As always, I hope you enjoy reading this edition and welcome your feedback.

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1 21 March 2014 Disease Brief Welcome to the latest edition of Disease Brief. The Government has published its response to the Reforming mesothelioma claims consultation. The Conditional Fee Agreement (CFA) reforms encapsulated by the Legal Aid, Sentencing and Punishment of Offenders Act 2012 are to apply to diffuse mesothelioma cases. The Government has decided not to proceed with a dedicated mesothelioma pre-action protocol supported by a fixed recoverable costs regime on the basis of insufficient evidence to support the aim of quick settlement. In the related reform initiative, the Government has confirmed a last minute increase in the payments made under the Mesothelioma Act 2014 from 75 per cent to 80 per cent of average civil damages. The increase has become possible due to savings made on the administrative costs of the scheme. Total payouts under the scheme are expected to peak between July 2014 and July The Civil Justice Council (CJC) is reviewing the practical impact of the Jackson reforms at a conference due to take place today, which will be attended by senior members of the judiciary, including Lord Justice Jackson and the Master of the Rolls. Ahead of the conference, the CJC made a call for written submissions on issues including the types of cases being taken on, new funding arrangements and experiences of costs budgets. As always, I hope you enjoy reading this edition and welcome your feedback. Cameron Clark, Partner Case reviews Asbestos claims: histological evidence Defendants fail to strike out claim; Claimant agreed to the destruction of histological samples but fair trial could still take place - Matthews v Collins and others [ ]. Implications Whilst the Defendants in this case were unsuccessful in their strike out application, in other asbestos cases applications have succeeded: Page 1 of 15

2 Weaver v Contract Services Division Ltd [2009] - this claim was struck out, on the basis that the family had deliberately destroyed tissue samples and so denied the Defendant the opportunity of histological examination. Currie v Rio Tinto plc and others [2010] - the decision of the family to deny the Defendants the chance of obtaining histopathological evidence had caused a substantial risk that the court may not be able to deal with the matter justly. In Weaver, Master Whitaker highlighted that asbestos claims can throw up difficult questions of causation, in the sense of attribution of the disease to exposure to asbestos dust and/or whether the alleged victim in fact has the disease at all. In cases where the defendant has clearly been denied the opportunity properly to investigate issues of causation, a strike out application should be considered. Background The hearing related to an application by the Defendants to strike out the Claimant s claim as an abuse of process. This was on the basis that the Claimant had agreed to the destruction of histology samples. The Claimant was the widow and executrix of Reginald Matthews. She alleged that, throughout the deceased s periods of employment with the Defendants, he was exposed to asbestos dust. It was claimed that, as a result, he developed asbestosis and lung cancer which caused his death on 21 January After a post mortem examination and inquest, and following receipt of a letter from the coroner s office, the Claimant agreed that the histology samples should be destroyed. She did not seek advice from her solicitors about this. Decision Mrs Justice Swift dismissed the Defendants application. She held as follows: The Defendants criticisms of the Claimant were not justified. There was no reason to believe that the Claimant would have connected the preservation of the samples with her claim. With hindsight, it was easy to say that her solicitors should have made it clear to the coroner s office and/or to the Claimant that the tissue samples should be preserved. However, they could not be criticised for failing to anticipate the situation that had arisen. The circumstances of this case were completely different from those in Weaver and Currie. Also, the behaviour of the Claimant and her solicitors Page 2 of 15

3 was far removed from the deliberate pursuit of proceedings with the object of preventing a fair trial described in Arrow Nominees Inc and another v Blackledge and others [2000]. Despite the destruction of the samples, it was perfectly possible for a fair trial of the Claimant s claim to take place. Postscript In a postscript to her judgment, Mrs Justice Swift advised that she would be sending a copy of the judgment to the Chief Coroner. This would request that he considers advising all coroners that, in cases where there has been a verdict that a contributory cause of death was industrial disease, any communication to the deceased s family about the disposal of histological samples should contain advice that, if a claim was pending, they should consult their solicitor before giving authority. She also indicated that it would be good practice for claimants solicitors in fatal asbestos claims to advise their clients, and the relevant coroner s office, that disposal of histological samples should not be undertaken without confirmation from the solicitors that the samples were not required for the purposes of the claim. For more information please contact Cameron Clark c.clark@kennedys-law.com Mesothelioma: dependency claim Husband and wife both contracted mesothelioma as a result of Defendant s negligence; Court of Appeal holds wife entitled to 200,000 award for reduced dependency claim - Haxton v Philips Electronics UK Ltd [ ] Implications Where a widow or other dependant claims on behalf of an estate, damages are calculated to take into account factors which might reduce their own life expectancy (and thus reduce the period for which a dependency claim may last). In this case the widow s life expectancy was cut short by the same negligence that caused the death of her husband - exposure to asbestos dust during the course of her husband s employment. The Court of Appeal held that she should be allowed to recover damages for her reduced dependency claim as part of her own claim against the employer. It is unlikely that there will be many claims where these circumstances arise. However, when they do, the Court of Appeal has made it clear that it would not be Page 3 of 15

