Forum shopping in asbestos claims | Inner House of the Court of Session overturns decision

In March this year Lord Tyre was asked to determine a dispute over the applicable law in an asbestos claim. The pursuers argued that it was Scots law,…

Inner House of the Court of Session overturns decision prioritising location of manifestation over place of exposure in determining jurisdiction in an asbestos case.

James Docherty’s Executors & Ors v Secretary of State for Business, Innovation and Skills [2018] CSIH 57

Executive summary

In March this year Lord Tyre was asked to determine a dispute over the applicable law in an asbestos claim. The pursuers argued that it was Scots law, as it was in Scotland that the exposure to asbestos in the employment of the defenders occurred. The defenders argued it was English law, because it was in England that the disease developed and where the deceased died. Lord Tyre favoured the defenders’ position and dismissed all but one of the pursuers’ claims. The pursuers appealed and the decision has this week been reversed.

Facts

Twenty three relatives of the late Mr James Docherty (“the deceased”) raised proceedings against Scotts Shipbuilding and Engineering Company (“the Company”). They claimed damages for the death of the deceased due to alleged exposure to asbestos dust between 1941 and 1947 in the defenders’ yard in Greenock, Scotland. The action was raised against the Secretary of State as the person responsible for the liabilities of the Company. Liability was disputed.

The deceased first experienced respiratory symptoms in around 2003. In 2009, he had a CT scan which revealed basal bronchiectasis with fibrosis and mild pleural thickening. At the date of the diagnosis and in the lead up to his death, the deceased was living in England. Proceedings were raised by the deceased’s widow as an individual and on behalf of the deceased’s estate, together with twenty three relatives of the deceased. It was acknowledged by those acting for the pursuers that the proceedings were raised in Scotland because the Damages (Scotland) Act 2011 allowed the relatives to make claims which would not have been permitted under English Law. 

The case was taken to debate on the issue of the applicable law. Lord Tyre favoured the defenders’ position that location of manifestation of symptoms was the determinative factor and dismissed the relatives’ claims.

Inner House decision

The Inner House expressed concerns regarding the consequences for both prospective defenders and pursuers if the decision were allowed to stand. For defenders, it was highlighted that they may be operating exclusively in Scotland and yet find themselves facing a claim governed by the law of a country with which they had no prior connection. For pursuers, it was pointed out that a person who had worked in Scotland and sought to claim against his employer, could be deprived of a claim for damages by moving to a foreign country where the law differed.

The Inner House was clear in its view that the law to be applied in these claims is where the harm took place. In this case, Scotland. The Company’s shipyard was located in Scotland. The deceased was employed there. That was where he was allegedly exposed to and inhaled asbestos dust. The Inner house reasoned that as a consequence of those facts the Company was bound, but also entitled, to conduct their operations by reference to the requirements of Scots law. Therefore, they could not complain if they were held responsible for a failure to comply with those laws. By contrast, they would have grounds to complain if they were held responsible by reference to the laws of some other system, which they could not have foreseen applied to them at the relevant time. The Court considered it only fair and rational to hold a defender accountable for a breach of duty if, at that time, they were aware that they had to comply with it. As for pursuers, they ought to be entitled to look to Scots law for the protection of their interests, including their interests in bodily integrity, and entitled to the benefit of such remedies in Scots law in the event of those interests not being properly protected.

Against that background, the Inner House has unanimously overturned the original decision.

Commentary

This decision brings the law in Scotland in these types of claim back into line with the rest of the UK. It mirrors the approach taken by the Supreme Court to broadly the same issue in the EL Trigger litigation (BAI (Run Off) v Durham [2012] UKSC 14). Place of exposure is the key feature when considering the applicable law.

The downside to this decision from an insurance perspective is that forum shopping is likely to continue, particularly in fatal claims. The Damages (Scotland) Act 2011 will remain an attractive draw for claimants south of the border due to the higher levels of damages and broader spectrum of relatives that can claim.

It remains to be seen whether the defenders will look to appeal this decision to the Supreme Court. 

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