No harm done

While exposure to asbestos can have fatal consequences, the presence of pleural plaques has been proven to be asymptomatic. David Pugh and Michael Rawlinson look at how the UK is now falling into line with the rest of the world on compensating such cases

Insurers with asbestos liabilities have not been used to good news recently. Last year's Compensation Act, increased claim costs and policy trigger uncertainties have all darkened the asbestos horizon. But last week's pleural plaques judgment from the House of Lords brings clarity and tempers the rising costs of asbestos litigation.

Pleural plaques are well-demarcated areas of fibrous thickening normally caused by asbestos exposure and found on the pleura, the lining of the lungs. They are an entirely asymptomatic marker of asbestos exposure. Except in very rare cases, they cause neither pain nor disability and they cannot develop into another more serious condition, but they are the most common clinical manifestation following exposure to asbestos - with anything up to 16,000 new cases per year in the UK alone.

Impossible to defend

As with all asbestos claims, once insurance cover had been confirmed, plaques cases were easy to bring and almost impossible to defend. Transactional expense - especially claimant solicitors' costs - have frequently added significantly to insurers' outlay.

Four years ago, Aviva and Zurich decided to challenge the assumption that plaques came within the legal definition of injury. Test cases were heard in the High Court in 2004, the trial judge finding for the claimants. That decision was reversed by a majority in the Court of Appeal. The hearing in the Lords took place this summer.

Throughout, the claimants' legal team argued that the Lords should take account of all of the effects of the employers' negligence when deciding whether plaques could be regarded as compensatable. They made an early concession that plaques in themselves could not be regarded as an injury but this was discarded before the Lords hearing.

The claimants' legal team also relied on the claimants' anxiety, the plaques' status as evidence of occupational exposure and the claimants' risks of developing a more serious disease to argue that, taken as a whole, plaques should be regarded as compensatable.

The Lords rejected their arguments, agreeing with the defendants that the court could not combine several non-compensatable parts to make a compensatable whole.

The Lords have also said that psychiatric injury associated with pleural plaques cannot lead to an entitlement to compensation. One of the test claimants, Mr Grieves, had developed a psychiatric illness - though there was some indication that this was the result of a misdiagnosis. All five Lords decided that the well-known case of Page v Smith did not apply in these circumstances.

The defendants' team knew it was seeking to overturn a 20-year practice of awards - some quite high - for pleural plaques. It asked the Lords to return to basic principles and determine what legal loss - what real detriment - had been suffered by the claimants.

Stepping up a gear

There was every sign that, had it not been for their Lordships' favourable judgment, the claimant industry would have stepped up a gear. Claims farmers were already using so-called 'scan vans' - containing mobile CT scanning equipment, parked up in areas of high occupational asbestos exposure, especially shipyards. Those previously unaware of their radiological markers of asbestos exposure would submit to the health risks of a scan to see if plaques would be discovered. Claims would then follow based in part upon the claimants' anxiety over their newly discovered condition.

One of the lead claimants, Mr Rothwell, had accepted his GP's reassurance over his x-rays and only became anxious after responding to a claims farmer's advertisement. His evidence was that it was the very availability of damages that made him think he had a serious condition.

The Lords' decision brings England and Wales in line with much of the rest of the developed world, and Scotland will also be expected to abide by the Lords' decision. In very few comparable countries is compensation available for pleural plaques - whether as a court award or a social benefit. Courts across the US have increasingly become persuaded damages should be confined to those with symptomatic disease. In those states where courts have not taken this step, state legislators have intervened to impose thresholds of disability, often quite high, to be crossed before compensation can be awarded.

Australia, with a legal system closely modelled on the UK's and with a significant asbestos legacy, has never awarded compensation for those with asymptomatic asbestos conditions and very few European countries award compensation to those without symptoms.

Courts, claimants and insurers will continue to face the uniquely challenging issues of asbestos litigation. In the pleural plaques decision at least, insurers appear to have brought certainty to this complex area of the law.

David Pugh is a partner at Halliwells and Michael Rawlinson is a barrister at Kings Chambers. Both were on the defendants' legal team.

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