LEXIS NEXIS WEBINAR ASBESTOS UPDATE THE SHIFTING SANDS OF CAUSATION

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1 LEXIS NEXIS WEBINAR ASBESTOS UPDATE THE SHIFTING SANDS OF CAUSATION INTRODUCTION: 1. The issue of causation has long been and continues to be a difficult one for industrial disease claims, and, in particular, for asbestos related disease. My title alludes to the fact that over the course of time the test of causation has continuously been modified by the courts and Parliament. The sands of causation continue to shift, and, with regard to lung cancer cases, the water remains distinctly murky. 2. In order properly to understand the current state of the law with regard to causation in both mesothelioma and lung cancer cases it is necessary to look at the basic principles, the background history and the developments which there have been. 3. As you all know, at common law the standard test for determining whether D s breach of duty caused C s loss is the But For test. 4. This test might be considered the gold standard for causation, and requires C to prove that his loss would not have occurred But For D s breach of duty. 5. For the most part the But For test is easily passed in trauma cases, but it poses a problem when the injury complained of is an occupational disease which has developed many years after the tort. MESOTHELIOMA: 6. The law of tort developed to accommodate disease cases so that it was not always necessary for C to prove that D s negligence was the only or main cause of his injury. 1

2 7. Bonnington Castings Ltd v Wardlaw [1956] AC 613 created an exception to the But For test. The House of Lords said that to establish causation it was sufficient for C to show that the breach of duty had materially contributed to his injury. 8. The Bonnington exception is not limited to industrial disease cases and has also been applied in clinical negligence cases. In Bailey v MOD [2008] EWCA Civ 883 the CA confirmed that the Bonnington exception applies to modify the test of causation where medical science cannot establish the probability that but for the tort the injury would not have happened, but can establish that the contribution of the tort was more than negligible. 9. The Bonnington principle was extended in McGhee v National Coal Board [1973] 1 WLR 1. Here the majority of the HL treated creation of a material increase in risk as equivalent to a material contribution to damage. 10. Then in the landmark mesothelioma case of Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22 the HL concluded that where C had been exposed to asbestos during different periods of employment with different employers and where each employer had been in breach of its duty to protect C from the risk of contracting mesothelioma and that risk had eventuated notwithstanding that on the basis of medical science the onset of mesothelioma could not be attributed to any particular wrongful exposure, a modified approach to proof of causation was required as had happened in McGhee. 11. The Fairchild rule allows victims of mesothelioma to establish liability on the basis that the guilty asbestos exposure materially contributed to the risk of the victim contracting the disease as opposed to the Bonnington exception, which requires proof that the guilty exposure has contributed to the occurrence of the injury in fact. 12. The question of the correct approach to the application of Fairchild arose in Barker v Corus (UK) Plc [2006] UKHL 20. The HL held that where more than one person was in breach of duty and might have been responsible for C s mesothelioma, liability should be attributed according to D s relative degree of contribution towards the risk of C contracting mesothelioma, so that the Ds were only severally liable for a share of the damage. 13. Barker survived only 82 days before being effectively reversed by section 3 of the Compensation Act 2006, and now the position of the law on causation for mesothelioma claims is enshrined in section 3. 2