4 in the interests of justice to allow the negligent employer to benefit from a potential saving. Background Mr Haxton was employed as an electrician by the Defendant for over 40 years until he retired in In the course of his work he was exposed to asbestos dust. He died from mesothelioma in Mrs Haxton was never employed by the Defendant but she washed her husband s work clothes. As a result she came into contact with the dust lodged in the fibres. She was diagnosed with mesothelioma in January Mrs Haxton brought two sets of proceedings against the Defendant: In her capacity as widow and administratrix of Mr Haxton s estate, claiming damages under the Law Reform (Miscellaneous Provisions) Act 1934 and as a dependant under the Fatal Accidents Act Liability was conceded, damages were agreed and a consent order made on 13 May Damages for her loss of dependency were based on a remaining life expectancy of 0.7 years. Proceedings in her own right. Liability was again conceded and damages agreed apart from one disputed item. This related to her claim for future dependency arising from her husband s death. She claimed that, but for the Defendant s negligence, her life would not have been cut short and the assessment of her dependency in the first claim would have been significantly greater. It was agreed that the loss under this head was 200,000. The issue was whether this was a recoverable head of damage. At first instance, Mr David Pittaway QC held that it was not. Decision Lord Justice Elias held that Mrs Haxton was entitled to the additional 200,000: The critical question was whether there was any reason of principle or policy which should deprive Mrs Haxton from recovering damages which represented the loss she had in fact suffered as a result of the curtailment of her life. He was not persuaded that there was. The Fatal Accidents Act confers a statutory right to recover for loss of dependency. In her claim under that Act she could not recover more than her actual loss. However, he could see no reason why the diminution in the value of that right resulting from the negligence of the Defendant could not be recovered as a head of loss in her personal action. Page 4 of 15

5 The loss was not too remote. It must have been foreseeable to the Defendant that Mrs Haxton would have dependency rights which would be diminished as a result of its negligence. For more information please contact David Bywater d.bywater@kennedyslaw.com Mesothelioma: modest exposure Court of Appeal finds Second Defendant occupier liable for alleged exposure to asbestos in the 1950s on the basis that it was in breach of its statutory duty under the Asbestos Industry Regulations McDonald v Department for Communities and Local Government and National Grid Electricity Transmission PLC [ ] Implications This case will be of particular relevance to employees and visitors who were exposed to asbestos dust prior to the introduction of the Asbestos Regulations A court will have sympathy with any claimant who has innocently sustained injury due to the actions of a third party. However, the duty owed by an employer in the years that the Claimant was exposed was much more limited than the duties imposed in later years. The court must consider the steps a reasonable employer ought to have taken with the knowledge at that time. An exemption to liability under the Asbestos Industry Regulations 1931 does exist where it can be proved that the process which caused the asbestos exposure occurred infrequently. However, in practice there are likely to be evidential difficulties. Any information which may have been available nearly 60 years ago is unlikely to still exist today. Even where evidence of asbestos exposure was measured in the 1950s, it is unlikely that this would have been measured by an occupier, who may thus face a rising number of claims. The appeal to the Supreme Court was heard in February We wait with interest to see whether the decision to find the occupier liable is upheld. Background The Claimant alleged that between 1954 and 1959, in the course of his employment by the First Defendant, he attended the Second Defendant s premises to collect pulverised fuel ash (PFA) in his lorry. He claimed that, during those visits, he was Page 5 of 15

