It is now possible to seek compensation for pleural plaques in both Scotland and Northern Ireland, but not in England and Wales. How will this impact the insurance industry?
In October, a Supreme Court ruling found that the Scottish Parliament acted within its powers in making pleural plaques compensatable, thwarting a challenge by a group of insurers to the Damages (Asbestos-related Conditions) (Scotland) Act 2009. It was widely predicted that Northern Ireland would follow suit and, late last year, it was announced the Damages (Asbestos-related Conditions) Act (Northern Ireland) 2011 would come into operation in December 2011.
To say that pleural plaques is a controversial issue would be something of an understatement. The debate has centred on whether an individual with the condition has suffered physical harm. Insurers and defendant lawyers argue that as plaques are symptomless, they should not attract damages. Claimant lawyers, on the other hand, often point to the fact that plaques cause a physiological change and their presence can cause anxiety as a reason for compensation to be paid.
David Williams, claims and underwriting director for Axa Commercial, poses the question: “There are no symptoms and no suffering, so why should there be compensation?” He adds that plaques are only identified by x-ray, and they are merely evidence of an individual’s exposure to asbestos.
If there is no physical harm and plaques are symptomless, why should they be compensatable? Emma Costin, head of industrial illness at Simpson Millar, explains: “Pleural plaques are areas of calcified scarring on the lung lining. Occasionally sufferers report feelings of tight chestedness, particularly where areas of scarring are widespread. Pleural plaques are a signature of significant past asbestos exposure. It is widely known, particularly to those suffering with plaques, that asbestos is possibly one of the most carcinogenic naturally occurring substances.”
A source of anxiety
Costin believes, therefore, that a diagnosis of pleural plaques is a source of anxiety to sufferers who “fear the onset of a more sinister disease every time they cough or develop a cold”. She asks: “Why should a scar on the inside of the lung that is permanent not attract an award of compensation, when a scar on any part of the exterior of the body, even if it is not permanent, will?”
Certainly, plaques is an emotive issue, raising the spectre of more serious asbestos-related conditions. Michael Imperato, partner with New Law, says: “We shouldn’t underestimate the effect of being told that there is a physiological change in you and no matter how small your percentage chances are of developing more serious problems, people often fear the worst. They feel they are living with the sword of Damocles over them.”
Insurers are keen to explain they are not attempting to shirk their duties when it comes to compensation. Williams emphasises that the industry is proactive in dealing with sufferers of more harmful asbestos diseases, and points out particular investment has been made in tackling the fatal condition mesothelioma.
Whereas Alan Hunter, head of technical claims for Zurich, is concerned that developments around plaques have wider implications for liability insurance. “If it becomes acceptable for insurers to pay claims where people are not injured, then you substantially widen the parameters in which people can gain compensation,” he says.
“The basis that insurers work on in liability claims is effectively that if their insured is found to be negligent and someone is injured, then they have to pay. It is absolutely fundamental to what we do and insurers feel strongly about this. The medical evidence is that pleural plaques do not constitute an injury.”
Keoghs partner David Pugh points out that the status of plaques differs greatly outside the UK: “Australia does not give damages for pleural plaques. Australia is significant because it has about the same number of asbestos cases as the UK, despite its smaller population, largely because of the mining of asbestos. In addition, its legal system is closer to ours than the US.”
Explaining the position in the US, Pugh adds: “Because of concerns over cases being brought by a group often referred to in the US as the ‘worried well’, many individual states – for example Ohio – have brought in Acts requiring a certain level of disability before damages are paid, which would automatically exclude pleural plaques.”
Expert medical evidence
Historically, insurers in the UK paid compensation for plaques, so why are they reluctant to do so now? “Nobody knew about asbestos disease to the extent that we do now,” Williams explains. “Today, expert medical evidence shows plaques do not cause suffering. It wasn’t insurers that decided to stop paying — it was the courts in the UK, on the basis of there being no suffering.”
In light of the developments in Scotland and Northern Ireland, one of the most pressing issues will be the settlement of plaques cases that have been stayed. David Bywater, a solicitor within Kennedys’ occupational disease unit, says: “Each case will depend on its own facts. Some claimants’ conditions may have progressed to develop a further condition, while, for others, their symptoms won’t have changed.”
With a large tranche of claims to resolve there is likely to be a concerted effort to ‘clear the backlog’ before new claims materialise. However, there is a concern that the volume of stayed cases will take its toll on the speed of the process. “It is likely to be relatively drawn out simply because of the number of claims that are involved,” Pugh explains.