3 14. In terms of what constitutes a material increase in risk, the SC accepted in Sienkiewicz v Grief (UK) Ltd [2011] UKSC 10 that an increase in the risk of developing mesothelioma as a result of occupational exposure to asbestos of 18% over and above background environmental exposure constituted a material increase in risk. 15. If, however, the exposure is de minimis then it would not constitute a material increase in risk. Lord Phillips doubted whether it was possible to define in quantitative terms what amounts to de minimis for this purpose. This is a question for the judge on the particular facts of each case. 16. In the Employers Liability Trigger Litigation [Durham v BAI (Run Off) Ltd [2012] UKSC 14] the SC revisited the question of the combined effect of Fairchild, Barker and the Compensation Act. Here the issue was whether EL insurance policies responded to claims by former employees against their former employers in respect of negligent exposure to asbestos when the employees developed mesothelioma many years later. Quite apart from construing the wording of the relevant insurance policies, it became apparent during the hearing before the SC that the answer also depended upon the correct approach to causation in the claims by the employees against their employers. If the effect of Barker was that the employer was only liable to extent that his negligence contributed to the risk that the employee would develop mesothelioma and was not liable for causing the mesothelioma itself, then the insurance policies would not respond to the claims. If, however, the effect of Fairchild and Barker was that for policy reasons common law accepted a weak or broad view of the requirements of causation in mesothelioma, but D was regarded as having caused the mesothelioma, as opposed to having contributed to the risk of the employee developing mesothelioma, then the insurance policies would respond to the claims. 17. The majority of the SC (4:1) took the view that the injury was mesothelioma not the risk of developing mesothelioma, but by creating the risk of the employee developing mesothelioma in the future the employer is deemed to have caused the mesothelioma if it should develop in the future. 18. Lord Phillips, however, admitted that he had been mistaken in his judgment in Siekiewicz when he held that Fairchild and Barker developed the common law by equating materially increasing the risk of mesothelioma with contributing to the cause of the mesothelioma. In the ELT Litigation Lord Phillips held that Barker created liability only in respect of the risk of the employee developing mesothelioma. Liability for a proportion of the mesothelioma resulted from contribution to the risk that the mesothelioma would be caused and reflected the possibility that D might have caused or contributed to the cause of the disease. 3

4 19. The view of the majority that Fairchild flexes or relaxes the causal requirement to be met in mesothelioma cases, rather than creating a new form of liability for materially increasing a risk was confirmed in the CA judgment in International Energy Group Ltd v Zurich Insurance Plc UK [2013] EWCA Civ 39 handed down on In this Guernsey case the CA followed the majority in Durham, holding that an EL insurer was liable to indemnify the employer for the whole of the damages which the employer had paid out in respect of a former employee s claim for damages for contracting mesothelioma, not just a proportion worked out by reference to the period during which it was covered by the policies for which the insurer was responsible. The CA held that the judge at first instance had erred in holding that the HL had created a new basis of liability in tort in mesothelioma cases, the essence of which was not causing the mesothelioma but the wrongful creation of a risk of contracting mesothelioma, and on that basis the liability of the employer and hence the insurer in each policy year was for the amount of risk which it created that year calculated by reference to the total period of employment. The position was governed by the SC authority in Durham namely that Fairchild had not recognised a new form of liability in tort consisting of increasing the risk of mesothelioma by exposing someone to asbestos. Instead, Fairchild flexed the But For test, whereby for the tortfeasor to have materially increased the risk of contracting mesothelioma was sufficient for it to be held liable. 20. This is where matters currently stand for causation in mesothelioma cases; however, on the SC granted leave to appeal in the International Energy Group case. 21. For now, at least, C has to establish that the tortious asbestos exposure created a material increase in risk of him contracting mesothelioma in the future. If he does so then the tortfeasor is deemed to have caused the mesothelioma should it develop in the future. 22. Anything more than de minimis exposure will constitute a material increase in risk, and what is de minimis is a question of fact to be determined by the judge in each case. LUNG CANCER: 23. Unfortunately so far as LC cases are concerned the sand is still shifting in terms of causation, and it is impossible to state with certainty what the test is, let alone how it will be met in practice. 4