6 exposed to asbestos and that this caused him to suffer from mesothelioma, which was diagnosed in July By the time of the trial the Claimant was too ill to give evidence orally. His evidence was received by way of three witness statements. The Defendants submitted that the bulk of the Claimant s activity would have been carried out in areas related to the loading of PFA, which were some distance from the asbestos lagging areas. At first instance, the claim was dismissed by His Honour Judge Denyer QC. The Judge concluded that any exposure was at a modest level, on a limited number of occasions, and over a relatively short period of time. He accepted that the Claimant s likely exposure was not greater than those levels thought of in the 50s and 60s as being unlikely to pose any real risk to health. Decision The Court of Appeal dismissed the appeal against the finding in relation to the First Defendant but allowed the appeal in relation to the Second Defendant: Witness evidence: the Judge was not bound to take the Claimant s witness statements as word for word accurate. He was entitled to have regard to the full procedural circumstances in which the evidence had been admitted and to assess its weight in accordance with s.4 Civil Evidence Act First Defendant: negligence: the First Defendant was not in breach of its common law duty in negligence. Any breach of statutory duty by the Second Defendant did not import a breach of a non-delegable duty in negligence by the First Defendant, without some material knowledge of the danger to which the Claimant was potentially exposed. Second Defendant: negligence: in view of the Judge s findings of fact, the Claimant s case against the Second Defendant in negligence was a hopeless one. Second Defendant: Factories Act 1937: it was difficult to see how the Claimant was a person employed by the Second Defendant for the purposes of s.47 of the Act. Even if his claim fell within this section, there was not evidence to establish a substantial quantity of dust. Second Defendant: Asbestos Industry Regulations 1931: the Second Defendant was in breach of Regulation 2(a), by mixing asbestos without an exhaust draught effected by mechanical means so designed and maintained as to ensure so far as practicable the suppression of dust Page 6 of 15

7 during the process. Even if the full extent of the danger from dust was not known at the time, it was necessary to protect against it. There was evidence that such protection was possible. In relation to causation, even if the Claimant had also been exposed to asbestos dust in the general atmosphere, the Second Defendant had materially increased the risk of contracting mesothelioma - see Sienkiewicz v Grief (UK) Ltd [2011]. For more information please contact David Bywater d.bywater@kennedyslaw.com Pre-action disclosure Court of Appeal allows application for pre-action disclosure; applicant does not need to demonstrate arguable case - Smith v Secretary of State for Energy and Climate Change [ ] The Appellant alleged that he suffered hearing loss as a result of his employment from 1964 to 1994 by the National Coal Board. In September 2011, his solicitors wrote a letter of claim. This included an extensive request for disclosure of documents which might help to establish the levels of noise experienced in the various pits at which he had worked underground and his employer s knowledge of those levels and the consequent risks. This request was refused. At first instance, the District Judge ordered disclosure of some of the categories of documents being sought. On appeal by the Respondent, His Honour Judge Langan QC overturned this order and dismissed the application for pre-action disclosure. Decision The Court of Appeal ordered that, in this case, pre-action disclosure should be given. Lord Justice Underhill held as follows: Guidance on the meaning and effect of CPR was provided by the Court of Appeal in Black v Sumitomo Corporation [2001]. A two-stage approach is required, to establish whether the jurisdictional thresholds are satisfied and, if they are, to consider whether, as a matter of discretion, an order for disclosure should be made. The more focused the complaint and the more limited the disclosure sought, the easier it is for the court to exercise its discretion in favour of pre-action disclosure. Page 7 of 15

