Reform to Lost Years Damages in Mesothelioma Claims

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1 Reform to Lost Years Damages in Mesothelioma Claims September 2008 Neil Fisher and Kevin Johnson John Pickering and Partners LLP 19 Castle Street Liverpool L2 4SX Tel:

2 The Problem Mesothelioma victims who look after sick or disabled loved ones face a terrible dilemma as to whether they should settle the claim in their lifetime or put their case on hold until the claim can be continued after their death by dependents. This dilemma arises as a result of two conflicting Court of Appeal judgments about whether compensation for loss of services can be recovered in the lifetime claim or not and because of the different way that the law calculates losses in living and fatal claims. A lifetime settlement usually prevents any further claim being made after death. 1 Statutory bereavement damages (currently 11,800) are only recoverable after death. There is legal controversy as to whether funeral expenses are recoverable in a lifetime claim or not. 2 Loss of income awards are differently calculated in living and fatal cases, with fatal dependency awards usually greater in value than loss of income awarded in the lost years to living claimants. Perhaps the greatest and most unfair aspect is the different treatment of loss of provision of services in living and fatal claims. This involves compensation due to a person s inability to carry out services like DIY, gardening and perhaps most crucially, looking after disabled or ill family members. The case of Lowe v Guise 3 allowed a claimant injured in a road traffic accident to recover compensation because of his inability (as a result of injuries arising from the accident) to look after his severely disabled brother to the same extent as before. However, defendants argue that compensation for loss of services cannot be recovered by living mesothelioma sufferers because of the case of Phipps v Brooks Dry Cleaning Services Limited. This was a case brought by a mesothelioma sufferer against his former employer who had exposed him to asbestos. The claimant was a married man. The court refused to award compensation for loss of services in the lost years and Stuart-Smith LJ stated: it presents those in the position of Mr Phipps with a hard choice if they have dependants. Either they sue during their lifetimes and by so doing will recover less: or they wait and leave it to the dependants to bring a claim after death of the primary victim. While I acknowledge that this is an unattractive choice to be made it adds nothing to the anomaly argument. Counsel are well used to advising which course is preferable. Where there are no dependants it is usually better to sue on behalf of the primary victim. Where there are dependants the opposite course will usually yield a greater benefit for the dependants, though the difference is not likely to be very great. The fact that Phipps was a case where the claimant had mesothelioma is not lost on defendants. They will seek to cynically exploit this uncertainty in the law to settle claims for as little as possible, in the knowledge that many mesothelioma victims want to resolve the claim in their lifetime for the peace of mind that it brings and the ability to put their affairs in order. 1 See the Law Reform (Miscellaneous Provisions) Act 1934 and the Fatal Accidents Act 1976, as amended by the Administration of Justice Act See Phipps v Brooks Dry Cleaning Services Limited [1996] QBD 100 and Bateman v Hydro Agri (UK) Limited, Unreported, 15 th September 1995, Kemp and Kemp, Vol. 1, p [2002] EWCA Civ 97. 2

3 The common law has perhaps been denied the opportunity to develop incrementally because of the nature of mesothelioma. The likelihood that a court of first instance would be able to decide the issue definitively is probably remote. However, given the prognosis of the disease, few claimants will still be alive by the time their case would reach the appellate courts. Alternatively and for wholly understandable reasons, mesothelioma sufferers may be reluctant to pursue what amounts to a point of law, and all the uncertainty and financial risk that this may entail, particularly where defendants have made offers that take into account the litigation risks. The awful dilemma that currently exists for mesothelioma sufferers is perhaps best illustrated by two case studies involving claims that we previously dealt with. Case Studies Case Study 1 Mr B was 64 years of age. His wife was 61. She had suffered from schizophrenia for over 20 years. More recently she had been diagnosed with Alzheimer s Disease. She was otherwise in good health. Mr B had taken early retirement so that he could care for his wife. She had very poor short term memory. She had little sense of time and often got up in the middle of the night. Unless supervised she had a tendency to wander and especially to leave the house. Her parents had lived next door and had died many years before. She could not remember that they had died and each time she was told of this she grieved anew. Mr B developed mesothelioma. Their son gave up his teaching job in another city to live with them. He carried on working as a supply teacher while caring for both his parents. Mr B did as much as he could to continue to care for his wife. Even in the latter stages of his illness he used to get up at night to sit with his wife when she was distressed. The lost years claim for Mr B in the absence of any element of care for his wife was approximately 148, He wanted his wife to remain in the house in which they had lived all their married life. He was particularly anxious to settle the claim during his lifetime to know that she could still be cared for. He realised that she was not in a position to conduct the claim herself and he did not want to add to the already considerable stress his family were going through. The claim for the lost years and the care of his wife was assessed at approximately 350, The value of the care claim was challenged by the defendant as was the principle of a payment during lifetime. It was a case which would surely have attracted the sympathy of an Appeal court if it were unsuccessful in the High Court. Mr B accepted an offer of 250, from the defendants. He did not want to risk taking the case to trial and did not want the anxiety and stress of a trial or appeal for his family after his death. Case Study 2 Mr F was diagnosed with mesothelioma at the age of 77. His wife was registered blind and was also hard of hearing. She was heavily reliant upon her husband for the care and assistance that he provided to her. For example, he read her mail to her, answered the door, told her when the gas cooker was turned off, etc. 3

