THE MULTI-NATIONAL ASBESTOS CLAIMANT

Transcription

1 THE MULTI-NATIONAL ASBESTOS CLAIMANT DAVID PLATT David specialises in all forms of industrial and occupational disease, in particular: stress at work; COSHH and environmental exposure claims; asbestos cases; dermatitis; VWF; upper limb disorder litigation; cancer, radon and deafness claims. He undertakes all aspects of personal injury work and acts for both claimants and defendants. He has undertaken ground breaking work in passive smoking and toxic mould claims. As well as rail, road traffic and general employer liability work, he also advises in cases of utmost severity and on local authority liability. He undertakes related employment, ET and discrimination claims. He is also involved in insurance disputes, and advises upon linked policy and trigger claims. He is rated as a leading junior by Chambers & Partners, the Legal 500 & Legal Experts. 1. In an increasingly globalised world, it is scarcely any surprise that litigants and litigation have assumed greater international dimensions. Disease work is no exception. The consequences of workplace and environmental exposure to asbestos have proved to be a worldwide phenomenon, with the U.S. and U.K. in particular having high volumes of claims and substantial pressure imposed upon the insurance market and employers as a consequence. 2. As labour markets become mobile, it will become more common for litigants to pursue claims in more than one jurisdiction. The most obvious and immediate inter-jurisdictional issues may arise between claimants employed both north and south of the Scottish border. A number of

2 cases have and will continue to be brought with differential exposures within the European Union. Beyond Europe, and for reasons of culture, language and history, it is the United States which perhaps offers the most likely source of inter-jurisdictional disease claims. 3. The purpose of this article is not to set out academic guidance on the appropriate country in which such multi-national litigants should bring such claims. These are complex questions which often arise and which will be the subject of separate discussion. It has to be said that most of these claims are accident rather than exposure claims, and as such tend to involve claimants of one nationality being injured in the country of another (e.g., British citizens injured or killed in a road traffic accident in Spain). This article will examine one particular aspect relevant to disease litigation in relation to "multi-national litigants" and specifically the damages they may recover in England. It arises from a recent claim in the Royal Courts of Justice which was settled on the day of trial (6 th March 2007). The Claim in Hutchinson v. Brigham & Cowan 4. Mr. Hutchinson was born in England and worked in a number of ship repairing and construction-related industries between 1950 and He was exposed to asbestos during the course of these employments by a number of different defendants, and no issue existed on liability. 5. The unusual feature about this case was that Mr. Hutchinson left the United Kingdom and went to live permanently in the United States in Between 1969 and 1988 Mr. Hutchinson was again exposed to asbestos in a number of employments all located in the U.S. State of Massachusetts. Sadly Mr. Hutchinson developed symptoms of what was subsequently diagnosed to be mesothelioma in At the date of trial, Mr. Hutchinson was

3 a living claimant resident in the United States- but underlying the proceedings was the usual and pessimistic prognosis afforded to such a diagnosis. 6. Mr. Hutchinson commenced proceedings in both the U.S. State of Massachusetts and in England at about the same time. He wrongly failed to tell the defendants in either jurisdiction that he was litigating in the other, and the matter only came to light because of a chance conversation with the solicitor instructed by the English defendants (Berrymans Lace Mawer). 7. The U.S. proceedings had been commenced against 62 named manufacturers of products containing asbestos which had been used by the claimant during the course of his U.S. employment. A U.S. litigant will ordinarily adopt this route as there is no employer liability litigation in the United States given the operation of the statutory Workers Compensation System. In contrast, his litigation in the UK was the standard employers liability claim (against initially 5 defendants) with which the industry has become familiar. 8. Mr. Hutchinson successfully negotiated a compromise of the U.S. proceedings in the Massachusetts Court in the sum of $800,000. That sum was inclusive of costs, as U.S. judgments do not contain a separate settlement of costs in the litigation. It was the claimant's case that in order to obtain a settlement in this sum, he had effectively to give credit for the period of UK exposure. The concern of his U.S. attorneys was that the U.K. exposure could have led to a finding that it was this exposure which was the culpable and causative basis for his mesothelioma and not the exposure in the U.S.. Given that the exposure period in the U.S. and U.K. were approximately comparable (at 19 years), it was suggested by the claimant that he had taken a discount of some 50% to reflect this risk. As such, he claimed that he had

