Disease matters. Contents. September edition 6. Editorial. Vivienne Williams Partner, BLM Manchester

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1 Disease matters September edition 6 Contents Mesothelioma claims - further changes expected - p2 Is CO part of a con? - the potential for fraud in carbon monoxide claims p3 Time to review the 2005 vibration regulations? p4 Occupational stress: The Protection from Harassment Act 1997 p6 COSHH (Amendment) Regulations 2003 and 2004 and ongoing developments - A need for clarification p7 Asymptomatic asbestosis, pleural thickening, and pleural placques p8 TUPE: Are you the correct defendant? p9 Psychiatric damages, anxiety and the link to pleural plaques p11 Disease Matters is published by the marketing department of Berrymans Lace Mawer (Castle Chambers, 43 Castle Street, Liverpool L2 9SU) on behalf of the partnership. Printed in England by Patersons Printing Ltd. Berrymans Lace Mawer Editorial Last year was a turbulent and busy year for those engaged in mesothelioma cases. Unsurprisingly we expect asbestos to be a recurring theme going forward. The ramifications following the government intervention after the Barker decision continue. Before long a new protocol for these cases is likely to be in place. The pleural plaques test litigation is due to come to an end, as following the hearing in July, the House of Lords decision is due out in the autumn and eagerly awaited by all concerned. Will this be the end of the story? That remains to be seen. Last year, the case of Bolton MBC v MMI & CU CA [2006] addressed the interpretation of Pl policies in mesothelioma cases. Following on from that we now have test litigation on the interpretation of EL policies. These cases are likely to be heard in It is doubtful that a first instance decision will be the end of the matter and so we can comfortably predict that this issue will remain with us in 12 months time. The problems created by the uncertainty of policy cover make it all the more important to establish the chain of liability where there are transfers of businesses making an understanding of the TUPE legislation critical for employers and their advisers. Other areas remain a source of concern for insurers and policyholders alike. The impact of the Majrowksi decision on stress and harassment claims is still filtering through with the potential for claims against individuals and companies. Despite the focus on asbestos-related claims, claims for Noise-Induced Hearing Loss and Hand-Arm Vibration Syndrome still dominate in terms of the number of claims and resources required to manage them. August saw the launch of our new e-bulletin Disease review. This will provide regular case reviews and commentary on developments as they happen. For further details see page 12 in this edition of Disease Matters. Vivienne Williams Partner, BLM Manchester

2 Mesothelioma claims - further changes expected In the year since the implementation of the Compensation Act 2006, a number of other important changes have emerged regarding mesothelioma claims. The FSCS rules have been reformed to allow it to make contributions to other defendants. A possible pre-action protocol is being developed, and for the first time certain benefit payments will be brought within the scope of compensation recovery. So further reform to the handling of these claims remains firmly on the agenda for late 2007 and Joint and several liability Following the judgment in Barker v Corus on 3 May 2006, the government acted very quickly to overturn the House of Lords ruling. It introduced section 3 of the Compensation Act 2006, which restores joint and several liability for mesothelioma. That section came into force on 25 July 2006 and was made retrospective to the date of the Barker case - meaning that any mesothelioma claims concluded over that period were susceptible to being re-opened and re-assessed on the statutory joint and several basis. 'Pay and be paid' - FSCS contributions Reforms to the Financial Services Compensation Scheme (FSCS) were also made after consultation in autumn last year. The FSCS is responsible for making payments on behalf of insolvent insurers and its involvement in claims is limited by statute and regulations. These had prohibited the FSCS from making payments to anyone other than a claimant. Increasingly, it was recognised that allowing the FSCS to pay contributions, on the usual 'pay and be paid' basis, to other defendants and insurers involved in a mesothelioma claim would speed up cases in which the FSCS was involved. The necessary changes were introduced by The Compensation Act 2006 (Contribution for Mesothelioma Claims) Regulations 2006 (SI 3259/2006), effective from 6 December As with the Act itself, these provisions were similarly backdated to claims settled on or after 3 May A mesothelioma protocol? Several insurers and politicians noted that a mesothelioma protocol could be an asset in speeding up claims settlement. In addition, it could aid the systematic exchange of information between claimants and defendants and their insurers. Hence, in late 2006, detailed discussions took place about a draft pre-action protocol for mesothelioma claims. The working draft was based heavily on the CPR Pre-Action Protocol for Disease and Illness Claims. The proposed approach involves a 'notification stage' to insurers before a formal letter of claim is issued, shorter response times for insurers and also provides for interim payments to be advanced. It is understood that the protocol is still in its draft stage and is with central government officials for consideration and very probably further consultation when appropriate. Whilst there is widespread in principle support for a mesothelioma protocol, the proliferation of pre-action protocols has been drawn to the attention of the Civil Justice Council, which issued a consultation paper in spring 2007: proposing to recommend the introduction of a Consolidated Pre-Action Protocol that will reduce the present nine to one protocol by incorporating the core steps and guidance common to all of the protocols but with subject specific appendices Further developments here are expected in the final quarter of Benefit recovery - mesothelioma summit In March 2007, The Department for Work & Pensions held a summit for stakeholders on mesothelioma claims issues. The Secretary of State used the occasion to announce plans to legislate to extend the