8 There is no jurisdictional arguability threshold for the making of an order under CPR All that has to be shown is that it is likely that the respondent would be a party to the proceedings if commenced. However, in considering whether to exercise discretion, the issue was whether the applicant had shown some reason to believe that he may have suffered a compensatable injury and, if so, with what degree of likelihood. If the claim could be characterised as speculative it might be wrong to require any disclosure that was onerous. The evidence that the Appellant had suffered hearing loss was very short on detail. However, people do not necessarily need a test or a doctor to tell them if their hearing has deteriorated. It remained necessary to bring into the equation the burden which giving disclosure would impose on the Respondent, which would not be too onerous. Lord Justice Longmore, agreeing with this judgment, added: Comment Applications for pre-action disclosure are not meant to be a mini-trial of the action and should be disposed of swiftly and economically. This decision does not mean that a court will automatically grant disclosure of each and every item requested by way of pre-action disclosure. However, there is no requirement for a potential claimant to set out the full facts of his claim before he may be entitled to disclosure from a potential defendant. Defendants should ensure that they have enough information about the claim to enable them to locate relevant documents. In the event that a claimant s allegations are too broad or too vague, a court will need to consider whether the defendant is reasonably able to comply with the request. It is unlikely that a court would be critical of a defendant which states that it requires further information in order to carry out a reasonable search. When providing disclosure, we recommend cautioning that further documents which are currently not considered to be relevant to the claim may later be disclosed if considered relevant at that stage. The claimant should be invited to adopt a cards on the table approach and set out the full nature of his claim so that the defendant can carry out proper investigations. It is unlikely that this approach would be seen by the courts to be unreasonable should the defendant later disclose documents not provided at the outset. For more information please contact David Bywater- d.bywater@kennedys-law.com Page 8 of 15

9 Professional negligence: personal injury claim Solicitors failed to take sufficient steps to ensure the Claimant understood the advice he was given; standard questionnaire and letters insufficient - Procter v Raleys Solicitors [ ] Implications His Honour Judge Gosnell concluded that the Defendants should have done more to ensure that the Claimant actually understood the advice he was receiving. The obtaining of full instructions would have included a meaningful discussion with the Claimant about what he could or could not do once he became symptomatic. This decision comes at a time when an increasing number of cases are subject to fixed costs and strict adherence to rules and practice directions is expected. It calls into question the extent to which claimant firms of solicitors can set in place systems for obtaining instructions which are heavily standardised and paper based. Whilst the emphasis on cost-effective litigation may mean efficiency and speed of resolution, it does not negate the need to provide competent and comprehensive advice. Background The claim was made by the Claimant against the Defendants, a firm of solicitors, for professional negligence. The Claimant was employed as a miner at various collieries in Yorkshire. He alleged he developed Vibration White Finger (VWF) as a result of exposure to vibratory tools. In January 2000 he instructed the Defendants to pursue a claim for damages on his behalf. This was under a compensation scheme set up by the Department for Trade and Industry, which provided tariff-based compensation. On 17 November 2003 the Claimant agreed to settle his claim for 11,141. No payment was made in compensation for services required as a result of his disability as no such claim had been registered under the scheme. He alleged that if the Defendants had properly advised him he would have made a claim for services and could have received 11,079 under this head of loss. The Claimant had filled in one of the Defendants standard questionnaires on 12 January Subsequent letters sent by the Defendants to the Claimant made reference to potential services claims. No face-to-face meeting took place. Decision The Judge awarded the Claimant 5,539.50, being 50 per cent of the services claim: Page 9 of 15

10 The Defendants owed a duty of care to the Claimant. The standard of care was that of a reasonably competent solicitor specialising in the area of law in which it held itself out to be a specialist (in this case industrial disease claims). The Defendants were in breach of duty. On the facts of this case, they should have done more to ensure that the Claimant actually understood the advice he was being given. It was reasonably foreseeable that a client such as this Claimant might not fully understand how the system operated and what claims he was actually entitled to make. On the balance of probabilities, if the Claimant had been properly advised by the Defendants he would have instructed them to make a services claim. The Claimant s original claim had a real and substantial prospect of success that was more than negligible. His best assessment of his statistical chances was 50 per cent. Loss of chance claims The Judge made it clear that, when considering loss of chance cases, what is necessary is an assessment of the prospects, not a trial within a trial. He rejected the Defendants submission that he was to make a finding of fact on each task the Claimant claimed he could no longer do, as this would essentially be retrying the original litigation. The judge's task is to assess the loss. The Judge confirmed that the correct approach to cases of this nature is as follows: Determine whether there has been a breach of duty. If there has, did the breach cause or materially contribute to the claimant's alleged loss? Consider, on a balance of probability basis, whether the claimant would have acted differently if he had received competent advice. Decide whether the claimant has lost something of value, in the sense that his prospects of success are more than negligible. If the claimant has lost a claim with more than negligible prospects of success, based on a realistic assessment, decide what those prospects of success were. Make an assessment of what the likely value of the claim was, taking into account the prospects of success. For more information please contact Elizabeth Simpson e.simpson@kennedyslaw.com Page 10 of 15

