Legal Watch: Disease. January Issue: 001

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1 Legal Watch: Disease January 2015 Issue: 001

2 Damages for lung cancer claims divisible following Heneghan The recent High Court decision in the case of Heneghan v Manchester Dry Docks Ltd is of great importance to insurers and defendants because it confirms the application of Fairchild and Barker to multi-party asbestos-related lung cancer cases. During the course of his working life Mr James Heneghan was exposed to respirable asbestos fibres and dust. He died of lung cancer and claims were brought against six defendants. The sole issue at trial was whether each defendant was liable for damages in full or for only a portion of the damages. Mr Justice Jay remarked at the beginning of the judgment, One might be forgiven for thinking that the answer to this issue ought to be found in the previous authority, because it must have arisen in the past. As it happens, this issue has not been previously determined. The case therefore gave rise to problems of some difficulty and importance. The court had to consider whether the principles in Fairchild (2002), which apply in mesothelioma cases, also arise in a multi-party lung cancer case. Unusually, because the tables are normally turned the other way, the defendants contended that Fairchild did apply and the claimant contended that it did not. The defendants therefore submitted that the test of causation was whether the employer had materially increased the risk of harm to the claimant. Background The deceased was employed by the six defendants on a sequential basis between 1961 and There were earlier employers who were not sued. Consequent upon the deceased s death, claims were brought against the defendants, under the Law Reform (Miscellaneous Provisions) Act 1934 and the Fatal Accidents Act In this Issue: Damages for lung cancer claims divisible following Heneghan Limitation boast for defendants in noise induced hearing loss claims ABI call for the introduction of fixed fees as the number of noise-induced hearing loss claims increase Irritant induced asthma the potential for new claims Precautions taken by employer acceptable by standards of late 1970s Appeal tracker: International Energy Group Ltd v Zurich Insurance Plc UK Appeal tracker: Collins v Secretary of State for Business Innovation and Skills and another Events Plexus and Greenwoods hold a series of events which are open to interested clients. See below for those being held in the next months: The Major Bodily Injury Group (MBIG) Spring Seminar The Wellcome Collection, London

3 The parties agreed that the deceased s exposure to asbestos over the course of his working life could be quantified and that the total exposed share of those defendants who had been sued was 35.2%. As between the six defendants, the distribution of their respective exposures was also agreed and ranged from 2.5% to 10.1%. Liability was admitted by all six defendants and judgment had been entered against them by the master. Expert evidence Engineering evidence Mr John Raper considered the deceased s levels of exposure to asbestos fibres during his employment with ten employers, over many years. The deceased s aggregate asbestos dose was 133 fibres/ml years. The six defendants cumulative exposure was 46.9 f/ml years yielding the agreed apportionment division of 35.2%. According to the Helsinki criteria, formulated by an international panel of experts in 1997, cumulative exposure of 25 f/ml years is sufficient to infer that lung cancer in any individual case is attributable to asbestos. The criteria has been refined over the years and it is accepted that if exposure involved equal quantities of amphiboles and chrysotile, then cumulative exposure of 40 f/ml is probably necessary to double the risk of lung cancer. Medical evidence Dr Robin Rudd (for the claimant) and Dr John Moore-Gillon (defendant) gave oral evidence. They agreed that given that the deceased was a smoker, the risk of him developing lung cancer at this level of asbestos exposure was more than five times greater than it would have been had he just been a smoker. It was accepted that the overall dose of 133 fibres/ml years was more than enough to double the risk. The medical experts agreed that it was more likely than not that his asbestos exposure was causative rather than his smoking. However, the experts were unable to agree on the main issue before the court. Legal submissions It was common ground that lung cancer is an indivisible injury because its severity does not depend on the asbestos dose. It was also accepted that, if the claimant is able on what may be termed entirely conventional principles to prove some causation of damage against any one of the six defendants, then that defendant is liable to compensate the claimant for the entirety of the injury suffered (Sienkiewicz v Grief (2011)). The claimant submitted that the deceased s exposure with each defendant had materially increased the risk of him developing lung cancer and that the common law recognised a category of case which fell neatly between the conventional approach and the extension in Fairchild. If a case fell within that intermediate category it was sufficient for the claimant to prove, on the balance of probabilities that the risk of injury or damage had been materially increased. The defendant submitted that either the Fairchild exception applied and apportionment ensued, or the claim altogether failed for want of proof. The claimant then argued, supported by the evidence of Dr Rudd, that he was entitled to full recovery against each defendant, on the basis that each had made a material contribution to his cancer. The defendants, supported by the evidence of Dr Moore- Gillon, argued that only contribution to the risk of disease and not to the cause could be proved. Accordingly, the Fairchild principle should apply and liability should therefore be apportioned consistent with the decision in Barker v Corus UK Ltd (2006). It was accepted by the claimant that if this case fell to be accommodated within the exceptional rule laid down in Fairchild, because causation cannot be proved otherwise, then the apportionment rules laid down in Barker must apply. (The Compensation Act 2006 was introduced to reverse the Barker ruling in mesothelioma cases but does not apply to lung cancer cases.) 03