application of payments under the Pneumoconiosis Act 1979 in mesothelioma cases. The intention is that the amounts will be increased significantly - perhaps up to as much as 40,000 per case - and that entitlement will no longer be limited to occupational cases. Ministers intend that these payments will be made very quickly - within six weeks of the application being made. The increased costs are to be funded by a change in legislation to make the payments recoverable, using the CRU process, from any eventual compensator. The relevant provisions are being brought forward in Part 4 of the Child Maintenance and Other Payments Bill. This is currently before Parliament and is likely to complete its legislative stages before the year end. Defendants should note that the recovery of 1979 Act payments envisaged by the Bill could adversely impact on their ability, arising from the decision in Ballantine v Newalls Insulation (2001), to set-off the statutory payment against the final award. Clinical support and services On 27 February Action Mesothelioma Day - the Department of Health published a mesothelioma framework to provide advice to the NHS on how to organise services for patients with the disease. At the same time, the DWP issued a leaflet containing help and advice for people with mesothelioma, providing outline information on both the potential benefits available and also the possibility of making a civil claim. The foreword to the DH framework notes that: It is imperative that mesothelioma patients should be diagnosed as early as possible, offered radical treatment where this is appropriate, have access to optimal palliative interventions and care and be offered appropriate information and advice including on financial benefits and possible compensation. page 2 Berrymans Lace Mawer

3 More recently in July 2007, the National Institute for Clinical Excellence approved the use throughout the NHS of the chemotherapy drug Alimta in mesothelioma cases. The drug is not curative, but it has improved survival periods for a number of patients. NICE's decision has been widely welcomed by mesothelioma support groups. Concluding remarks A year on from Barker v Corus and the Compensation Act, mesothelioma claims issues remain a topical matter. In addition to the developments noted above, the recent Ministry of Justice consultation on damages sought views on the difficulty experienced by mesothelioma claimants in deciding whether to pursue a claim to secure compensation before death, or to postpone the claim to enable their dependants to bring a claim under the Fatal Accident Act. BLM will continue to participate fully in the various debates and processes, providing updates on the issues and key developments as and when they occur. Alistair Kinley Head of policy development, BLM London Is CO part of a con? - the potential for fraud in carbon monoxide exposure claims What is it that you cannot see, hear or touch but can fill a room? You will probably be expecting this to be followed by an amusing punchline, but the answer is Carbon Monoxide (CO) and it is no joke. Accidental CO exposure is estimated to cause at least 50 deaths each year in the UK alone. CO is the product of the incomplete combustion of organic compounds such as petrol, charcoal or natural or petroleum gas. The most common sources of CO in everyday life are gas appliances, central heating systems and vehicle exhausts. CO is colourless, odourless, tasteless and lethal. It is hardly surprising that it is sometimes known as 'the silent killer'. What is perhaps surprising is that, given its capacity for causing death, CO can form the basis of fraudulent claims. While inhaling high levels of CO leaves the body's cells and organs starved of the oxygen required to allow them to function properly, mild CO exposure on the other hand may simply cause headaches, nausea, shortness of breath, dizziness, fatigue, drowsiness, vomiting, chest or stomach pains, a sore throat or a dry cough. These symptoms can mimic many common ailments and may be easily mistaken for a viral cold infection or flu. Of course, the reverse potentially applies. Some recent experiences illustrate the point. A company installed cavity wall insulation in a number of housing association properties. A family occupying one of these properties claimed to have suffered the classic symptoms of mild CO poisoning for a period of 21 months after the cavity wall insulation was installed because of a blockage in an air vent allegedly causing a build up of CO. The damages claimed included a sum of almost 200 for two packets of paracetamol each week for the entire 21 months. The claim could be genuine but could just as easily be fraudulent. The blockage was easily faked, the symptoms they complained of were exactly as can be found described on a number of easily located websites and the alleged symptoms had never been independently verified. In another example, an employee claimed that his works van had a defective exhaust which caused CO to enter the cab. However, it was only following a service of the van that CO poisoning was suggested. On the face of it this is supported by the evidence of two experts appointed by the claimant who have accepted his alleged symptoms and causation. In examples such as these what is the independent verification for the causation of the alleged symptoms? A detailed analysis of contemporaneous records and information will often reveal a lack of contemporaneous complaint, or alternative explanations for the symptoms and inconsistencies. In Phillips v Caerphilly County Council [November 11, 2003], the legally aided claimant alleged CO exposure due to fault on the part of the council, his landlord. Liability was denied and proceedings followed. The claimant's GP records subsequently revealed that it was unlikely that the claimant had suffered CO Berrymans Lace Mawer page 3

