Express law No. 38

16 May 2006

Proportionate liability in mesothelioma claims

By a strong majority, the House of Lords (4-1) has
held that defendants in mesothelioma claims are only
severally liable for their respective contribution to
the risk of damage, but not jointly liable for the whole
damage.

Lord Hoffmann gave the leading majority view (agreed
to in separate speeches by Lords Scott and Walker, and
Baroness Hale); Lord Rodger dissented.

barker v Corus (UK) Plc

[2006] UKHL 20 (3 May 2006) (with concurrent other
appeals)

Significance

The decision creates new legal ground by now recognising
that, in the class of cases involving diseases such as
mesothelioma, proportionate liability is applicable to
tortious defendants, rather than joint and several liability.

Thus a defendant is only liable for that proportion of
the risk it created, not for the risks created by others
(whether another defendant or other party).

The policy basis stated in support of this included one
of fairness where, although the disease (mesothelioma)
is indivisible damage, the risk is divisible, and liability
should be limited as proportionate to the risk one has
created.

It was not disputed that mesothelioma was indivisible
damage.

Discussion

In a prior decision, Fairchild v Glenhaven Funeral
Services Ltd & Ors [2002] UKHL 22; [2003] 1 AC
32, the House of Lords held that a defendant was liable
for mesothelioma if it materially increased the risk
of injury. Some debate occurred as to what Fairchild precisely
decided. The majority recognised Fairchild as
creating an exception to the normal causation requirements.
That is, that case established that a defendant is liable
if it materially contributed to the risk of an injury
(mesothelioma), even though it could not be actually
proven that the defendant's act or omission caused the
injury.

Fairchild created this causation exception to address
the perceived injustice of a plaintiff exposed to asbestos
by successive defendants, but who (on normal causation
requirements) could not actually prove which exposure caused
mesothelioma (as science could not provide a definitive
answer). Thus:

  • Lord Hoffmann noted Fairchild imposed liability
    because a defendant's conduct may have caused
    the harm [40] and that case created a narrow exception
    to the causation requirements of single agent cases [64]
  • Lord Scott described Fairchild as imposing
    liability not because a breach of duty had caused
    mesothelioma, but that the breach materially contributed
    to the risk of contracting the eventual disease
    [53].

The defendants had argued that, because Fairchild broke
new ground in altering a causation test to favour plaintiffs,
a corresponding response was required to limit the boundaries
of that by recognising that a negligent defendant should
only be liable for its portion of creating a risk of injury.

The majority favoured that approach as the better development
of the law. Lord Hoffmann said [at 43]:

In my opinion, the attribution of 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. The defendant was a wrongdoer, it is true, and
should not be allowed to escape liability altogether,
but he should not be liable for more than the damage
which he caused and, since this is a case in which science
can deal only in probabilities, the law should accept
that position and attribute liability according to probabilities.
The justification for the joint and several liability
rule is that if you caused harm, there is no reason why
your liability should be reduced because someone else
also caused the same harm. But when liability is exceptionally
imposed because you may have caused harm, the same considerations
do not apply and fairness suggests that if more than
one person may have been responsible, liability should
be divided according to the probability that one or other
caused the harm.

Baroness Hale noted that there was no magic in indivisibility
of harm. If the harm were indivisible, she argued that
material contribution to risk could be divided [126]. The
issue was one of policy and she found it fair that a defendant's
contribution to liability in a Fairchild type case
(materially increasing the risk of harm) is in proportion
to the contribution it made to the risk of harm occurring
[127].

Lord Rodger, in a stern dissent, suggested that the majority
were rewriting Fairchild and 'spontaneously embarking'
upon an adventure to redefine the nature of damages suffered
by victims [86]. He saw the real reason for altering apportionment
as based upon solvent defendants being concerned about
insolvent defendants.

Lord Rodger would maintain the usual rule of liability in
solidum for a material contribution to an indivisible
injury.

Impact

The House of Lords has thus recognised exceptional requirements
in respect of causation and liability for single toxic
agent type cases involving indivisible damage (e.g. asbestos
fibre causing mesothelioma).

The Dust Diseases Tribunal of New South Wales has traditionally
held defendants jointly and severally liable for mesothelioma.
It is not strictly bound by the House of Lords, but will
no doubt view this decision as an authoritative one. Australian
courts may, however, adopt an approach that, absent (and
until) any similar decision by the High Court of Australia,
they would follow the current common law application of
joint and several liability.

AGS proposes to have discussions with counsel on whether
this House of Lords decision paves the way for possibly
arguing for proportionate liability in our courts for these
classes of asbestos cases.

Text of the decision is available at:
http://www.bailii.org/uk/cases/UKHL/2006/20.html

For further information please contact:

Peter Kozera
Senior Lawyer
Australian Government Solicitor
T 02 9581 7526 F 02 9581 7528
peter.kozera@ags.gov.au

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