4 If the claimant s case was right, it was common ground that he should receive the sum of 175,000, being the damages in full contemplated in the master s order. However, if the defendants arguments prevailed, it was equally not in dispute that the claimant should receive 61,600, based on the total exposed share of 35.2% of the gross sum. Judgment The Queen s Bench Division, in ordering apportionment, rejected the claimant s submission that the common law had recognised an intermediate category of case which fell between the conventional approach to causation and the principle in Fairchild. There are only two categories of case. The first category embodies the conventional approach. The second entails the application of the principles laid down in Fairchild and subsequent cases decided at the highest level. For the purposes of the first category, proof of damage, in whole or in part, is required; whereas for the purposes of the second category, proof of enhancement of the risk (of damage) is required. The intermediate category did not exist. It is, in fact, the same as the second category. Although causation was a unitary concept, the court considered it convenient to distinguish between two stages of causation, namely, medical causation and defendant attribution. At the first stage, the court considered whether medical causation had been made out. In this case, this involved considering whether the claimant had proved that the deceased s lung cancer had been caused by asbestos dust rather than smoking. At the second stage, the court considered whether causation was proved against each of the defendants. It was over-simplifying matters to state that medical causation had been proved in the present case on the balance of probabilities. It depended on how the question was framed. The claimant had demonstrated on the balance of probabilities that the deceased s lung cancer was not caused by non-occupational factors. However, if the question was re-framed to ask if it had been proved that any of the defendants who were sued caused the deceased s lung cancer, then the answer must be in the negative. The claimant could prove against none of the defendants on conventional grounds despite all being guilty of negligent exposure. The claimant s case was therefore covered by the Fairchild principle and hence Barker. Accordingly, apportionment was the appropriate outcome in the present case and the claimant s recovery was limited to 61,600. Commentary The court therefore clarified that the Fairchild extension applies to multi-party asbestos-related lung cancer claims. Asbestos-related lung cancer is therefore an indivisible condition with divisible damages. The claimant was granted leave to appeal and the hearing will be expedited in view of the ill-health of the deceased s widow. The true impact of this case will be determined on appeal. It is likely that claimants in multi-party lung cancer claims will seek a stay of proceedings in the interim. In the Heneghan case, none of the defendants sued were responsible for more than 50% of the overall exposure. It is arguable that defendants will only be able to seek apportionment of damages in an asbestos related lung cancer claim if their contribution amounts to less than 50%. The High Court suggested that a claimant could recover in full against a defendant who is responsible for more than 51% of the culpable exposure, on the basis that it can be proved that they caused the disease on the balance of probabilities. Whether Barker remains good law is likely to be considered by the Supreme Court in the IEG v Zurich Insurance appeal to be heard this week. Professor Carl Heneghan (Son and Administrator of the Estate of James Leo Heneghan, Deceased) v Manchester Dry Docks Ltd & 5 others [2014] EWHC 4190 (QB) Karen Scott 04