4 poisoning. The claim was not pursued and the defendant sought and obtained a wasted costs order against the claimant's solicitors on the basis that they had received the GP records more than two years before proceedings were issued but failed to acknowledge the difficulty in respect of causation. The claimant in the case of Mackenzie v Aberdeen City Council [July 23, 2002] brought an action against his local authority for alleged CO poisoning from faulty gas central heating. He contended that he had suffered headaches and nausea as a consequence. The claimant's evidence was of questionable credibility and the evidence of the local authority's medical expert was preferred to that of the claimant's expert, with the result that the claim was dismissed. If you are faced with a questionable CO exposure claim, it is advisable to: obtain a detailed account from the claimant of his alleged symptoms. carefully consider the alleged cause of the poisoning with a particular view to ascertaining if any defect alleged may have been fabricated: expert evidence may be appropriate for this. carefully review the claimant's relevant medical records, paying particular attention to any visits made by the claimant to his GP or hospital during the alleged period of exposure. prepare a detailed chronology of events to ascertain whether there is any temporal association with symptoms and reported problems with appliances etc. Time to review the 2005 vibration regulations? Although there had been guidance in place for employers, until recently there had been no formal specific statutory regulation for vibration. The Control of Vibration Regulations came into force 6 July Prior to this, guidance came from: Vibration White Finger In Industry, Taylor & Pelmear; British Standard Draft for Development, DD43; Guide to Measurement and Evaluation of Human Exposure to Vibration Transmitted to the hand, British Standard 6842; Health & Safety Executive Guidance - Hand-Arm Vibration, HS(G) 88, If exposure was above 2.8 m/s 2 then employers were required to provide information and warnings, health surveillance and take preventative/precautionary measurers to reduce the level of exposure. Any exposure less than 1 m/s 2 presents no foreseeable risk of injury and employers would not be required to take any steps. For exposure between 1 m/s 2 and 2.8 m/s 2 the picture is not clear, though a court is likely to find that exposure above 1 m/s 2 would carry a foreseeable risk of injury. The closer the levels got to 2.8 m/s 2 then information should be given with health surveillance, at least. If surveillance picked up symptoms then a duty may be inferred for employers to reduce the exposure further despite the exposure being below the action level. Exposure to vibration could also be caught by a number of the 'six pack' regulations (for exposure after 1 January 1993) including monitoring employees, providing health surveillance generally and equipment maintenance, but none specifically refer to vibration exposure. instruct a medical expert who is prepared to take a forensic approach rather than to simply accept the claimant's allegations at face value. This is key to the defence of such claims. ensure the expert reviews any blood tests undertaken. in cases where the alleged exposure is recent, consider with the medical expert whether blood tests should be undertaken, as this may be the best way to make a positive diagnosis. So why was formal regulation needed? The HSE estimated that approximately five million workers are exposed to vibration and of these, nearly two million are exposed to potentially harmful levels at which a clear risk of injury arose and this needed to be addressed. The major changes implemented by the Regulations are the new exposure limits. For Hand-Arm Vibration Syndrome (HAVS) specifically: CO claims can be expensive to defend, expert evidence is critical but often cases are capable of being challenged on causation grounds due to the ease with which common ailments can be confused with the symptoms of CO poisoning. This misattribution can be genuine but those dealing with such claims also need to be aware of the potential for such claims to be fabricated. Simon Morrow Partner, BLM Manchester An 8 hour daily Exposure Limit Value (ELV) of 5 m/s 2. A new 8 hour daily Exposure Action Level Value (EAL) of 2.5 m/s 2. An operative must not be exposed to vibration in excess of the ELV in any single day. The Regulations also introduced the new concept of Whole Body Vibration (WBV). The limits are: An 8 hour daily Exposure Limit Value (ELV) of 1.15 m/s 2. An 8 hour daily Exposure Action Level Value (EAL) of 0.5 m/s 2. page 4 Berrymans Lace Mawer

5 Effectively, the Regulations set a general duty to eliminate/reduce exposure to as a low a level as is reasonably practicable. This can be done by: Risk assessments Information Warnings Health surveillance Monitoring levels/personnel Tool selection Tool maintenance and regular review of all. Why bother? The HSE believes that if employers comply with the Regulations it may be possible to eliminate any new incidents of HAVS by It may also stop employees progressing to the advanced stages of the disease. They anticipate this can be done by the adoption of simple non-technical and common sense measures. The reduction of the EAL from 2.8 m/s 2 to 2.5 m/s 2 is 10% at face value, but in fact it equates to a reduction of 37.5% due to the new method of calculating vibration levels under the Regulations. 2.5 m/s 2 therefore represents a much more stringent action level. employees who are at a high risk ie above the ELV, and guidance on undertaking a suitable assessment to identify who is likely to be at risk. It should also be noted that although the Regulations have reduced significantly the 'action level'. There is no consideration of a 'safe level of exposure'. Any level of vibration therefore carries a foreseeable risk of injury and not just when levels are above 1 m/s 2. The Regulations included transitional periods that are coming to an end: New equipment provided to employees after 6 July immediate application. Equipment provided before 6 July compliance deferred to 6 July Second-hand/hired-in equipment provided after 6 July 2007 but used by other workers before that date - deferred to 6 July 2010 (this proviso is not specifically stated in the Regulations but appears in the guidance). It should not be forgotten that the deferrals apply only if it is not reasonably practicable to comply with the exposure limit (not the action value) beforehand. The reasoning was to allow all employers at least until July 2007 to provide equipment that complies with the new limit value. Other provision within the Regulations, such as risk assessment/other control measurers/health surveillance and information, instruction and training were not subject to deferral and must be complied with now. The inclusion of WBV in the Regulations means employers also need to consider more than just the historical heavy