London and Bermuda Newsletter
On 17 October 2007, the House of Lords handed down their judgment in the conjoined appeals of Johnston v NEI International Combustion Limited, Rothwell v Chemical and Insulating Company Limited, Topping v Benchtown Limited and Grieves v FT Everard & Sons and others (“Johnston”). The House of Lords unanimously upheld earlier Court of Appeal decisions, affirming the position that compensation cannot be claimed in tort for the development of asbestos-induced pleural plaques. Actions for anxiety suffered as a consequence of developing pleural plaques were also dismissed. The reasoning behind the decision was that pleural plaques (areas of fibrous thickening of the pleural membrane surrounding the lungs), save in exceptional circumstances, cause no symptoms. It was decided that pleural plaques do not constitute damage, so there is no actionable injury. Instead, pleural plaques were viewed by the House of Lords as a signal, indicating that asbestos fibres had entered the lungs and pleura – a warning sign that asbestos-induced life threatening diseases, such as asbestosis or mesothelioma, may ensue. Deloitte are reported to have stated that the ruling will save UK insurers up to £1.4 billion.
Although it appears, after Johnston, that the final curtain has come down on claims for pleural plaques, Lord Scott left a chink in the curtain, suggesting that claimants may have a claim in contract against their employers, when pleural plaques develop further to inhalation of asbestos fibres at work.
There was also brief speculation as to whether the debate about compensation for pleural plaques would end up in the House of Commons; however, the Secretary of State for Justice has indicated that there will be no legislative proposals in response to Johnston.
Meanwhile, lawyers are busy preparing for a test case relating to mesothelioma claims, which will be heard in June. Six separate actions have been consolidated in this case, in which the court will be asked to decide on issues such as whether a claim for mesothelioma arises on inhalation of asbestos fibres, or on the onset of the disease. This will be an important decision for Employers’ Liability insurers as it will assist insurers in determining liabilities for previous policies issued, it will also serve as a guide to those drafting future policy wordings.