumstances surrounding this case.

So where does all this leave us? The answer is: still in limbo because the Court of Appeal has given leave to appeal to the House of Lords, a further frustrating wait for those concerned.

The insurers are happy - after all, the decision has saved them an estimated £1bn in compensation. But what about all the money paid out by insurers over the past 20 years?

Insurers are unlikely to seek to claw back payments. Insurers could put forward an argument along the following lines: "We paid out donkey's years ago, and we now know that we were wrong. Can we have the money back please?" This will receive short shrift from a judge. Further, the individual payments made were not huge. Even assuming the policy holder companies are still in business, the insurers will need to dig up all their records to prove what payments were made to whom and when.

This, coupled with the obvious public relations disaster for the insurers in following such a course of action, make it an unlikely outcome. Now we must wait for the final instalment in the House of Lords, which may not be until sometime next year.