industry base for HAVS. WBV will be relevant to drivers and operators of off road machinery and in construction/agriculture as opposed to road going vehicles. This is a potential new fertile area for claims and cannot be ignored. The HSE estimates that between 32,000-52,000 cases of back pain per annum are caused/exacerbated by regular exposure to WBV which arises in 1.3 million vehicle drivers. Whether or not industries are or will comply with the new duties is yet to be seen, but for the near future, vibration claims will continue. Employers should be conscious of the need to take action to prevent excessive exposure to vibration to avoid a breach of these stringent Regulations. Nisha Patel Solicitor, BLM Liverpool Neil Wells Solicitor, BLM Liverpool The HSE has also identified the jobs in industries which are most likely to involve HAVS, and also those tools and equipment which could cause injury. It has also provided literature identifying those Berrymans Lace Mawer page 5

6 Occupational stress: The Protection from Harassment Act 1997 The crucial legislative provisions dealing with harassment are found in the Protection from Harassment Act It created two criminal offences (section 2 - pursuing a course of conduct; and section 4 - causing a person to feel fear as a result of pursuing that course of conduct) and also allows civil courts to award damages and make injunctions in harassment cases (section 3). Though it was passed primarily because of concern about 'stalking', the wording of the Act allows it to be used to cover other types of harassment. Prior to the introduction of the Act, employees often tolerated behaviour towards them that, otherwise, they may have found offensive or hurtful; and other than leaving their employment and bringing a constructive dismissal claim, there was no recourse against the wrongdoer. In the workplace situation, the main benefit of the Act is for employees who feel that they have been subject to certain conduct (often bullying) from other employees, which they feel is inappropriate. Following the decision of Majrowski v Guy's and St Thomas' Hospital Trust an employer can be vicariously liable for the employee's actions if they are sufficiently connected with the employment. The Act is often now relied upon in stress at work claims. Tackling bullying or harassment is a substantial challenge for employers. Recent cases have highlighted the financial penalties employers face where they allow poor management practices to develop. An example is Helen Green v Deutsche Bank. Ms Green, who worked as a company secretary assistant at Deutsche Bank, said that the campaign of harassment she endured at the hands of her co-workers had driven her to the point of a mental breakdown. She worked at the firm for four years until October 2001, and said that she suffered psychiatric injury because of 'offensive, abusive, intimidating, denigrating, bullying, humiliating, patronising, infantile and insulting words and behaviour'. She had a nervous breakdown in November 2000 and resumed full-time work the following April but had a relapse in October 2001 and never returned. She argued that the bank should have done something to stop the colleague harassing her. Mr Justice Owen sitting at the High Court in London awarded 828,000 which included 640,000 for future loss of earnings, and ordered the bank to pay legal costs. So, what should an employer do to avoid or minimise the likelihood of facing one of these claims? Firstly, the employer needs to understand the Act. The Act provides that a person must not: Pursue a course of conduct (which must occur on at least two occasions) which: - may involve offensive, bullying, intimidating, malicious or insulting behaviour (and may include behaviour such as joke remarks etc) - amounts to harassment of another. (Harassment is not defined in the Act but is wide enough to include causing anxiety and distress) - he knows or ought reasonably to know amounts to harassment of another. Secondly the employer needs to be proactive in preventing bullying and harassment. Positive action must be taken to eliminate employee behaviour of a kind that could cause distress and anxiety to others in the workplace. Even a responsible employer who takes all possible precautionary measures may find that one of it's employees bullies another. If this occurs, the employer needs to take fast, effective and corrective action to ensure that the behaviour does not escalate into harassment. Although this refers to all employees, particular attention should be paid to employees who are known to be vulnerable. Realistically the very least an employer ought to do is put in place policies stressing that bullying and harassment will not be tolerated. The policies should be detailed enough to set out the consequences of such behaviour, namely that the perpetrator may be subject to disciplinary action up to and including dismissal. The employer must ensure that the policy is effectively communicated to the whole workforce. Simply introducing a policy is not sufficient; it must be consistently enforced and reviewed. Complaints need to be investigated thoroughly and the culprit(s) need to be dealt with appropriately. This could involve suspension pending investigation or the removal to another part of the workplace of the offender. After the introduction of the Act concerns were expressed that unmerited harassment claims would be brought by disgruntled current or ex-employees simply to cause inconvenience to employers. Fortunately, the House of Lords in Majrowski pointed out that awards for damages under the Act will normally be modest. Further, the Law Lords stated that the courts themselves should be able to separate out weak claims early in the proceedings and that irritations, annoyance and even an amount of upset, arise in everyone's day to day dealings with other people and do not give rise to a valid claim. The courts will need to realise that it is for them to draw the boundary between conduct which is unattractive, or even unreasonable on the one hand, but which will not attract liability under the Act, and conduct which will attract liability as oppressive and unacceptable on the other. Julie Byrne Legal executive, BLM Liverpool page 6 Berrymans Lace Mawer