5 Limitation boast for defendants in noise-induced hearing loss claims The case of Platt v BRB (Residuary) Ltd (2014) recently heard in the Court of Appeal re-examined the issue of limitation in the context of a noise-induced hearing loss claim. Background The claimant had worked for the defendant company for 35 years in a noisy environment. He first consulted his GP in relation to problems with his ears in 1982 and made a number of further visits later in the 1980s and 1990s. In 1997, the claimant complained to his GP that he was suffering from hearing loss and tinnitus and he was referred to an ENT surgeon. During a consultation, the claimant was asked whether he had worked in a noisy environment and he replied that he had, although he did not go on to ask and was not told, that he was suffering from noiseinduced hearing loss. In 2010, the claimant read an article about industrial hearing loss and tinnitus which led him to contact solicitors. He subsequently consulted Mr Zeitoun and issued court proceedings in Judgment At first instance, the judge held that the claimant obtained knowledge after reading the article in 2010 and disagreed with the defendant that the claimant obtained constructive knowledge in It was unreasonable to expect the claimant to specifically ask about the cause of his hearing loss and this was too harsh a test. The judge added that if the claimant did have constructive knowledge, he would not have exercised his section 33 discretion as the defendant had suffered prejudice by the delay. knowledge which a person might reasonably be expected to acquire, which must depend on the circumstances of the case. In his leading judgment, Vos LJ referred to Johnson and Adams reiterating the demanding test set down by the Limitation Act which is not to protect those who do not act reasonably in their own interests to obtain and act upon expert advice. The Court of Appeal took the view that it was reasonable to expect the claimant to have asked the ENT surgeon what had caused his hearing loss and tinnitus during the consultation in This was a natural and appropriate question to ask and this was not too harsh a test for constructive knowledge. Judgment was given for the appellant on the basis that the claimant had constructive knowledge more than three years prior to the date proceedings were issued. Commentary In light of this Court of Appeal decision, those defending noise-induced hearing loss claims should seriously consider whether to defend a claim on the basis of limitation where there is reference to hearing loss and/or tinnitus within the claimant s medical records, even when a diagnosis of noiseinduced hearing loss is not made. Howard Platt v BRB (Residuary) Ltd [2014] EWCA Civ 1401 Ramiz Wahid On appeal, the Court of Appeal made a finding that the judge at first instance had not paid enough regard to section 14(3) of the Limitation Act 1980 and the test set out in Whiston v London SHA (2010). In this case, it was held that constructive knowledge should be determined by reference to the 05

6 ABI call for the introduction of fixed fees as the number of noise-induced hearing loss claims increase There has been a lot of publicity about the staggering increase in deafness claims, which have been dubbed by some as the new whiplash claims. The Association of British Insurers (ABI) has classed noiseinduced hearing loss claims as the new cash cow for claimant lawyers following the introduction of fixed legal costs in the claims portal for the settlement of personal injury claims. The ABI is trying to lobby stakeholders to put in place similar disincentives to those implemented in whiplash claims, in the form of fixed fees for claimant lawyers. The ABI commented that for every 1 paid to the claimant for compensation, 3 was paid to the claimant s lawyer. This figure matches our experience. It has been suggested that a solution to combat the rise in claims would be for the Ministry of Justice portal to be made more suitable to deal with disease claims. For example, at present, multi-employer claims cannot be processed through the MOJ portal and claims are therefore coming through as hourly rate claims. Hourly rates are clearly an incentive for claimant solicitors. It remains to be seen whether fixed fees will be implemented as it is argued that the government appears more reluctant to act in deafness claims compared to in whiplash claims. A possible reason may be that there was a direct correlation in damages and costs payable to claimants and motor insurance premiums. However, employers liability premiums impact indirectly on the public and there appears to be little political mileage that can be made. A freedom of information request was made to the Department of Energy & Climate Change (DECC) regarding the number of deafness cases received from former mineworkers. The figures evidence a spike in 2012/13 with 4,082 claims being received. Interestingly the figures reveal that fewer claims were brought in 2013/14 and the first few months of 2014/15 indicate there will be fewer still. Some insurers attribute this to the implementation of the Legal Aid, Sentencing and Punishment of Offenders Act In addition to the concerns in respect of claimant s solicitors costs, there has been concern that a large proportion of claims are fraudulent. Having considered the information received by the DECC, the figures reveal that in 2011/12 only 13.77% of the claims received were paid out compared to 48.23% of claims being paid out in 2014/15 (as at 31/07/2014). A greater number of claims are being paid out which may indicate one of two things: (i) insurers are paying unmeritorious claims to dispose of them due to the high volume of claims being received or (ii) a significant proportion of the claims are genuine. However, these figures are in respect of claims brought against the former employers of the nationalised coal industry only and may therefore not be representative of industry as a whole. Many insurers have stated they have seen a rise in noise-induced hearing loss claims across the board. Further, the ABI reported that in March ,500 notifications for industrial deafness were made to the Compensation Recovery Unit, compared to 1,000 in March However, even these figures do not truly represent the total number of claims as a noise-induced hearing loss claim only needs to be registered with the CRU when hearing loss is 50dB or more in each ear. Commentary Given the above, it would appear that the overall number of noise-induced hearing loss claims has indeed increased. It remains to be seen whether the above calls to address this trend will be actioned as the introduction of fixed fees will be welcomed by insurers and those companies paying out on noise-induced hearing loss claims. Yumna Tamez 06