5 24. What makes LC cases so difficult is that although, like mesothelioma, it is an indivisible injury in the sense that it cannot be contracted by degrees (you have either got it or you haven t), unlike mesothelioma, it is capable of being caused by a number of wholly independent agents it could have been caused by asbestos exposure, it could have been caused by smoking or it could have been caused by something else entirely. Exposure to asbestos makes LC more likely, and smoking also makes LC more likely however, of the 2, smoking is a much more powerful promoter. 25. When a victim is exposed to both asbestos and tobacco smoke the effect of the 2 agents is described as synergistic ie one works on the other and the overall risk rises beyond the mere addition of the 2 risks. 26. It is not possible to tell from the structure or nature of a victim s LC what the actual cause of the malignancy was. 27. LC does not fit into any of the causation options which I have already discussed: It does not fit the But For test because LC is indolent, long delayed and multifactorial; It does not fit the Bonnington test of material contribution to injury because LC is not a divisible injury and is multifactorial; and, The Fairchild exception does not apply: Lord Hoffman stated in Barker: I do not think the[fairchild] exception applies when the Claimant suffers lung cancer which may have been caused by exposure to asbestos or some other carcinogenic matter, but may also have been caused by smoking, and it cannot be proved which is more likely to have been the causative agent. 28. Historically causation in LC cases has been proved by a relaxed version of the But For test. 29. The test was could C show that the tortious exposure had more than doubled the risk of him developing the disease. 30. In practical terms C proved a doubling of the risk by showing that he had asbestosis. In the absence of asbestosis C could rely upon other criteria set out in the Helsinki protocols which included assessing fibre burdens and demonstrating cumulative exposure beyond 25 fibre ml years (depending upon the type of fibre exposure being alleged). Evidence of an occupational 5

6 history of 1 year of heavy exposure or 5 10 years of moderate exposure and at least a 10 year time lag between the exposure and the onset of cancer would also suffice. 31. The sands shifted with the case of Sienkiewicz in the SC. As already discussed, this was a mesothelioma case, but the argument being run by D was that even in single exposure mesothelioma cases there was always background exposure, and unless it could be shown that the negligent exposure more than doubled the risk of C contracting mesothelioma, then the Fairchild rule of causation could not be applied. 32. In the CA Smith LJ (para 23) made the following (obiter) observation: it must now be taken that, saving the expression of a different view by the SC, in a case of multiple potential causes a Claimant can demonstrate causation by showing that the tortious exposure has at least doubled the risk arising from the non-tortious cause or causes. 33. This prompted members of the SC to comment (also obiter) on LC cases. 34. Lord Phillips (para 90) said: I see no scope for the application of the doubles the risk test in cases where two agents have operated cumulatively and simultaneously in causing the onset of disease. In such cases the rule in Bonnington applies. Where the disease is indivisible, such as lung cancer, a defendant who has tortiously contributed to the cause of the disease will be liable in full. 35. For Lord Phillips causation in LC cases requires C to satisfy the Bonnington exception by proving contribution to the happening of the disease. 36. At paragraph 169 of her judgment Baroness Hale said that she agreed with Lord Rodger (para 162) that doubling the risk is not an appropriate test of causation in cases to which the Fairchild exception does not apply. 37. Unfortunately, having said what the test is not, neither Lord Rodger nor Baroness Hale ventured to say what it was. 38. Lord Brown ruled out creating any further special rules for causation and stated that save only for mesothelioma cases Claimants should henceforth expect little flexibility from the courts in their approach to causation. He also observed that, notwithstanding the academic focus on the supposedly critical distinction between so called single agent and multiple agent cases, the 6

