Provisional damages - familiarity breeding contempt?

Asbestos specialists face regular claims for provisional damages. Claimants generally seek conditions which pivot around four deteriorations or future…

Asbestos specialists face claims for provisional damages on a daily basis. Claimants generally seek standard return conditions which pivot around four deteriorations or future risks which have become accepted as arising from asbestos exposure. Drafting Particulars of Claim has become almost a pro-forma exercise. It may have become commonplace to some Defendant practitioners to draft standard Defences and to agree terms of Consent Orders without a second glance, but by mirroring the Claimants’ complacency, it seems the purpose of provisional damages has been lost along the way. Let us remind ourselves of the law relating to provisional damages, the circumstances in which they can be claimed and the importance of ensuring appropriate return conditions.

Section 51 County Courts Act 1981 and Sections 32A and 34A Supreme Courts Act 1981 enshrine the Court’s discretionary power to award provisional damages in circumstances where there is a chance that at some time in the future the injured person will, as a result of the act or omission giving rise to the cause of action, develop some serious disease or suffer some serious deterioration in his physical or mental condition. This allows the Court to award the injured person:

a) Damages assessed on the assumption that the injured person will not develop the disease or suffer the deterioration in his condition; and

b) Further damages if at a future date he develops the disease or suffers the deterioration.

The Court cannot impose a provisional award upon a Claimant. It is entirely a matter for the Claimant as to whether he wishes to opt for a provisional award. Cowan v Kitsons Insulation [1992] PIQR 019.

Claimant and Defence practitioners alike are sometimes ignorant of the fact that a default judgment cannot be obtained in a provisional damages claim unless the Claimant abandons his claim for provisional damages. In such circumstances, the Claimant should apply for directions in accordance with Part 23 CPR.

Rules 41.2 and 41.3 CPR 1998 set out the practical framework for provisional damages claims. The Practice Direction to Part 41 fleshes out exactly what the provisional damages Order should contain and the documents which must be preserved as the case file in the event of a return claim. The Order must:

  • Specify the disease or type of deterioration which will entitle the Claimant to apply for further damages if they occur at a future date;
  • Give an award of immediate damages;
  • Specify the period in which an application for further damages may be made; and
  • Direct what documents are to be filed and preserved as the case file in support of any application for further damages.

As complacency sets in, the boundaries as to what constitutes a “serious deterioration” become blurred. In Willson v MOD [1991] 1 All ER 638, Scott Baker LJ stated it was necessary to consider:

a) Whether it was proved there is a chance of some serious deterioration in the Claimant’s condition, and

b) Whether the Court should exercise its discretion in favour of the Claimant in the circumstances of the case.

He clarified that the “chance” must be measurable rather than fanciful. To satisfy this, we see the measurement of future risks by medical experts in percentage terms in medical reports in asbestos claims. Scott Baker LJ offered the guidance that a “serious deterioration” means something beyond ordinary deterioration. Taken to its limit, there is scope for the proposition that low level asbestosis or pleural thickening sufferers with minimal future risks of progression should not be permitted to return to Court for further damages in case of deterioration of those conditions. How can such deterioration be viewed as beyond ordinary deterioration? Weightmans have recently, successfully limited return conditions solely to asbestos related lung cancer and mesothelioma in just these circumstances. In doing so, it was necessary to remind the Claimant and the Court of the rationale behind provisional damages and of the meaning of “serious deterioration”.

Caution should be exercised when setting time limits for return claims. It is becoming increasingly common for Claimant’s solicitors to seek to reserve rights for the Claimant’s Estate in the event of death. The Court has no power to grant a declaration reserving rights to an Estate. The Law Reform (Miscellaneous Provisions) Act 1934 and the Fatal Accidents Act 1976 enshrine the rights of the Deceased’s Estate to bring such a claim. Such rights do not need to be rehearsed in any order for provisional damages.

The practical effect of going back to basics with these principles can only benefit Defendants and Insurers alike. By limiting return claims only to malignant diseases provides greater certainty in terms of future reserves. The possibility of two bites of the cherry, for example worsening asbestosis and then developing lung cancer, is removed. The costs benefits of avoiding such multiple return claims are evident.

Whilst provisional damages claims are seen as fast track money spinners to Claimants, the reality for Defendants is that they cannot be looked on with scorn. Casting your eye to the future now when assessing appropriate return conditions can avoid any unintended consequences that over-familiarity with provisional damages may bring.

Victoria Douglas, Associate

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