7 Irritant induced asthma the potential for new claims There has been speculation in recent months over a potential increase in claims by people developing asthma-type symptoms and the possibility of work in certain industries leading to the development of such problems. It is well established that asthma is more common in certain industries, such as pulp or paper mills or with cleaners using disinfectants. These workers are not exposed to any known sensitising agent and so it has been argued that repeated low or moderately elevated exposures may also cause asthma. Recently, some respiratory physicians have proposed that the term Irritant Induced Asthma (IIA) should be extended to those with asthma caused by single or multiple exposures to low or moderately elevated doses of irritants as opposed to Reactive Airways Dysfunction Syndrome (RADS) where there is a single very high dose exposure. A May 2014 literary review Malo, Chan-Yeung and Lemière tackles this particular area and possibly adds weight to the recent shift in the way some experts assess both diagnosis and causation. The paper reviews the diagnosis and management of RADS and IIA and also considers the causes. RADS is described as the development of respiratory symptoms in the minutes or hours after a single accident of inhalation of a high concentration of irritant gas, aerosol or smoke. The initial symptoms are followed by asthma-like symptoms and can persist for a prolonged period. RADS can occur after exposure to a variety of chemicals generated as gas or aerosol or exposure to high levels of particulates. IIA is a more general term to describe an asthmatic syndrome that results from a single or multiple low dose of exposure to irritant products. When only a single high dose exposure has been responsible, the term RADS is used. IIA caused by single or multiple exposures to low doses of irritants has been reported and it has been suggested that IIA also includes the situation where multiple exposures to low concentrations of an irritant have led to persistent asthma-like symptoms such as cough, chest tightness and wheezing. However, it is clearly stated in the recent review that this is less well established. It is also reported that when the intensity of the exposure is less but is of greater duration, symptoms may start after several hours or days rather than within minutes of inhalation which will have the effect of further widening the spectrum of IIA. For several years, claims have been made by employees of pulp or paper mills, those working with isocyanate paints and professional cleaners, although in the past it is has been more difficult for cleaners working with standard domestic products to prove a link between the use of such products and any symptoms they have had. The recent review however suggests that professional cleaning is considered a high-risk occupation for occupational asthma based on recent studies in Europe and in the United States. These studies show that cleaning agents may also cause occupational asthma by a mechanism of sensitisation and that asthmatic symptoms are also associated with the domestic use of cleaning agents. We have been informed in discussion with respiratory medico-legal experts that it is not possible to distinguish a subject who would have developed constitutional asthma irrespective of work exposures, from a subject whose asthma has been caused by low or moderately elevated irritant exposures at work. A subject who had asthma as a child which subsequently resolved, is more likely than not to develop asthma again in later life. It is therefore reasonable to assert that the former asthmatic child would have developed a relapse in their asthma regardless of work exposure. 07

8 However, we are also informed that it would also be reasonable to argue that work exposures were an environmental trigger that brought forward the date of the return of asthma and it may be difficult to prove otherwise. Commentary These recent developments would appear to lower the threshold for certain claimants attempting to prove a causal link between their work and respiratory symptoms. Diagnosis is based on a history of exposure to an irritating agent, the presence of asthma-like symptoms and evidence of reversible airway obstruction. As the onset of symptoms is gradual rather than acute, it will be easier for claimants to explain a lack of attendance at their GP or a failure to report the problem to their employer. In an industry such as cleaning, where the numbers of workers are so high and with claimant s solicitors constantly on the search for new types of claims, there is clearly the potential for a greater number of claims to be brought. The majority of patients with IIA improve over time although many continue to have some respiratory symptoms for at least a year and can have physiological abnormalities such as bronchial hyper reactivity for several years after exposure ceases. Most claims of this kind are likely to be of a relatively low value as relatively minor symptoms are common and exacerbation of a constitutional condition is likely to be claimed. However, this will not always be the case as symptoms last for several years in some people. It is not certain whether the number of asthma claims are likely to increase in the near future but it will be necessary to keep an eye on the different claimant firms we usually deal with, to monitor if they are live to recent developments. It is, however, definitely something to be aware of at the present time. Neil Kochane 08