7 COSHH (Amendment) Regulations 2003 and 2004 and ongoing developments - A need for clarification The COSHH Regulations came into force in October 1988 and have been subject to many changes. The 2002 regulations are the current ones in force, and these were amended in 2003 and The aim of the COSHH Regulations is straightforward - to protect employees from exposure to hazardous substances in the workplace. Practical implementation is however, less easy and despite the time that has elapsed since their introduction, they frequently cause problems. The 2003 amendments Amendments came into force in October 2003 requiring those using substances that may cause genetic damage (classified by the EU as category 1 and 2 mutagens) to operate the same control measures as for carcinogens. This incorporates part of the EC's 2nd amendment to the 1990 Carcinogen Directive. In practice, this only affected one substance, triglycidyl isocyanurate (TGIC). The status of 17 dioxins (complex mixture of chemicals caused by burning organic matter containing chlorine) were also defined as carcinogens due to concern regarding their use. The 2004 amendments Major changes occurred in January and April A new Occupational Exposure Limit (OEL) system and approach to adequate control was introduced. The aim was to improve occupational health and safety in accordance with the HSC's revitalising health and safety strategy and to provide good practical advice on how to control exposure, as many employers did not understand the old system. The amendments introduced a new Workplace Exposure Limit (WEL) in place of Occupational Exposure Standards (OESs) and Maximum Exposure Limits (MELs). The levels of the chemical in the workplace air must not exceed this and it is averaged over a reference period of eight hours (long term) and 15 minutes (short term). Substances with WELs are listed in the HSE document EH40/2005. Under Regulation 7, every employer shall ensure that exposure to hazardous substances is either prevented or if this is not reasonably practicable, adequately controlled. Whilst adequate control remains a question of fact to be determined by the court, the amendments provide guidance in defining 'adequate'. They introduce principles of good practice set out in Schedule 2A of the Regulations. The amendments state that exposure to hazardous substances will only now be considered adequate if the principles of good practice are applied and any WEL agreed for that substance is not exceeded. The principles include designing and operating processes and activities to minimise omissions, and the release and spread of hazardous substances; to control exposure by measures that are proportionate to the health risk; to review measures regularly and to train employees on the hazards. If the principles are put into practice correctly, the amount of chemicals should be below the WEL and in proportion to the degree of concern as to the chemicals' harm. A further requirement introduced applies to substances that may cause cancer, heritable genetic damage or asthma. In these cases, exposure should be reduced As Low As is Reasonably Practicable (ALARP). The HSE has produced COSHH Essentials, available on the internet, which provides practical advice on how to control exposure for each chemical with a WEL. Useful advice is also Berrymans Lace Mawer page 7

8 provided in the COSHH ACOP and the HSE has issued CHANS for a number of substances (Chemical Hazard Alert Notices). Following the controversial decision of the Court of Appeal in 2002 in Dugmore v Swansea NHS Trust (2002 EWCA Civ 1689), strict liability still applies and forseeability of risk is irrelevant. The amendments also implemented the EC directive (26 th amendment of the Marketing and Use Directive) and the supply or use of cement or products containing cement which have a chromium VI concentration of more than two parts per million is prohibited to help prevent allergic contact to dermatitis. Ongoing developments under COSHH The HSE's Disease Reduction Programme aims to reduce incidents of work related ill-health caused by chemicals and in particular, the respiratory and skin disease projects aim to achieve a 10% decrease in the incidents of dermatitis and occupational asthma by 2008 compared with 2003/04. In accordance with this and the overall aim of the Regulations, the HSE will carry on producing guidance and good practice studies and the COSHH Essentials sheets for the service and retail sectors were updated in October WELs will continue to be set. The WEL for respirable crystalline silica came into force on 1 October 2006 reducing the existing limits. The second Indicative Occupational Exposure Limit Values (IOELV) directive lists 33 substances and these will be implemented by 1 October 2007 although some of the substances already have approved WELs. The EH40 was to be updated annually and, whilst a new publication was expected in 2006, as only 20 amendments were necessary, the HSE is shortly producing a sheet detailing the amendments to be inserted in the current EH40. The Regulations have also now been relied upon in MRSA claims, as it is a biological agent. The HSE advise that they do not apply, as the risk from exposure is not work-related. However, it is being argued that if it is proved that MRSA has been acquired in hospital, it falls within the Regulations. The courts have not yet addressed this issue. The future New technologies and scientific advances will result in new occupational health and safety hazards as new substances and work processes are developed and existing substances and processes are deemed unsafe. Employers are therefore required to adapt to an ever changing and challenging arena although the amendments should assist in clarifying how best to control exposure so as to comply with the Regulations. Elizabeth Keane Solicitor, BLM Manchester Asymptomatic asbestosis, pleural thickening, and pleural plaques Owen: The shape of things to come? In the case of Rothwell v Chemical and Insulating Company Ltd and Another (and consolidated cases) [2006] EWCA Civ 27 the Court of Appeal addressed whether asymptomatic pleural plaques should be compensatable. By majority, it was established that asymptomatic pleural plaques will not found a cause of action, even when aggregated with anxiety. The decision is currently on appeal to the House of Lords, and judgment is expected in late Rothwell did not expressly deal with the issue of whether asymptomatic asbestosis and/or pleural thickening, in conjunction with pleural plaques would be actionable. This issue was addressed by His Honour