4 not been compensated for U.K. exposure because the U.S. proceedings did not deal with these consequences. 9. When the claim came before Master Whitaker in the Royal Courts of Justice in November 2006, he ordered a preliminary trial of the issue which the U.S. proceedings had created namely what account was to be taken in the English proceedings of the settlement in the U.S. proceedings of $800, The claimant's case was that only partial credit should be given for the U.S. damages. Clearly, if full credit needed to be given for $800,000 in the English court, this would entirely extinguish any personal injury claim which he might have. 11. Two important initial points need to be made. This was a claim involving several or concurrent tortfeasors i.e., there were different causes of action (i.e. product liability in the U.S. and employers liability in the U.K.) but the damage was the same (namely mesothelioma and its concomitant consequences). Different rules will apply where the claimant seeks to litigate the same cause of action against the same defendants in two different jurisdictions. In general the courts are much more reticent about allowing such proceedings to be prosecuted. 12. Secondly, it is not controversial that, in general, where one has concurrent tortfeasors who have contributed to the same damage, any judgment received by one tortfeasor may be set off against the damages payable by another. Clearly there may be issues of contribution recovery as between defendants, but the principle rule is that the claimant can recover no more than his loss from any of the defendants.

5 13. However the issues in the case were not so straightforward. The first question was whether it was the headline judgment award or the settlement sum (i.e. the $800,000) which was set off against the English award- or whether it is the amount which the claimant had actually received by way of payment under the obligation which was the determinative set off figure (and by the time of trial this was something of the order of half of this settlement sum). The answer is the latter, and this has important consequences when considering how tactically to deal with such matters. 14. That it is the damages actually received which must be set off appears to be the inevitable consequence of the decisions in Morris v. Baron and Co. [1918] A.C. 1, 35; and Jameson v. C.E.G.B. [2000] 1 A.C. 455, 480. A claimant must actually have received the damages for another concurrent tortfeasor to be able to set off such a sum against the claimant's loss, and a litigant can in theory litigate against various concurrent defendants until he receives satisfaction by way of his damages 1. A judgment alone is not sufficient on the presumption that such a judgment may not be satisfied by an impecunious defendant. This may lead to the curious position in international litigation of this type where (as here) the U.S defendants payments were gradually reducing the liability of the U.K. defendants (as the $800,000 settlement was followed by the U.S. receipts being received on a cumulative and piecemeal basis over a number of months). Accordingly and arguably, the extent of the U.K defendants' liabilities was determined by timescale and not by any principle considerations of law or liability. 1 But subject to issues over costs and some statutory controls such as Section 4 of the Civil Liability (Contribution) Act 1978.

6 15. On the basis of these authorities, it was accepted by both parties that in order to set off any sums against a concurrent tortfeasor it was necessary for sums to have been in fact received from the other tortfeasors. However a number of other issues were hotly contested. 16. The case for the claimant may be summarised as follows: (a) That he was only obliged to set off 50% of received U.S. damages against any English award because the U.S. proceedings had not involved any compensation for U.K. exposure, and had reduced the U.S. award (as above). (b) That if the claimant was wrong on this, then he should only be obliged to offset such heads of damage as were recoverable both in the U.S. and in England. One example of a head of damages which was recoverable in England but not in Massachusetts was the concept of "the lost years", where a litigant can recover for such income as he would have received had his life expectancy not been diminished by reason of the tortious conduct of the defendant. (c) That given that the U.S. settlement included costs as a component part of the award of $800,000, that the costs of the U.S. proceedings should be deducted from the award of $800,000 before any sums were offset against the English award. 17. The English proceedings had a total value which was put by the claimant at c. 275,000. In the event the preliminary issue listed before Eady J. was compromised as part of a settlement of the whole claim for a judgment sum of 47,000 plus an allowance as to the claimant's costs.

7 Discussion: 18. This is clearly a very low award in a mesothelioma case. It reflected litigation risk on both sides. It also reflected the fact that the claimant had not received anything like all of his U.S. damages by the time the preliminary issue was listed to be heard by the English court. 19. The defendants contended that all receipts from any litigation in any other jurisdiction relating to the same indivisible condition for which compensation was sought in England had to be offset against any award which the English court might make in satisfaction of the claimant's English cause of action. Although this argument was not tested before the Court, the defendants believe that their argument was a strong one, and that the settlement value reflected this. It is therefore worth setting out the principles behind such an argument for use in other cases: 20. Damages as compensation for a tort are only payable in monetary form, as this is the only basis upon which the English system operates. The purpose of an award of damages in an English court is to compensate the claimant in monetary terms for the damage and injury he has suffered. Inherent in that proposition is the principle that the loss is reducible to a lump sum which is deemed (however difficult it may seem) to be "compensation" which satisfies the tort. 21. Through a process of assessing component heads of claim, the Court evaluates that total level of compensation. It is the total and not the process by which it is arrived at or the heads of claim themselves which represent "compensation" for the purposes of discharging the tort. We can call that total compensation payment "X".