11 Feature articles Occupational disease claims: market developments A round up of recent news relating to the Scottish and Welsh Asbestos Bills, the Health and Safety Executive (HSE) Science Report 2014, obtaining work records in mesothelioma claims, a new HSE Approved Code of Practice on asbestos and the claims portal. Asbestos Bills: Scotland and Wales A member s bill, The Recovery of Medical Costs for Asbestos Diseases (Scotland) Bill, has been lodged in the Scottish Parliament by Stuart McMillan MSP. The Bill is intended to allow NHS Scotland to recover from insurers the estimated 20 million a year costs of treating people in Scotland with asbestos related conditions. The Recovery of Medical Costs for Asbestos Diseases (Wales) Bill was passed by the Welsh Assembly in November However, the Bill has been referred to the Supreme Court to decide whether the Assembly has the power to pass the legislation. HSE Science Report 2014 The HSE has published its sixth annual Science Report highlighting achievements in research. The HSE s budget for commissioned research and technical support in 2013/14 is 28 million. Research topics include the health of people who work with pesticides, occupational causes of Chronic Obstructive Pulmonary Disease, the health implications of working at recycling sites and the use of the Management Standards for Work Related Stress to reduce stress in the workplace. Mesothelioma: obtaining work records The Association of Personal Injury Lawyers (APIL) has been granted permission to intervene in a judicial review brought by Revenue and Customs (HMRC) against the Liverpool coroner. HMRC seeks to quash a notice issued by the coroner requiring it to produce a work history in connection with a mesothelioma inquest, arguing that it is prevented from doing so by the Data Protection Act APIL has raised the wider implications of the case for those with fatal industrial disease claims. New Approved Code of Practice: asbestos Page 11 of 15

12 Following a consultation, the HSE has published a new Approved Code of Practice (ACOP), Managing and working with asbestos. Two previous ACOPS have been consolidated into this single revised ACOP. The ACOP is intended to make legal compliance clearer to dutyholders and to reflect the changes introduced in the Control of Asbestos Regulations Portal: disease claims Claims Portal Ltd has released updated management information for March This shows a steady monthly increase in disease claims since extension; from 167 claims being submitted in August 2013 to 1,031 claims in February The current rolling total stands at 4,779 claims. Interestingly, 29 claims are now indicated to have settled in the Portal - three settlements in December 2013, five in January 2014 and 21 in February This compares to much more significant numbers of settlements for public liability and employers liability (accident only) claims. Whilst the settlement figure for disease is low, some had predicted that no claims would successfully settle in the portal given the complexities that can be involved. For more information please contact Cameron Clark c.clark@kennedys-law.com or Philippa Craven p.craven@kennedys-law.com Reforming mesothelioma claims: a double dose of change Mesothelioma claims have been under the spotlight in recent months due to two legislative initiatives, both designed at streamlining the claims experience of victims and ensuring quick settlement. We consider the outcomes of both sets of measures. Ministry of Justice (MoJ) consultation The MoJ has published its consultation response, confirming that mesothelioma claims will be brought within sections 44 and 46 of the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act 2012 (CFA reforms). Claims are to be aligned with the first payments made under the Mesothelioma Act 2014, which are expected to commence on 1 July The response took into account 105 stakeholder responses, mainly submitted by victims support groups and claimant lawyers. The majority of respondents (69 per cent) opposed bringing the LASPO reforms into force for mesothelioma claims on the basis claimants would be worse off. Nevertheless, the MoJ has confirmed its belief that LASPO aims to lower costs in all Page 12 of 15

