1. b usiness services c onstruction & property i nsurance & indemnity l eisure m edia & technology p ublic sector r etail t ransport LUG Conference 2007 Non-traumatic harm: risk factors & legal issues Alistair Kinley & Vanessa Latham

2. overview Introduction Asbestos compensation – legal & judicial agendas Policy coverage & triggers (Bolton v MMI) Noise-induced hearing loss Asymptomatic conditions & pleural plaques Harassment & discrimination Conclusions

3. introduction By non-traumatic harm we mean conventional occupational disease risks and also psychiatric injury why is it topical? interest for insurers social issues Liability for psychiatric injury … is in general no different in principle from liability for physical injury … It is foreseeable injury flowing from the … breach of duty that gives rise to the liability. Scott-Baker LJ, Hartman v South Essex Mental Health [2005]

4. Asbestos compensation mesothelioma update - case law & legislation recent government activity claims numbers & claims handling

5. mesothelioma update ??ABC issueyearconsequence Fairchild v Glenhaven2002House of Lords decides on joint & several liability for multiple tortfeasors Barker v Corus2006House of Lords allows apportionment (discount) for unsued / untraced exposure Compensation Act2006statutory reversal of Barker v Corus, to re- impose joint & several liability FSCS reform2006for the first time allows FSCS to repay co- defendants and insurers & retains 90% pre-72

6. recent Government activity

7. current developments Child Maintenance & Other Payments Bill Draft CPR Pre-Action Protocol for Mesothelioma Claims? Fatal Accidents Act reform (Scotland as example)? a standardised judicial approach? Ministry of Justices damages consultation

8. claims numbers & claims handling

9. quicker handling draft CPR protocol, standardised judicial approach larger interim payments DWP reforms & draft CPR protocol more expensive claims DWP reforms will introduce CRU mechanisms retrospective costs DWP reforms (CM&OP Bill clause 49(3))

10. Policy coverage DivisiblePleural Thickening Asbestosis IndivisibleMesothelioma Lung Cancer

11. Divisible injury Defendant only pays for the period of their exposure Insurer pays only for the period on risk Holtby v Brigham & Cowan (2000)

12. Indivisible injury each defendant liable in full for a claimants damage, although a defendant can seek a contribution against another employer liable for causing the disease (Hoffman, Fairchild) Phillips v Syndicate 992 (2003) Insurer liable for full extent of Cs damages even though it only insured for part of Cs employers culpable exposure

13. ABI mesothelioma guidelines - EL Time based apportionment Pay and be paid. Apportionmentfirst by employer then by insurer Ignore void periods – no solvent employer and no insurer Gap period paid by solvent employer or if insolvent, by its insurer BUT Phillips

14. Policy Triggers Wording of policies differ Long tail claims – cause and effect can be many years apart. Mesothelioma - historically, EL coverage usually when the exposure occurred and PL, when malignancy occurs 10 years prior to symptoms.

15. Bolton v MMI and CU (2006) PL claim CU 1960-65 when injury/illness occurred MMI 1979-91 when injury/illness occurs Court of Appeal found that injury occurs when the malignancy develops or symptoms identified

16. Implication on Policy Trigger PL polices usually worded occurs so will be when malignancy occurs/symptoms develop EL policies post 1 January 1972 should state injury or disease sustained by employee and arising out of their employment so will be when exposure occurred. Pre-1972 policy wording varies – some which use wording occurs

17. Following Bolton caused – can you argue that cant be provide you caused it, just that materially increased the risk? Pre-1972 EL cover BAI, MMI, test cases US – Triple Trigger approach? Compensation Act 2006 Reinsurance position

18. Noise-induced hearing loss Long tail – reservoir of 20dB Divisibledose related and cumulative Noise related deterioration stop with exposure

19. Incidents of NIHL 1996 – 1.1 million-1.3 million people exposed to noise in excess of 85dB(A) Self-reported work related illness survey 2001/2002 – 87,000 in GB believe they are suffering from hearing problems caused or made worse by work The number of claims peaked in the 80s

20. Nottinghamshire Textile Cases General date of knowledge Noise and the Worker - June 1963 Code of Practise - 1973 Special or actual dates of knowledge Noise at Work Regulations 1989 and 2005

21. Nottinghamshire Textile Cases 7 Test cases Daily exposure 80-86bD (A) Breach- no general liability below 90dB(A) Diagnosis- History of exposure PLUS - notch on audiogram at 4kHz

22. Potential for Future Claims Insurers reporting increase New Legislation – Noise at Work Regulations 2005 New Areas of Litigationcall centres leisure industry motorcycles Acoustic Shock Syndrome

23. Asymptomatic conditions & pleural plaques

24. Pleural plaques Duty, breach, causation, loss Pleural plaques are asymptomatic, so what is the loss? The basic test case argument is, essentially: exposure + plaques + anxiety = £ compensation however, doesnt 0 + 0 + 0 = ?? House of Lords ruling expected before end of year Prospects of Government intervention thereafter? There was a lack of evidence of associated disability to justify adding pleural plaques to the list of prescribed diseases. - IIAC Annual report 2004/05

25. Asymptomatic conditions The focus for now is pleural plaques, and there was an unsuccessful amendment to the Compensation Bill The lodging in the body of a chemical or substance which may cause injury as a consequence of negligence or breach of statutory duty, shall give rise to a cause of action whether or not the lodging has caused symptoms at the time the action is commenced or brought to trial. Any other examples?

26. Harassment & Discrimination Protection from Harassment Act 1997 S1(1) A person must not pursue a course of conduct which he know or ought to know amount to harassment of another Criminal offence to breach s1 Damages for any anxiety and financial loss

27. Protection from Harassment Act Limitation 6 years Course of Conduct Harassment – criminal liability Foreseeability Quantum – Singh v Bhakar & Bhakar (2006)

28. Majrowski v Guys and St Thomas Vicarious liability course of employment Lister v Hesley Hall No defence for employer

29. Insurance Coverage EL policy Anxiety/distress – is this covered? Mental Anguish Intentional Acts PL Policy

30. Discrimination Sex Race Disability Sexual Orientation Religion/belief Age

31. Key Issues Time limits – 3 or 6 months Conduct must relate to status Foreseeability not required Damages for injured feelings - £500-£25,000 Costs

32. Employment Tribunal Statistics 115,039 claims in 2005/06 23,810 discrimination claims 4,383 successful at tribunal £10,807 - £30,361 average award 1,038 costs orders

33. Insurance Considerations Employment Practises Insurance EL Policy wording Injury to Feelings – is this covered? Intentional Acts Exclusion of claims arising solely out of the contract of employment PL Policy – DDA Service Providers

34. Conclusions There is a continuing political and judicial focus on UK mesothelioma claims We are entering a period of uncertainty regarding asymptomatic conditions Legislation against discrimination and harassment is drawing EL & PL insurers into unforeseen areas

35. b usiness services c onstruction & property i nsurance & indemnity l eisure m edia & technology p ublic sector r etail t ransport LUG Conference 2007 Non-traumatic harm: risk factors & legal issues Alistair Kinley & Vanessa Latham