7 suggestion being that single agent cases more readily lend themselves to special rules of causation than the latter, he found it difficult to recognise the distinction between these categories in some cases. 39. Bringing all of this together, it would seem that, according to the SC the test of causation in LC cases is not doubles the risk and is not Fairchild, but may be either But For or Bonnington. 40. The Australian courts have also been exercised over the same conundrum in the last few years. 41. American Pty v Ellis [HCA] 5 was a decision of the HC of Australia handed down on This was a LC case in which the victim had smoked cigarettes a day for 26 years and was also exposed to asbestos during 2 periods of employment. The central issue in the case was whether it had been shown that it was more probable than not that each Defendant had caused the victim s LC. C s representatives expressly disavowed that the test of causation was material increase in the risk of contracting LC and submitted that the case should be decided by applying the But For test of causation. 42. The focus of much of the expert evidence in the case was epidemiology. 4 experts provided calculations of the relative risk of the victim having contracted LC from smoking and asbestos exposure. All of the experts agreed that the relative risk from smoking was many times higher. The highest probability of the LC being caused by asbestos was 23%, and the risk of the cancer being caused by smoking alone was not less than 67%. The HC emphasised that C must establish causation against each D (paras 10,15,38,40-43 and 68). 43. The HC did not reject the doubles the risk test however, on the facts of this case the test was not satisfied because of the victim s long smoking history. Even taking into account the synergistic effect between smoking and asbestos in causing LC, the experts agreed that the predominant risk was from smoking. 44. The HC rejected the Bonnington test (para 68) on the basis that the issue in Bonnington was whether one source of injurious dust contributed to a gradual accumulation of dust that resulted in disease, whereas in this case the issue was about whether one substance which can cause injury did cause injury. 45. Ultimately the HC ruled against C in the absence of sufficient proof of causation against any of the Ds. 46. And finally to Allianz Australia Ltd v Sim [2012] NSWCA 68. Mr. Sim had many years of asbestos exposure. He developed asbestosis and 7

8 subsequently lung cancer, from which he died in July Mr. Sim s widow commenced proceedings in the Dust Diseases Tribunal against 4 of Mr. Sim s employers or their insurers and the decision was made that the Ds were jointly and severally liable for Mr. Sim s LC. 47. Professor Henderson, a well known expert pathologist, gave evidence that LC was governed by a dose response relationship and that exposures in each of Mr. Sim s employment periods had made a significant and substantial causal contribution to his LC. He promulgated a multi stage model for LC in which each exposure contributes incrementally and cumulatively to the disease outcome. 48. On this basis judgment was entered for the Claimant and the appeal dismissed. 49. The Court of Appeal got round Ellis by saying that in Ellis C had not established on the evidence that asbestos could have been the cause of the victim s LC, so therefore the issue of material contribution did not arise, whereas the evidence in Sim showed not only that the asbestos exposure as a whole had caused Mr. Sim s LC, but also that each exposure was probably causally related to the LC. The issue of material contribution then became relevant to ask had each D before the court materially contributed to the whole? 50. In Sim the Bonnington test of material contribution to the disease was applied and satisfied. 51. As the caselaw demonstrates, so far as LC cases are concerned, the law is a mess and the issue of causation needs re-litigating to provide clarity for practitioners. The problem is that for Cs it is hard to obtain ATE insurance to fight difficult LC cases and Ds don t seem to want to run the risk of an adverse judgment - so the stalemate continues. 52. We know that to establish causation in LC cases it will not be enough to prove that asbestos exposure increased the risk of the victim developing LC. 53. On the back of Sienkiewicz it may also not be enough to prove a doubling of the risk on its own. 54. The presence of asbestosis or application of the Helsinki criteria may simply demonstrate proof of ingestion of a certain amount of asbestos rather than establishing causation. 8

9 55. Cs would be well advised to obtain further and better statistical or epidemiological evidence to persuade the court that the Bonnington test of material contribution to injury or the But For test has been satisfied. Cs may also want to look closely at the type of evidence presented on behalf of C in Sim, particularly the expert evidence of Professor Henderson. 56. On the other hand, Ds may want to pursue the Ellis avenue of argument. 57. Where and when the sands will shift next is anybody s guess, but I would not be at all surprised if for the future the test of causation in LC cases is that C must establish that the LC was caused by asbestos on a But For basis and, in multi exposure cases, that the particular D s exposure made a material contribution to the overall asbestos exposure, and hence causation of the LC. ALISON McCORMICK The Strand, London, WC2R 1BA. T:

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