9 Precautions taken by employer acceptable by standards of late 1970s Marie Georgina McGregor v Genco (FC) Ltd This first instance decision of Mrs Justice Patterson dating back to May 2014, will be of interest to employers and insurers alike, as it casts further light on breach at common law in low-level asbestos exposure cases. Background The facts in the case are reasonably straightforward. The claimant, Marie McGregor was employed at the Lewis department store in Liverpool during the 1970s. Her employer was the British Shoe Corporation Company which operated a concession on the first floor of the store. During 1976 Lewis s underwent a programme to remove and replace the escalators and the entirety of the work was carried out whilst the store remained open for business. It was agreed evidence that the claimant worked in close proximity to both the old staircase being removed and the installation of the new escalator. It was a finding of fact that asbestos insulation boards were removed from the old escalator. New sheets of AIB were also cut to size by power saw and applied to the new escalators as part of the installation process. The claimant s evidence was that the workmen involved in the construction wore facemasks. Judgment The court found that the whole process took between two to three months. Importantly the judge described this to be of short duration. The judge accepted that the process was dusty and the claimant gave clear evidence of dust entering her work area. She was required to dust the stock on approximately three to four occasions each day. A factual dispute arose as to the extent of the physical barrier between the construction works and the claimant s working area. The judge however preferred the defendant s evidence that floor to ceiling timber boarding was in place which was primarily erected as a means of delineating the construction area from the remainder of the store and providing a physical barrier to prevent customers straying into the construction site. Both parties obtained expert liability evidence and both experts agreed that the works produced asbestos dust which, whilst at a higher level than those generally found in buildings, would not on the balance of the probabilities have exceeded the standards set out in technical data note (TDN 13) issued by the HSE in The claimant s case was that the defendant failed to take the appropriate steps to avoid the claimant being exposed in circumstances amounting to negligence. In particular, the claimant asserted that the defendant was under a duty to make enquiries about the risk that the works presented to employees, in light of the employer s understanding of the risk. The judge acknowledged that the outcome turned on whether the risk of personal injury arising from the claimant s exposure to asbestos, ought reasonably to have been foreseen by a careful employer, to the extent that the employer should have taken precautions or at the very least sought advice as to what, if any, precautions he should take. In dismissing the claim however, the judge found that whilst the asbestos dust escaping from the construction works was causative of her mesothelioma, the floor to ceiling barriers erected during construction works would be deemed an adequate protection judged by the standards the day. The judge resisted the temptation to don the rose tinted glasses of hindsight and she acknowledged that the position 09

10 must be considered by the standards operative at the time of the exposure in The judge concluded that there was no negligence on behalf of the defendant and rejected the suggestion that a further duty arose to make enquiries about the risk the work presented to employees given the short duration of the construction works. Commentary The decision is undoubtedly of interest to insurers given the relatively late exposure (1976) and its duration for a period of months as opposed to days or weeks as was the case in recent previous low-level exposure defence successes. Practitioners will note the reference to TDN 13 and it will clearly be of some importance for liability experts to take a view as to whether an individual s exposure exceeded or fell below the published standards. Nevertheless and with each case being entirely fact specific, it is too simplistic to assume that a court will always dismiss a claim for the period when the exposure fell below the published standards. It is questionable whether a different result may have been arrived at, had the claimant been employed by the department store owners rather than the shoe shop concession business within the store. Marie Georgina McGregor v Genco (FC) Ltd [2014] EWHC 1376 (QB) David Jackson 010

