DMC Category Rating: Developed

This case note is based on an Article in the May 2006 Edition of the ‘(Re)insurance Bulletin’, published by the Insurance/Reinsurance team at the international firm of lawyers, DLA Piper Rudnick Gray Cary. DLA Piper is an International Contributor to this website

Background
The standard rule in negligence claims is that it must be proved on a balance of probabilities that the defendant's conduct caused the damage. In other words, "but for" the defendant's breach of duty, the claimant would not have suffered damage.

The current state of state of scientific knowledge about the way in which asbestos fibres cause mesothelioma, however, means that an employee cannot satisfy the "but for" test if he has negligently been exposed to asbestos by different employers at different times during his working life. Whilst he might be able to prove that at each workplace each employer failed in his duty of care to protect him from exposure, he will not be able to identify at which workplace the crucial exposure took place. His claim would fail.

In 2002, the House of Lords concluded this was an unjust result (Fairchild v Glenhaven Funeral Services Ltd [2002] UK HL 22). It held that an exceptional and less demanding test of causation should apply in cases where:

(i) an employee was employed at different times over differing periods by employer A and employer B; and

(ii) employer A and employer B were both subject to a duty to take reasonable care to prevent the employee inhaling asbestos dust because of the known risk that it might cause a mesothelioma; and

(iii) both employer A and employer B were in breach of that duty, with the result that, during both periods, the employee inhaled excessive quantities of asbestos dust; and

(iv) the employee developed mesothelioma; and

(v) any cause of the mesothelioma other than the inhalation of asbestos dust at work could be effectively discounted; but

(vi) the employee could not prove, on the balance of probabilities, that his mesothelioma was a result of his inhaling asbestos dust during his employment by one particular employer or the other, or during both employments taken together.

Provided a case satisfied conditions (i) to (vi), the employee was entitled to claim against both employer A and employer B, or either of them.

This decision was understood to mean that, in a Fairchild situation, each employer in breach of duty would be liable in full for the claimant's damages. On orthodox principles, all defendants who have caused the same damage are jointly and severally liable. It would be up to the employer held liable to seek contributions from any other employers liable in respect of the same damage - assuming he could find them and that they had funds, or insurance, available.

The Barker case tested the limits of Fairchild and (together with the two other cases heard with it) the idea that any one employer should be liable for the whole claim.

The cases
Mr Barker died of asbestos-related mesothelioma in June 1996. During his working life, he had three material exposures to asbestos. The first was for six weeks in 1958 while working for a company that subsequently became insolvent without any identified insurer. The second period was between April and October 1962, while he was working for a predecessor of Corus. The third was for at least three short periods between 1968 and 1975 while working as a self-employed plasterer.

The circumstances were, therefore, different from Fairchild in that, although the first two exposures were the consequence of breaches of duty by employers, the last (it was agreed) involved a failure by Mr Barker to take reasonable care for his own safety.

Did this mean Fairchild applied? If so, was Corus liable for all the damage suffered by Mr Barker's estate and his dependants, or only for a proportion equivalent to its contribution to the risk that he would develop mesothelioma?

In the other two cases, all the exposures to asbestos were the result of a breach of duty owed by employers or occupiers so there was no dispute that the cases fell within Fairchild. The only issue was whether liability between the employers was joint and several or whether it should be apportioned.

In the Barker case, the judge at first instance decided that Fairchild applied, notwithstanding the period of self-employment, and that Corus was liable jointly and severally with the other (defunct) employer. Its liability, however, was subject to a 20% reduction for Mr Barker's contributory negligence while he was self-employed. The Court of Appeal agreed with the judge on both points.

Judgment
The House of Lords agreed that Fairchild applied, but (by a majority of four to one) concluded that liability should be apportioned according to the relative degree of contribution the defendant had made to the risk of the disease being contracted.

Applying Fairchild
In finding that there were some circumstances in which a strict "but for" test of causation could be relaxed, the Law Lords in Fairchild approved and applied an earlier House of Lords decision, McGhee v National Coal Board [1973] 1 WLR 1.

In that case, the claimant contracted dermatitis after a short period working at a brick kiln. There were two possible causes of the condition: brick dust which adhered to his skin during the working day (which was not alleged to involve any breach of duty) and the dust which continued to adhere to his skin while he was on his way home (which would have been washed off had his employer provided a shower). The fact that one source of risk was the result of a tortious breach of duty and the other was not did not prevent the House of Lords allowing the claim to succeed.

In the Barker case, Lord Hoffmann (who gave the leading judgment) concluded that, once one accepted that Fairchild could operate even though not all the potential causes of damage were tortious, there was no logic in requiring that a non-tortious source of risk had to be created by someone who was also a wrongdoer. In other words, Fairchild could apply, even though some of the exposures happened when Mr Barker was self employed and (it was accepted) had failed to take reasonable care for his own safety.

