Blog: The Sonae group action and the compensation culture

In June 2011, a fire broke out at Sonae Industria's particle board manufacturing plant in Knowsley, near Liverpool. A plume of smoke, fumes, chemicals and particulate matter rose from the site.

Four years later, Mr Justice Jay heard 20 test claims, selected from 16,626 personal injury claims.

The defendant Sonae conceded breach of duty, but causation and quantum remained in dispute. The claimants sought to persuade the court that it was sufficient for them to prove that the breach of duty materially contributed to the risk of injury. However, the 30 July judgment maintains that the claimants had to prove, on the balance of probabilities, that they were within the relevant envelope of material risk. The plume modelling evidence showed that a small number of claimants were close to being within the scientific envelope of risk, and then for relatively brief periods.

Not one of the claimants received damages. The court ruled that they all failed to establish significant exposure and that their symptoms did not exceed the hurdle set by the law for actionable personal injury claims to succeed.

Furthermore, the judgment criticised the conduct of the claimants' solicitors. Some had set up pop-up shops and cold-called for potential claims. They asked leading questions in their standard form questionnaires. One claimant was told that he would face a personal costs liability if he did not continue to pursue his claim. Another one was told that other claims had already succeeded and received damages. This was incorrect, as no claims had been paid.

A fee earner from one firm of solicitors was called to give evidence, and failed to persuade the court that the signature on a statement of truth was not a fake. The conduct of the solicitors for some of the claimants was so questionable that it has been referred to the Solicitors' Regulation Authority for further investigation.

The Trades Union Congress and the Association of Personal Injury Lawyers assert that there is no compensation culture in the UK. In a joint report entitled The Compensation Myth and published in March 2014, they note that workplace claims have halved in the previous ten years.

However, the Sonae group action and the behaviour of some of the solicitors support the view that the claims culture does exist. The fine imposed earlier this month on The Hearing Clinic for speculative cold-calling reinforces that impression.

Of the 16,626 claims that were presented following the Knowsley fire, all failed. Following the judgment of Mr Justice Jay, the solicitors are left out of pocket and may face regulatory sanction; and the message ‘Don't try your luck' should ring in the ears of those tempted to pursue similar actions.

By David Williams, partner in the casualty claims team at DAC Beachcroft