11 Appeal tracker: International Energy Group Ltd v Zurich Insurance Plc UK This important case has been re-listed before the Supreme Court during this week, on 27 and 28 January The panel of justices has been increased to seven, from the initial five justices who first heard the appeal in July 2014, indicating the significance of the case. As a brief reminder, this case centres on the interpretation of employers liability policies in a mesothelioma case covering, in particular, the interpretation of sustaining of injury or contracting of disease. The case concerns a claim by Mr Carré for damages in Guernsey, where the Compensation Act 2006 does not apply. (Section 3 of the act effectively reversed the decision in Barker v Corus UK Ltd allowing a claimant in the UK to recover in full against any tortfeasor found to have negligently exposed him to asbestos.) The apportionment rules laid down in Barker therefore apply to mesothelioma claims in Guernsey. In this case, the claimant s employer, IEG, had negligently exposed him to asbestos over a period of 27 years. The employer settled the claim and then sought an indemnity of settlement from the defendant insurer. The employer was insured by Zurich for six years out of the total 27 years of exposure. Zurich refused to provide a full indemnity arguing IEG was only entitled to a proportion based on Zurich s period of cover and offered 6/27ths of IEG s outlay. In the alternative, Zurich submitted that equitable principles required a contribution from IEG for the period it exposed Mr Carré to asbestos but was not insured by Zurich. The Court of Appeal overturned that decision and held that the judge was wrong to find that the insurer s liability under an employers liability policy had restricted the indemnity that the policyholder could claim for damages paid to the employee. The CA relied on Durham v BAI (Run off) Ltd [2012] UKSC 14 (the Trigger litigation) made two months after Cooke J s decision. It held that if an employer was liable to his employee for his employee s mesothelioma following a tortious exposure to asbestos created during an insurance period, then, for the purposes of the insuring clause in the employer s liability policy, the disease was caused within the insurance period. Zurich now seeks to overturn that decision. The decision will have significant implications for the future handling of mesothelioma claims, in particular the sharing of liability between successive EL insurers and/or EL insurers and their solvent policyholders. If the Supreme Court upholds the decision of the Court of Appeal and accepts that Barker has been overturned, this will also have a profound impact on the recent lung cancer case of Heneghan (discussed above). International Energy Group Ltd v Zurich Insurance Plc (UK Branch) [2013] EWCA Civ 39 The issue before the court is whether under the EL policy, the insurer s liability extends to indemnifying the employer for the full damages paid to the claimant or is limited to 6/27ths of the damages, representing only a proportion of the policyholder s outlay based on the period for which the insurer provided cover. At first instance the judge found in favour of Zurich. 011

12 Appeal tracker: Collins v Secretary of State for Business Innovation and Skills and another We covered this case in some detail in our May 2014 edition. In Collins v Secretary of State for Business Innovation & Skills the defendants succeeded with their limitation defence. The claimant, a former dockworker who was exposed to asbestos and diagnosed with terminal cancer 35 years later, had delayed after becoming aware of his cause of action. The court refused to exercise its discretion to extend the time under section 33 of the Limitation Act 1980 to allow his personal injury claim to proceed. His claim had significant weaknesses and the costs of defending it would outweigh the claimant s recoverable loss by a large margin. The Court of Appeal upheld the decision as having been correctly made and in the light of established authorities, gave the true construction of s 33(3) of the Act. We understand that permission to appeal was refused by the Supreme Court on 22 December This therefore remains a useful decision for insurers defending asbestosrelated claims. Collins v Secretary of State for Business Innovation and Skills and another [2014] EWCA Civ 717, Karen Scott 012

13 Contact Us For more information please contact: Karen Scott Knowledge Management Lawyer T: E: Neil Kochane Partner T: E: Ramiz Wahid T: E: Publications If you would like to receive any of the below, please indicating which you would like to receive. Weekly: Legal Watch: Personal Injury Monthly: Legal Watch: Property Risks & Coverage Quarterly: Legal Watch: Counter Fraud Legal Watch: Disease Legal Watch: Health & Safety Legal Watch: Professional Indemnity Yumna Tamez T: E: The information and opinions contained in this document are not intended to be a comprehensive study, nor to provide legal advice, and should not be relied on or treated as a substitute for specific advice concerning individual situations. This document speaks as of its date and does not reflect any changes in law or practice after that date. Plexus Law and Greenwoods Solicitors are trading names of Parabis Law LLP, a Limited Liability Partnership incorporated in England & Wales. Reg No: OC Registered office: 12 Dingwall Road, Croydon, Surrey CR0 2NA. Parabis Law LLP is authorised and regulated by the SRA.

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