Judge Steven Stewart in Terwyn Owen v Esso Exploration and Production UK Limited and Hopol Limited (in Liquidation) [2006]. His judgment addressed whether the asymptomatic conditions of pleural plaques, diffuse pleural thickening, and asbestosis can found a cause of action in negligence when aggregated, and also when further aggregated with anxiety. The facts The claimant, Mr Owen was a 60 year old former pipe-fitter and marine engineer who had been exposed to asbestos in the 1960s whilst working for both defendants. As a consequence of those asbestos exposures the claimant went on to develop pleural plaques, diffuse pleural thickening, and asbestosis. Causation was not in dispute. It was common ground between the parties' respective medical experts that these three conditions were wholly asymptomatic. The asbestosis was not evident on x-ray but was seen on CT scanning. The claimant faced a 10% to 20% chance that his diffuse pleural thickening would progress to cause 5% to 10% disability. He faced a 10% to 20% chance that his asbestosis would progress, and such progression would result in a 5% to 10% worsening disability every five to ten years. The claimant sought immediate damages for the asymptomatic conditions of asbestosis, diffuse pleural thickening, and pleural plaques and for the anxiety he had experienced as a result. The claimant also sought provisional damages for his risk of developing mesothelioma and/or lung cancer, and there was a consensus that he should be able to return for further damages if he ever deteriorated to develop a disability of 20% or more. The material issue HHJ Stewart identified the material issue before the court of whether the claimant's asymptomatic asbestosis, diffuse pleural thickening, and pleural plaques could cumulatively amount to an actionable injury. page 8 Berrymans Lace Mawer

9 Submissions The claimant sought to distinguish his own condition from the pleural plaques present in the claimants in Rothwell - his combination of asymptomatic asbestosis, pleural thickening, and pleural plaques amounted to an injury and was sufficiently serious to be actionable. He submitted that although asymptomatic, these conditions do impair lung function because they involve fibrosis. He argued that due to the spare capacity of the lungs the condition must be quite extensive before causing actual disability. The claimant also submitted that he had a real risk of his asbestosis and/or pleural thickening progressing to become symptomatic. Moreover the case was indistinguishable from that of Cartledge v Jopling [1963] AC 78 where the claimant had asymptomatic silicosis for which he recovered damages. The defendant's key submission was that Rothwell is authority for the proposition that the claimant's asymptomatic conditions should not sound in damages, and that where changes in the body are insufficient to found a cause of action, then the risk of and fear of future injury should not be aggregated so as to convert those changes into an actionable injury. Comments The Owen case is a thoughtful examination of Rothwell and how it may be interpreted in the context of the potentially more serious conditions of pleural thickening and asbestosis when they are asymptomatic. However, it is notable that HHJ Stewart made it clear that he did not consider that asymptomatic asbestosis and/or pleural thickening could never give rise to a cause of action. If the claimant in this case had proved a significant effect on his lung capacity reserves or lung tissue elasticity, then he acknowledged that he may have decided differently. Claimants solicitors are already raising these arguments. Barbara Hatton Associate, BLM London The decision HHJ Stewart observed that the claimant had not proved that his asymptomatic pleural thickening and/or asbestosis had actually affected the reserve capacity of his lungs to any degree. He distinguished the case of Cartledge where there had been evidence of an advanced injury, and the extent of lung scarring was sufficient to have appreciably diminished the elasticity of the lungs, and deprived them of their reserve capacity. The claimant had not proven anything more than asymptomatic fibrosis which may possibly (but not proven on the balance of probabilities) have affected his reserve capacity. Given that the claimant had not proved any significant effect on the elasticity or functioning of his lung tissue, he concluded that the claimant had not proved an actionable injury. HHJ Stewart went on to consider whether the real risk that the claimant's asbestosis and pleural thickening might progress to symptomatic (actionable) conditions could be aggregated with a non-actionable injury in order to found a cause of action. HHJ Stewart was bound by the authority of Rothwell and he concluded that a claimant cannot aggregate future risks with a non-actionable injury in this way. HHJ Stewart considered whether he should take into account that in addition to pleural thickening and asbestosis, the claimant also had pleural plaques and anxiety. He did not accept this submission noting that the existence of pleural plaques makes no difference to the claimant's pleural thickening and asbestosis, and anxiety is not by itself sufficient to constitute damage and cannot be accumulated with a physical condition to serve as sufficient damage. TUPE: Are you the correct defendant? An employer may be liable for injury sustained at a time when it was not the employer of the person injured. Such transfers of liability occur principally by virtue of the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE) which apply to transfers of undertakings taking place on or after 1 May The Regulations were enlarged from 30 August 1993 to include non-commercial ventures. TUPE has now been replaced by the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE 2006) which apply to transfers of undertakings taking place on or after 6 April Although TUPE 2006 brought about number of changes Berrymans Lace Mawer page 9

