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David Pugh

David Pugh

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McDonald v National Grid

AWARE13/03/2015
Disease Aware Issue 6

The Supreme Court has narrowly found for the claimant in the mesothelioma case of McDonald.

The practical effect is to impose what almost amounts to strict liability in many cases - even where the asbestos exposure could not have been foreseen to be dangerous.

There are also uncomfortable implications for public liability cover and for some non asbestos cases.

Backgound

Mr McDonald was not employed by National Grid’s predecessors. He was a driver whose duties included visits to a power station, where he loaded ash. He would visit other areas of the power station.

On occasion, he witnessed others mixing and applying asbestos lagging. The first instance Judge described his asbestos exposure as, “at a modest level on a limited number of occasions over a relatively short period of time.”

By the Supreme Court hearing, the claimant had accepted that neither his employer nor the power station had been negligent. The case against the employer was dropped.

It continued against the National Grid based on breach of statutory duty. The claimant relied on two separate provisions - S2(a) of the Asbestos Industry Regulations 1931, and S47(1) of the Factories Act 1937.

The duties under both were imposed not on the employer, but on whoever operated the factory premises. In Baroness Hale’s words, they are, “in fact a species of occupiers’ liability.”

Provisions

Regulation 2(a) says that, “mixing or blending by hand of asbestos,” can only be carried out with exhaust ventilation, so far as is practicable.

S47 (1) says that practicable methods should be taken to reduce dust where it is, “likely to be injurious,” or amounts to, “a substantial quantity of dust of any kind.”

For both provisions it is the defendant’s burden to prove that appropriate steps were taken. The lapse of time between exposure and disease in most mesothelioma claims means that in most cases this will be impossible for defendants. If the provisions apply, liability will almost certainly follow.

On the 1931 Regulations, there were two main issues.

Did they apply to all factories, or just those in the asbestos industry itself?

Should ‘mixing’ be given a narrow technical meaning as again used just in that industry?

Three of the Supreme Court judges gave a broad purposive meaning to the regulations. They applied to all factories. They applied to all mixing by hand.

The other two judges said that the regulations were intended and designed only for the asbestos industry itself. This bare majority got the claimant home.

The picture on S47 is more complex. The section applies to persons employed for the purposes of the factory. Did it apply to someone in Mr McDonald’s position? Did the dust have to be substantial when it was created, or when it was inhaled?

On this part of the case, the Court was even more divided. All of them found that Mr McDonald was ‘employed’. Two of them found that he was not employed for the purposes of the power station - leading to an equal split as one of the judges declined to give a view. All five concluded that the dust only had to be substantial at the point of production.

What this means

This decision means that claimants are more likely to succeed in earlier exposure cases; those involving modest exposure before the generally accepted 1965 date of knowledge for mesothelioma.

To that extent the decision changes little - since that had been the generally understood position since the Court of Appeal case of Cherry Tree in 2001. The very tight majority suggests that this was an effort worth making for defendants.

Defendants can still defend against pre-1965 cases. If the process did not include mixing, Regulation 2(a) won’t apply. If the process was only occasional, the regulations as a whole won’t apply. If it can be proved that exhaust ventilation would have been impractical (perhaps where the work was outside), there may be a defence.

Section 47

The position on S47 is more troubling. This applies to all dusts and fumes, so would be relevant to silicosis claims, chronic bronchitis or even non asbestos cancer cases such as those in the Phurnacite decision.

The fact that ‘substantial’ is assessed by reference to creation rather than exposure makes it easier for claimants to win.

This aspect also raises the question of coverage - which has some importance.

Most individuals in Mr McDonald’s position would have to rely on public liability (PL) insurance. PL insurance is currently thought to trigger on an injury sustained basis - which would bring claims into far more recent policies which generally exclude asbestos liabilities.

If Mr McDonald is ‘employed’ for the purposes of the 1937 Act, might that mean that he would be covered under an employer’s liability policy?

Policy interpretation need not follow statutory interpretation, but the prospect remains.

With claimant success in the LASPO judicial review, insurers have now lost the first two of the asbestos decisions expected this autumn.

Two others remain - the Supreme Court’s view of the Welsh Assembly’s NHS charges for asbestos claims, and the IEG v Zurich partial cover case.

Substantial quantities of dust still have to settle before this asbestos year is out. Only time will tell how injurious that dust is to insurers.