Forum shopping in asbestos claims

Court of Session ruling prioritises place of manifestation above place of exposure when determining legal jurisdiction in a recent asbestos case.

George Docherty & Ors v Secretary of State for Business, Innovation and Skills [2018] CSOH 25

Executive summary

A recent Court of Session decision was required to determine the following question: “Where a man, while working in Scotland, inhales asbestos fibres that cause injury to his body after he has become resident in England, which law is applicable to determine the admissibility of claims for damages made by his executors and relatives after his death?”

Facts

Over twenty relatives of the late Mr. James Docherty raised a claim for damages following his death in September 2011 as a result of asbestos exposure. It was alleged that the deceased was exposed to asbestos dust whilst employed by Scotts Shipbuilding and Engineering Company (“the Company”) as a mechanical fitter in Greenock, Scotland from 1941 to 1947. The action was raised against the Secretary of State as the person responsible for the liabilities of the Company. Liability was disputed.

The deceased began experiencing respiratory symptoms from around 2003 and in September 2009, a CT scan disclosed that he had developed basal bronchiectasis with fibrosis and mild pleural thickening. At the date of diagnosis, and immediately prior to his death, the deceased was resident in England. The court action was raised in 2014 and it was conceded by those acting for the pursuers that the claim was raised in Scotland because the Damages (Scotland) Act 2011 permitted the deceased’s relatives to make claims which would not have been permitted under English Law. The matter was called before the court for a legal debate on the applicable law for the dispute where the defenders argued that English law was the governing law, while the pursuers contended that it should be the law of Scotland.

Decision

Lord Tyre determined that the Rome II Regulation (no 864/2007) (“the Regulation”) on the applicable law of non-contractual obligations had no application to the present case and was of no assistance. Pursuant to Article 31 of the Regulation, the event giving rise to damage was the alleged negligent exposure of asbestos. As the Regulation was not in force at the time of the deceased’s alleged exposure it could not be used to determine the applicable law.

Determining the matter under common law, his Lordship highlighted the important principle that a cause of action for reparation does not arise unless and until there has been both a wrongful act and a resultant injury. It was held that since having an injury is an essential part of an actionable claim, the place of the harmful event which gives rise to an action must be determined by reference to where the injury takes place and not necessarily where the alleged negligent act occurred if that place is different.

It was held that, although the alleged breach of duty had occurred in Scotland, the deceased’s injury had developed while he was resident in England and, as such, any claims arising for loss and damage fell to be determined under English Law. Therefore the Court dismissed the action based on the Damages (Scotland) Act 2011 meaning that all but one of the pursuers’ claims were dismissed. The remaining claim was made on behalf of the executors of the late wife of the deceased.

Commentary

Whilst this will be a welcome decision for defenders who are faced with pursuers seeking to forum shop to optimise the level of damages, it may be considered to be difficult to reconcile with the Supreme Court’s decision in the EL Trigger test cases (BAI (Run Off) v Durham [2012] UKSC 14). Furthermore, his findings somewhat go against the insurance market practice of approaching the relevant jurisdiction as the place of exposure rather than the place of manifestation of the condition.

In the EL Trigger cases, the Supreme Court determined that an employers’ liability policy is triggered at the date of exposure to asbestos rather than the date of diagnosis of an asbestos related condition. Whilst the manifestation of symptoms occurs much later, the Supreme Court considered that the injury or disease was “sustained” by an employee in the period when it was caused or initiated for the purposes of employers’ liability policies.

It is therefore of no surprise that the pursuers have sought to appeal Lord Tyre’s decision and it will be interesting to see what the Inner House of the Court of Session makes of the competing arguments made by both parties.

If you have any questions or would like more information about our legal update, please contact Pamela Stevenson (Partner), or Callum MacKinnon (Solicitor) on 0141 375 0861 (callum.mackinnon@weightmans.com).

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