It would be a different matter, however, if separate potential causative agents were involved. In Wilsher v Essex Area Health Authority [1978] QB 730, an eye condition could have been caused by the patient negligently being given excess oxygen or by a number of other possible causes. The Court of Appeal and the House of Lords in that case refused to apply the McGhee principle, and the Law Lords in Fairchild agreed that was the right decision. There was no evidence that the excess oxygen was any more likely than any of the other factors to have caused the condition.

Lord Hoffmann took the same approach. Fairchild would apply if, say, the claimant developed mesothelioma after being exposed to different types of asbestos dust (or even to some other causative matter that operated in the same way), but not if he suffered lung cancer which may have been caused by exposure to asbestos but may also have been caused by smoking and it could not be proved which was the more likely to have been the causative agent. Lord Scott agreed, commenting that, in such circumstances, attributing the proportion of risk of the eventual outcome to each particular agent would be "well nigh impossible and highly artificial".

Apportioning liability
In the Barker case, the judge at first instance and the Court of Appeal proceeded on the assumption that, in a Fairchild situation, each of the defendant employers is jointly and severally liable to the claimant because they each materially contributed towards the risk of the claimant contracting the disease and, for the purpose of deciding liability, each should be deemed to have caused the disease.

Mesothelioma is an "indivisible" injury, in the sense that it cannot be proved which particular asbestos exposure caused it to develop. Unlike asbestosis, which can partly be caused by one period of exposure and made worse by another, the likelihood is that mesothelioma is caused by a single exposure.

Where an injury is indivisible, any wrongdoer whose act proximately caused the injury is liable to compensate the claimant for the whole of it (Dingle v Associated Newspapers Limited [1961] 2 QB 162). Tortfeasors may have claims between themselves for contributions, but that is of no concern to the claimant.

The majority of the House of Lords, however, took a completely different approach. In their view, the basis of liability in Fairchild was not that a defendant who had exposed the claimant to asbestos was deemed to have actually caused or materially contributed to the contraction of the disease, but that the defendant's breach had materially increased the risk of the claimant contracting the disease.

This approach, they were careful to emphasise, applied only in a Fairchild situation where the claimant has actually contracted the disease. In cases falling outside Fairchild, an increased risk of an unfavourable outcome is not damage upon which an action can be founded (Gregg v Scott [2005] UK HL 2).

If the basis of liability is the wrongful creation of a risk that the claimant will contract mesothelioma and the claimant has contracted the disease, the damage is the creation of the risk - not the disease itself. The wrongful creation of a risk is "divisible" damage even if the disease itself is not. Liability can, therefore, be apportioned according to the extent that the defendant contributed to the risk.

Fairness
Was it fair to characterise the damage in this way so as to open the door for apportionment?

The Fairchild exception was created because the alternative of leaving the claimant with no remedy was thought to be unfair. But did fairness require that the claimant should recover in full from any defendant liable under the exception? On the one hand, an employer might be held liable for damages he did not cause. On the other, there was a strong policy argument in favour of compensating those who have suffered harm at the expense of employers in breach of their duty to protect them against that harm.

In Lord Hoffmann's opinion, attributing liability according to the relative degree of contribution to the chance of the disease being contracted "would smooth the roughness of the justice which a rule of joint and several liability creates".

If liability is imposed jointly and severally, one defendant employer can end up paying more than its fair share. In many cases other relevant employers will be untraceable or insolvent so there will little or no chance of recovering any contribution. As time goes on, liability will be progressively imposed on a dwindling number of employers who might have only had a small share in exposing the claimant to risk but who happen to be traceable or solvent or insured.

Apportioning liability according to each defendant's contribution to increasing the risk avoids this problem and also deals with any issues of contributory negligence by the claimant.

How each defendant's liability should be assessed is a question of fact for the trial judge. Factors to be taken into account would include the length of exposure for which each defendant was responsible, the intensity of that exposure and, possibly, the type of asbestos involved.

In all three of these appeals, therefore, the awards of damages made by the lower courts were set aside and the claims remitted to the High Court or County Court as appropriate to redetermine damages by reference to the proportion of the risk attributable to the breach of duty by each employer.

Dissenting judgment
The dissenting voice on apportionment was that of Lord Rodger, who accused his fellow Law Lords of rewriting the decisions in McGhee and Fairchild. The analysis now adopted by the House of Lords "will tend to maximise the inconsistencies in the law by turning the Fairchild exception into an enclave where a number of rules apply which have been rejected for use elsewhere in the law of personal injuries". Apportionment would mean claimants ending up with only a small proportion of the damages normally payable for their loss. "The desirability of the courts, rather than Parliament, throwing this lifeline to wrongdoers and their insurers at the expense of claimants is not obvious to me".

Back to Top