Gavin Deeprose, senior professional support lawyer at DLA Piper Scotland, adds: “It is likely plaques cases will remain stayed in the short term, while parties explore whether they can agree general guidelines on quantification of claims or alternatively whether a small number of test cases can be identified to establish guidelines.”
Deeprose adds that, if a guide on quantum can be established, a large number of claims could be settled relatively quickly. Otherwise settlement may take longer as individual cases are litigated through the courts.
However, there is consensus that the claims should now be processed as quickly as possible. “The courts in Scotland have invited insurers’ defendant lawyers and claimant lawyers to come together and discuss how they might move these cases forward, in the knowledge that they’ve been stayed for some time,” Hunter explains.
There is a sense that individual claims are unlikely to attract huge damages, but that the volume of claims will mean that total compensation will be high — at least initially. Bywater says: “Collectively, these claims will make a significant short-term impact as a large number proceed to settlement, but as pleural plaques is an asymptomatic condition, it is likely, in the absence of other conditions, they will not individually result in large payouts.”
As to precise sums, it is largely a question of wait and see, but Chris Gibson, manager at Garwyn’s Harrogate occupational disease unit, provides some context: “At this stage it is difficult to comment accurately upon the likely cost to insurers from this ruling. However in the Court of Appeal decision in Grieves v FT Everard & Sons (2006) the awards made for plaques, on a provisional damage basis, were in the range of £4000 to £6000. Applying the appropriate inflation factor these figures would become £5000 to £7500 at present day values.”
Imperato believes that, in opposing the Scottish legislation, insurers generated unwanted publicity. “They possibly scored an own goal, by raising the profile of pleural plaques in Scotland,” he suggests.
Costin adds: “The ruling is likely to generate publicity and increase the number of asbestos claims brought in Scotland, regardless of whether these are pleural plaques claims or claims for other asbestos diseases.”
The possibility of ‘forum shopping’ is also a cause for concern. Bywater cites Scotland as an example: “In this instance, if a potential claimant has had exposure in Scotland, they will be able to raise an action against all exposers. Likewise, if a claimant was exposed only in England but by a company with a place of business in Scotland, then the claim could be raised in Scotland.”
He adds: “However, even if the Scottish courts have jurisdiction there may be an argument that the applicable law is English law. The Treaty of Rome states that a claimant can bring a claim within any member state, but that the courts in that state must apply the law of the country in which the tort occurred. So, while a claim could be brought in Scotland for exposure in England, those courts should still apply the law of England for those elements.”
In the meantime, insurers continue to consider their next move. According to Williams, insurers may now take their case to the European Court of Human Rights. “That is currently under consideration and we have six months to decide,” he observes. Williams adds that insurers will need to balance the potential outcome against the possibility of negative press coverage. Again, it comes down to the problem of misconceptions. “People hear the word asbestos and immediately link it to mesothelioma.”
There is no doubt that this is an emotive
and controversial issue. Indeed, it appears to have split the UK – with very clear geographical divisions now in place dictating where pleural plaques cases will be compensatable.
What are pleural plaques?
Plural plaques are areas of scar tissue on the pleura. The pleura is a two-layered membrane surrounding the lungs and lining in the inside of the rib cage. In virtually all instances there are no symptoms and sufferers can live with them without having any long-term health problems.
If you have pleural plaques, it does not mean that: you will go on to get a more serious disease; you have a more serious disease at the moment; or you are likely to get a serious disease in the future.
While exposure to asbestos does carry a risk of developing a serious lung disease, such as asbestosis, mesothelioma or lung cancer, scientific evidence shows that having plaques does not increase that risk.
Pleural plaques are not the same as asbestosis and they are not a pre-malignant form of cancer. Plaques are caused by exposure to asbestos at some time in the past. This may be occupational exposure - in plumbers, electricians, building workers, gas fitters, carpenters - or maybe on people doing DIY.
Many industry experts have expressed concerns over the [prospect of forum shopping - the practice in which claimants look for the court most likely to provide a favourable judgment. Views are mixed regarding whether or not this is likely to become a significant issue in terms of pleural plaques.
Emma Costin, head of industrial disease at Simpson Millar: "It may become more prominent than is currently the case, but the majority of victims in at-risk occupations, such as ship building, did not move around the country to that great an extent and it is likely that overall only a small percentage of potential claimants will have the necessary link to the Scottish and Northern Irish jurisdiction."
Gavin Deeprose, senior professional support lawyer at DLA Piper Scotland: "Forum shopping is a real possibility. English and Welsh employees could raise proceedings in Scotland and Northern Ireland where they have been negligently exposed to asbestos there. Also, actions may be raised before the Scottish or Northern Irish courts where the negligent exposure occurs in England or Wales and the employer is domiciled in Scotland or Northern Ireland."
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