10 (incorporating with effect from 4 May 2006 'service provision changes' eg contracted out office cleaning being re-assigned on re-tendering or brought in-house) many of the basic principles set out in the original Regulations remain the same. The Regulations apply when there is a transfer of all or part of an undertaking from one business to another. The question 'what is a relevant transfer?' has in practice given rise to much case law. It does not for example apply to the mere transfer of an asset eg fixtures and fittings with no transfer of goodwill or to the change of control of a company by ordinary share dealing. The decisive criterion for establishing the existence of a transfer is whether the entity before the transfer broadly retains its identity afterwards. It is necessary to consider all the facts characterising the transaction in question, including the type of business, whether the tangible assets, such as buildings, are transferred, whether essential staff are taken over by the new employer, whether its customers are transferred, the degree of similarity between the activities carried on before and after the transfer, and the period (if any) for which those activities are suspended. The Regulations only apply to those employees who were employed immediately before the transfer or would have been so employed but for the transfer. The effect of a transfer is that the contracts of employment of the employees, along with all the rights, powers, duties and liabilities of the old employer under or 'in connection with' such contracts of employment pass automatically to the new employer (Regulation 4). The courts have held that the term 'in connection with' a contract of employment is wide enough to apply to liabilities in tort. In Bernadone v Pall Mall, Martin v Lancashire County Council [2000] the Court of Appeal held that employers' tortious liabilities for personal injuries to their employees arose out of the relationship of employer and employee and hence were liabilities 'in connection with' contracts of employment. In addition the court agreed that liabilities for breach of statute and regulations could also transfer. In one of the cases the claimant sued for breach of the Occupiers Liability Act The argument that because such a liability was imposed on occupiers not employers, it should not transfer, was rejected. The court agreed that it was transferred as, on the pleaded facts, the duty had 'a sufficient connection with the contract of employment'. The same conclusion is likely to be reached with regard to alleged breaches of duty of the health and safety regulations. The effect of the Regulations is that a transferee may be left paying for historical acts which were not its fault and for which it has not budgeted. Contracts made between transferors and transferees may cater for such contingencies and provide for an indemnity. The court has found that where the transferor had an employers' liability insurance policy, the employer's right to an indemnity under that policy in respect of a liability to an employee is also under the Regulations transferred to the transferee. The rationale behind this (as set out in Bernadone) is that the transferor's insurers have received the premium and should not be allowed to use the Regulations to avoid the liability. This is all very well in theory, however, in many cases transferees are still left paying for the claim. For example in many disease claims, the exposure may be many years in the past and a contractual indemnity may be worthless due to the insolvency of the transferor or the contract has been lost or destroyed. In addition it may be that insurance cover can not be located or the transferor was exempt from the obligation to provide employers' compulsory liability insurance. This last scenario has now been dealt with in TUPE In relation to transfers since 6 April 2006 where the transferee is exempt from providing employer's compulsory liability insurance, the transferor and transferee remain jointly and severally liable for any personal injury suffered by an employee prior to the transfer of his employment. The Regulations were implemented to give effect to EU Directives. Some EU countries (as permitted by the Directives) have domestic legislation which provides that the transferor together with transferee continues to be liable after the transfer. Save in very limited circumstances the UK has not done this - but perhaps it would have been fairer for all if it had! Vicky Mallard Partner, BLM Liverpool Suppose a claimant (C) is employed by A Ltd for 15 years. A Ltd then sells the business as a going concern to B Ltd. C retires five years later. C then issues proceedings alleging that due to exposure to noise, in breach of common law and statutory duties, during the entirety of his 20 year employment he has suffered Noise-Induced Hearing Loss. A Ltd and B Ltd are not jointly and severally liable. By virtue of the Regulations A Ltd's liabilities in tort and under statute passed to B Ltd on the purchase of the business. A Ltd does not retain a liability and should not be a party to the proceedings. page 10 Berrymans Lace Mawer

11 Psychiatric damages, anxiety and the link to pleural plaques Pleural plaques are localised areas of fibrous tissue in the pleura which surround the lungs. They are usually asymptomatic and develop many years after the individual has been exposed to asbestos. In June 2007 the case of Rothwell, Grieves and Others v Chemical and Insulating Ltd was heard in the House of Lords. The Lords decision is expected in the autumn. The issue to be determined is as to whether compensation should be awarded for asymptomatic pleural plaques or not. It goes without saying that probably all claimants suffer, at the very least, from an understandable anxiety that in the future they might suffer from a more serious asbestos-related disease, possibly terminal, such as mesothelioma. These people have been described as the 'worried well'. Insurers acknowledge that the diagnosis of pleural plaques can cause distress, but they say that sufferers need to listen to the advice of their medics, which will properly reassure them that this condition is asymptomatic. Arguably, the distress in fact relates to the fact of exposure and that that may bring with it a serious disabling condition. The plaques themselves effectively confirm that there has been exposure. It has also been argued that some of the distress and anxiety may have been generated by claims farmers drumming up business by persuading potential claimants who had previously been in ignorance of their condition to have chest scans undertaken. One of the eight claimants (Mr Grieves) had developed depression (as opposed to just anxiety) as a result of knowledge that he had asymptomatic pleural plaques and claimed that irrespective of the Court of Appeal's (CA) findings