13 civil cases, which includes mesothelioma claims, and it is right to apply the reforms to these cases. This decision is to be welcomed. Liability, and therefore settlement, is unlikely to be an issue between the parties once it has been established that a claimant has been exposed to asbestos fibres by a defendant. Mesothelioma cases, therefore, typically represent a low cost risk. Furthermore, as a matter of principle and practicality, it is vital to keep the Jackson reforms intact to avoid watering down the overarching objective of proportionate litigation costs across the personal injury spectrum. The MoJ has declined to proceed with the Association of British Insurers proposal of a dedicated mesothelioma pre-action protocol (MPAP), as supported by a fixed recoverable costs (FRC) regime and electronic secure mesothelioma claims gateway (SMCG). The MoJ is unconvinced that such measures would achieve the aim of ensuring quick settlement. Looking at the main aspects of the response with regard to a dedicated MPAP: 75 per cent of respondents did not support the proposed MPAP as currently drafted due to concerns it will limit access to justice and does not take into account practicalities of the process. 65 per cent of respondents did not think the proposed MPAP will result in reduced legal costs in mesothelioma cases. Respondents were divided on the proposal of a SMCG. Insurers and defendant lawyers welcomed the prospect of a SMCG acting as a central information point for traced and untraced mesothelioma claims. Victims support groups and claimant lawyers considered it would be time consuming, costly and would involve duplication of work. The judiciary and medical profession, in particular, were concerned about data protection and ethical issues. 70 per cent of respondents were against the introduction of a FRC regime for mesothelioma claims on the basis of complexity. The MoJ has stated it remains committed to working with experts on all sides of the debate to try to identify what could feasibly be done to ameliorate these issues. It proposes to take into consideration other reform measures, such as costs budgeting and assessment, to ensure an effective constraint on legal costs. Such assertions are reassuring. Going forward, it is important for the MoJ to realise that, however emotive the issues are with this type of claim, liability tends to be relatively straightforward. Whilst any form of pre-action protocol should be used as a guide of best practice, the reality is that most claims will proceed to litigation and to the specially designed fast track system, not least to ensure an interim payment of 50,000. Page 13 of 15

14 It is, therefore, important for the MoJ to realise that FRCs should support both preaction and litigated claims. To make exceptions risks unintended consequences derived from seeking out opportunities to benefit from higher costs regimes in order to replace lost pre-jackson revenue - something we are already seeing in response to the lower costs regimes now in place for lower value EL and PL claims. Given the recognition that the LASPO reforms should apply to all claims, it is to be hoped that this support will follow. Mesothelioma Act In the related development to establish the mesothelioma scheme, the Mesothelioma Bill has received Royal Assent and has been renamed the Mesothelioma Act The scheme administration of the Act comes into force on 31 March The levy will come into force on 1 September The Government made a last minute change to increase the payouts from 75 per cent to 80 per cent of the average of compensation under civil claims, made possible because of savings made on the administrative costs of the scheme. Total payouts under the scheme are projected to peak between July 2014 and July 2018, with the cost of the current scheme at 2.94 per cent of employers liability gross written premiums over a 10 year period, which matches the levy limit as legislated for under the Act. The Government has promised (if it remains in power) to review the scheme after four years in operation, to see if payouts could increase to 90 per cent of average damages. It has also offered its support to increasing the scope of the scheme to the public liability area and to promoting similar schemes for other industrial diseases in the future. The scheme provides for a 7,000 legal fee, which will be paid directly to the successful claimant and not his lawyer. The reasoning behind this sum appears to be based on accepting that that an unsuccessful trace costs around 9,000 in legal costs, so the 7,000 threshold means a guaranteed saving under the scheme. The Government has said it will look enormously closely with the Association of Personal Injury Lawyers, our own lawyers and the Ministry of Justice to ensure that no rip-offs take place. We remain of the view that the threshold is high and whilst we support the intention that it should increase competition between solicitors, thereby lowering costs for claimants, we suspect that the remark made by Nick Brown MP is more realistic and represents a self-fulfilling prophecy: someone who puts 7,000 in front of a claims farmer or a lawyer will be presented with a bill of about 7,000. Kennedys responded to the consultation and met with parliamentarians and officials in order to discuss the Bill and ensure they heard the views of our clients. Page 14 of 15

15 At a round table meeting with Lord McKenzie (who was instrumental in the passing of the Bill), he highlighted the importance of stakeholders getting involved in the legislative process from the start. He fortified our determination to continue to play an active and constructive role in the development of policy that affects our clients and help ensure effective legislation is passed by Parliament. For more information please contact Philippa Craven p.craven@kennedys-law.com Kennedys is a trading name of Kennedys Law LLP. Kennedys Law LLP is a limited liability partnership registered in England and Wales (with registered number OC353214). Page 15 of 15