8 22. The purpose of the award of damages is to replace what the claimant has lost in accordance with the dictum of Lord Blackburn in Livingstone v Rawyards Coal Company (1880) 5 App.CAS.25 where he defined the measure of damages as: "That sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been in had he not sustained the wrong for which he is now getting his compensation or reparation". 23. The purpose of the award of damages is therefore compensation for the claimant. It is NOT to evaluate what the defendant ought fairly and reasonably to pay. That is a different proposition. 24. The claim for the contraction of mesothelioma and its subsequent effects has a monetary value which the English court regards as just compensation i.e., "X". For these purposes "X" is a fixed sum (although clearly different litigants in different circumstances would be awarded different figures representing "X"). 25. Once the claimant has been paid "X" he has no residual claim in the English courts, not least because he then has no "damage" and damage is an essential component of any cause of action in tort Where the damage is the same in both jurisdictions, and the loss is indivisible (as in mesothelioma in contrast to asbestosis or deafness claims), then an award in another jurisdiction must be offset in full when assessing damages in an English court. The English 2 Save for the few causes of action which are actionable per se such as trespass.

9 court is governed by its own rules as to what amounts to just compensation, as this is a matter of English law only As such [sic], there was no logical basis for deducting 50% from the claim, nor for trying to establish recoverable damages by virtue of a like-for-like comparison with the Massachusetts and English heads of claim. 28. There is almost no case law in this area. The one relevant authority of any direct applicability is Kohnke v. Karger [1951] 2 KB In Kohnke, the plaintiff was injured in France in a collision between a motor car (in which she was a passenger) and a lorry. She brought proceedings in France against the lorry driver and recovered damages. Later she also brought proceedings against the car driver in England and recovered additional damages given the different (and more generous) rules for the assessment of damages in England. The plaintiff did not dispute that she was obliged to give credit for the French damages in any English proceedings. Whilst the issue did not come up for direct consideration, nevertheless Lynskey J. remarked that "if I had to decide it, I should have thought that as her damages had been pro tanto satisfied by what she has already received, her damages must be reduced by that amount in her claim against the present Defendant". 30. This finds echo in the statement of principle in Clerk & Lindsell on Torts (19 th Edition) that: 3 The assessment of damages being a matter for the "lex fori", or the court where the determination of damages is undertaken. 4 Which seems to have been approved by Lord Clyde in Jameson v. CEGB (ibid).

10 Where there are separate causes of action against different defendants for the same damage, a judgment obtained against one of them in a foreign court, even though satisfied, is not a bar to proceedings against the other for the same damage in courts of this country, save that the damages awarded to the claimant must be reduced by the amount by which they have been pro tanto satisfied by the foreign judgment. 31. The upshot of the above is that an English defendant should be able to offset such damages as a claimant has received in other jurisdictions against any claim brought in England providing the damage is the same and that the condition for which damages is sought is indivisible. Clearly the position with apportionable diseases will be different as distinct and separate damage will have been caused in the two jurisdictions subject to arguments over any overlap. The attempt to apportion the U.S. damages in a mesothelioma claim is akin to reinventing the decision in Barker and would in any event be arbitrary given the jury based system for deciding damages in the U.S This set off principle also leads to a number of tactical and somewhat anomalous considerations in claims involving such multi-national litigants: (a) It is clearly important with a claimant who has lived for a substantial period in another jurisdiction (particularly in the U.S. with their more generous scheme of damages) to determine whether they have commenced proceedings in another country and received an award or settlement in damages. (b) Where they have done so, the important figure to look at is the level of receipts and not the total notional sum of the award or settlement. This may lead to curious consequences

11 where the defendants' liability disappears by the effluxion of time and the activity of third party concurrent tortfeasors rather than by anything which is done or decided in this country. (c) Given that it is uncertain that concurrent tortfeasors in another jurisdiction can commence contribution proceedings in this country and/or there are substantial difficulties if they wish to do so, it is clearly in the interest of the English defendants to await developments in the other jurisdiction (whether that be Scotland or the United States) with a view to diminishing their liability in the litigation as a whole. Clearly this anomaly does not arise in proceedings where all the concurrent tortfeasors are capable of being sued in England, as contribution proceedings between such parties are a regular part of disease and asbestos litigation. 33. There are therefore a number of lessons to be learnt from litigation such as the Hutchinson case. For once, the rather irregular U.S. system of assessing damages in the U.S. courts may be a positive benefit to UK insurers, employers and policy holders. However (as can be seen from what is said above) it also contains a number of traps for the unwary. Doubtless aspects of this problem will be the subject of further litigation in due course. David Platt 7 th March 2007