on pleural plaques he had a free standing claim for recognised psychiatric injury which was a foreseeable consequence of the breach of duty and recoverable in accordance with the principles in Page v Smith [1996]. The CA rejected this contention. It was not considered that a comparison could be made with stress at work cases where the claimant can recover for a 'free-standing' psychiatric injury. The CA held that the principles in Page did not apply and found a defendant who exposed an employee to asbestos in breach of duty but with no physical manifestation of disease could not be liable for free standing psychiatric injury caused by fear of future disease. This is clearly an emotive area. The CA decision was heavily criticised by the Association of Personal Injury Lawyers (APIL) who said 'we are bitterly disappointed that the CA considers pleural plaques to be trivial, when in actual fact it can blight people's lives for decades.' Equally however, plaques claims have been extremely costly to the insurance industry and are predicted to be more costly if the House of Lords decision confirms that compensation should be paid. In a recent case, Ellis Hindson v Pipe House Whart (Swansea) Ltd (2007) the claimant had developed pleural plaques. At first instance he was awarded 7000 for general damages on a final basis and no additional award was given for future financial loss. He appealed. His award was increased to 15,500 for general damages plus a further 10,500 was awarded to reflect the risk of future financial losses including care. Although it was held that in a typical case of a claimant with pleural plaques and anxiety about his future health the award should be around 5,000, the judge should feel free to go outside that bracket for particular reasons. This particular claimant had a much greater than average risk of contracting asbestos-related cancer. In the event that the House of Lords upholds the CA decision in Grieves, there is speculation as to whether the government will intervene to overturn the decision as they did last year following the decision on apportionment in mesothelioma claims in Barker v Corus (UK) Plc [2006]. There was considerable public outcry and lobbying about the effect that the decision would have in preventing some claimants recovering their full damages. In respect of plaques however, the situation is entirely different and not as emotive. Claimants who go on to suffer ill health as a result of an asbestos-related condition would still be able to bring a claim and receive compensation. The decision in Rothwell, Grieves & Others is expected no earlier than October 2007 and will confirm whether pleural plaques do constitute an actionable injury and will no doubt also address the appropriate level of damages. Val Hughes Partner, BLM Birmingham The judges did not accept that the presence of plaques meant a person was suffering from any disease (ie a physical injury) and therefore could not make a claim. Lord Phillips said 'the law does not recognise a duty to take reasonable care not to cause anxiety.' It remains to be seen what approach the House of Lords will take to the issue of whether a claimant in Mr Grieve's situation can be considered a primary victim and rely on the decision in Page or whether Page will be distinguished for this type of case. Berrymans Lace Mawer page 11

12 BLM events 2007 Below is a selection of events. Claims handling and regulation of the complementary healthcare professions - London 27 September 2007 An afternoon of practical analysis and discussion of the regulations affecting the complementary healthcare market today, as well as liability and negligence issues. Disease review August 2007 saw the release of the first edition of BLM's Disease review e-bulletin. This is a regular update service relevant to law and practice in disease claims. In addition to the e-bulletin we will continue to provide newsflashes on important cases when they arise, Disease matters and commentaries on significant judgments and matters of interest. If you would like any further information please contact one of the editors: Nick Pargeter, BLM London - Boris Cetnik, BLM London - Brian Goodwin, BLM Liverpool - If you would like to receive future editions of the Disease review please Janet Willmott - Claims Review Conferences - London & Manchester 4 October - London 10 October - Manchester BLM's annual Claims Review allows delegates the opportunity to hear from leading experts in the field of personal injury on the technical issues and developments over the last year and anticipate challenges looking forwards. Construction 30 October - London This early evening seminar will focus on the examination of partnering and framework agreements and the legal issues associated with tendering, the Competition Commission and the Office of Fair Trading. Health & Safety workshop. Your office - managing and avoiding risks - Southampton 31 October 2007 A workshop for those whose role includes responsibility for office management. We look at the main risks to employees in office based environments and provide you with practical advice and methods to assess risk and prevent claims. For further information on the full programme of events please contact Linda Coppell T: e: or visit Details of these seminars may change at any time. If you have any questions about the services that BLM can provide, please contact one of the following: Birmingham Leeds Liverpool London Manchester Southampton Stockton-on-Tees Dubai 63 Temple Row Park Row House Castle Chambers Salisbury House King s House Carlton House Innovation House Suite 701 Birmingham Park Row 43 Castle Street London Wall 42 King Street West Carlton Place Yarm Road Al Khaleej Centre B2 5LS Leeds Liverpool London Manchester Southampton Stockton-on-Tees PO Box LS1 5JF L2 9SU EC2M 5QN M3 2NU SO15 2DZ TS18 3TN Dubai, UAE T T T T T T T T +971(0) F F F F F F F F +971(0) DX BIRMINGHAM 1 DX LEEDS 1 DX LIVERPOOL 1 DX FINSBURY SQ DX MANCHESTER 1 DX SOUTHAMPTON DX STOCKTON 8 Brian Goodwin or Boris Cetnik or Val Jones or Chris Gannon or Val Hughes Lawrence Old Tanya Cross Nick Pargeter Vivienne Williams Jeffrey Wale John Harland Disclaimer This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to clients of Berrymans Lace Mawer. Specialist legal advice should always be sought in any particular case. 0907_681 page 12 Berrymans Lace Mawer

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