4 Had the claim been brought under the Fatal Accidents Act 1976 after death the value would have been approximately 160,000. However, Mr F understandably wanted to conclude matters in his lifetime and put his affairs in order to avoid his wife having the responsibility for the claim after his death. He felt that she would have enough trying to cope with her own day to day existence without the additional burden of dealing with a legal claim. Therefore, he accepted an offer to settle the claim for 110,000 from the defendant, perhaps about 20,000 more than the claim was worth on a lost years basis in the absence of recovery of damages for care and assistance to his wife. This obviously resulted in a considerable windfall for the insurers concerned. Potential Solutions One possible approach is for the claimant to issue proceedings in his/her lifetime, seeking to resolve liability and obtain interim damages. The case would then be adjourned to await his/her death, at which point it can be resumed by the dependent(s). Defendants have argued (unsuccessfully) in a case of ours 4 that this was an abuse of process. Furthermore, as illustrated above in the case studies, the dependents may themselves be severely ill or disabled and there can be profound practical problems with them pursuing any claim, aside from the obvious anxiety this would cause at an already extremely distressing time. This route would also fail to provide mesothelioma sufferers with comfort and peace of mind that resolution in their lifetimes would bring. In Scotland, the rights of relatives to bring non-patrimonial claims after death has been preserved by legislation. 5 If this was adopted in England and Wales for dependency claims, then credit would have to be given for the earlier lifetime award to avoid double recovery. However, legal costs would increase as a result of the need to bring two separate claims and it would not achieve lifetime resolution or the advantages for claimants that we have outlined. Indeed, this might exacerbate the problem because the claims process would be prolonged and families subject to the pressure of litigation. We propose a different approach of equalisation of heads of damages between living and fatal claims. This would allow living mesothelioma sufferers to recover damages that might otherwise only be recovered posthumously. It would remove the present distinction in mesothelioma claims between lifetime settlements and awards in fatal cases, which appears arbitrary given the frequently short time span between a claim being commenced and death. Sufferers would have the certainty of full compensation. Defendants would have the certainty of a single cause of action, leading to greater certainty in their ability to reserve for damages and costs. It would increase the prospects of settlement and it would increase levels of certainty for the parties, with a reduction in costs and a saving of court time. Despite the many and varied attempts of insurers to challenge claims for damages, the Association of British Insurers in their submission to the Scottish Executive Justice Department on 4 Boden v Crown House Maintenance Ltd and Balfour Kilpatrick, Unreported, 24 th May 2006, before Master Whitaker, RCJ. 5 See the Rights of Relatives to Damages (Mesothelioma) (Scotland) Act

5 the Rights of Relatives to Damages (Mesothelioma) (Scotland) Bill August 2006 recognised the special situation in which mesothelioma sufferers found themselves. They stated: Mesothelioma is a unique disease. The medical characteristics of mesothelioma and because of these, the way in which meso litigation is dealt with, are particular only to mesothelioma It would be wrong, therefore, to apply the same legal rules to other diseases. The law has had to approach mesothelioma in a very different way to conventional legal rules.. We agree with this analysis. The legal system has already recognised the special circumstances of mesothelioma in several instances, most notably the House of Lord s judgment in Fairchild 6 and the Compensation Act For the reasons that we have already outlined, the ability of the common law to develop has been restricted. Therefore, we believe that statutory intervention is required. What we propose is the introduction of a special rule, limited to mesothelioma claims, to permit recovery of posthumous damages in claims concluded in a lifetime. The advantages of this to all parties would be significant. Sufferers would have the certainty of full compensation and the considerable benefit of peace of mind. There would be greater certainty for all parties and costs savings with such a simplified procedure. 6 Fairchild v Glenhaven Funeral Services Limited, [2002] UKHL 22. 5