ON APPEAL FROM THE HIGH COURT OF JUSTICE
(QUEENS BENCH DIVISION)
WYN WILLIAMS J
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE MOSES
LORD JUSTICE MCFARLANE
| DAVID BRIAN CHANDLER
|- and -
Mr Robert Weir QC, Mr Simon Levene & Mr Sudhanshu Swaroop (instructed by Leigh Day & Co.) for the Respondent
Hearing dates : 8-9 February 2012
Crown Copyright ©
Lady Justice Arden:
a) Origins of Cape Products' asbestos business
b) Relationship between Cape and Cape Products
c) Technical assistance given by Cape to Cape Products
d) Contemporary evidence which was said to demonstrate that Cape was involved with the health and safety of employees of Cape Products
e) Evidence as to Cape's involvement in the asbestos business of Cape Products
f) Events subsequent to the relevant period.
(a) Origins of Cape Products' asbestos business:
(b) Relationship between Cape and Cape Products:
i) On 20 March 1956, the board of Cape (not that of Cape Products) gave its approval to a separate administration at Uxbridge for dealing with all aspects of the management, production and sales of Asbestolux "in accordance with company policy". On one reading, this is inconsistent with Cape Products being able to be in charge of its own management systems.
ii) At all material times there was one or more directors of Cape on the board of Cape Products.
iii) Furthermore, most of the board meetings of Cape Products for which we have been shown minutes were held at Cape's Head Office in central London, rather than at the Cowley Works.
iv) On 17 July 1956, Cape decided to sell the assets of its asbestos business at Uxbridge to Cape Products and to change the name of Cape Products to its existing name: there could be no other reason for a sale followed by a change of name other than that Cape wished Cape Products to be seen as part of the larger Cape group.
v) Cape's board minutes for 25 April 1961 and 16 May 1961 confirm Cape Products' status as a member of the group. They refer to discussions taking place at Uxbridge for the expansion of Asbestolux production. The board minutes of Cape for 31 October 1961 additionally gave approval for increased Asbestolux production.
(c) Technical assistance:
(ii) Product development:
(iii) Health and safety issues:
"Cape…has provided its own medical surveillance."
(d) Contemporary evidence said to demonstrate that Cape was involved with the health and safety of group employees:
"THE CAPE ASBESTOS COMPANY LTD
Central Laboratory …Barking…Essex
Dear Dr Owen,
I very much enjoyed our day together at Uxbridge. Thinking over our discussion of the problem of the Asbestosis case at work, I remember that you mentioned carcinoma in the chromate industry. Can you let me know what the regulations are in this industry with reference to men continuing at work?
You will recall that you mentioned that grade 2 silicosis cases are allowed to continue. Can you quote me the regulations in these cases?
While we're all agreed that the case of Asbestosis must leave a scheduled department, I am not quite sure of the regulations requiring them to leave what Dr Bell calls 'the atmosphere'. Can you enlighten me on this one, so far as the regulations are concerned?"
"Dear Dr Smither
Thank you for your letter of the 26 October…
As you know there is no regulation in the Asbestos Industry Regulations 1931, which requires cases of asbestosis to be suspended from their further employment in scheduled departments. Although this is of course medically desirable.
I have sent you under separate cover a copy of the report by Dr. McLaughlin on the X-ray files we examined together. Further copies have been sent to Dr. McLaughlin and to Dr. Bell."
"Dear Dr. Owen,
Thank you for your letter of yesterday. I am most grateful for your references which I shall look up and study with care.
Dr. McLaughlin came to lunch at the Cape today, with Dr. Enticknap of East Ham Memorial Hospital and Dr. Holt of Reading University. We had a most interesting discussion on the pathology and carcinogenesis of asbestos. There is certainly a lot to be done on the subject if we are to find the answers to some awkward questions.
(e) Cape's involvement in the asbestos business of Cape Products:
(f) Events subsequent to the relevant period
The judge's judgment:
" On the basis of the whole of the evidence adduced before me I reach the following conclusions on balance of probability. First, throughout the period of the Claimant's employment with Cape Products the Defendant employed a doctor as a Group Medical Adviser. He was responsible for the health and welfare of all the employees within the group of companies of which the Defendant was a parent. I can think of no reason why his role was different from the role which Dr Browne assumed when he became Group Medical Adviser in 1978. Second, during the same period, the Defendant employed a Chief Chemist or Chief Scientist. That was Dr Gaze. Mr Hodgson's witness statement shows that Dr Gaze was involved in seeking out ways of suppressing dust from the time that Mr Hodgson commenced his employment with the Defendant and it is inconceivable that he was engaged in that activity solely in relation to the factories directly operated by the Defendant. Third, the correspondence between Dr Smither and Dr Owen in late 1961 establishes that Dr Smither was, in effect, involved in an investigation of a case of a person who had contracted an asbestos related disease at the factory at Uxbridge. Fourth, Cape Products "inherited" the working practices which the Defendant had adopted for the production of Asbestolux at the factory at Uxbridge. There is nothing in the minutes of the Board of Directors of Cape Products which suggests that any kind of change in working practices occurred in the years following 1956 and, in particular, during the time that the Claimant was employed by Cape Products. Fifth, many aspects of the production process (particularly that which involved substantial expenditure) was discussed and authorised by the Defendant's board. As and when it felt it appropriate the Defendant did control what Cape Products was doing."
" I end my discussion of the parties' submissions upon the law where I began. I must apply the three-stage test in Caparo. I must do so in the factual context that I have outlined in the preceding section of this judgment.
 On the basis of the evidence adduced before me I am satisfied that the Defendant had actual knowledge of the Claimant's working conditions. As I have said the Defendant produced Asbestolux at the Uxbridge factory until 1956. There is no basis for concluding that production practices changed in any significant way before or during the Claimant's period of employment. In particular, as is clear, Asbestolux was produced in a building which had no sides. Dust was permitted to escape without any real regard for the consequences. This was no failure in day-to-management; this was a systemic failure of which the Defendant was fully aware.
 The risk of an asbestos related disease from exposure to asbestos dust was obvious. Mr Feeny does not suggest otherwise. There can be no doubt that the Defendant should have foreseen the risk of injury to the Claimant. As I have said that is admitted.
 The Defendant employed a scientific officer and a medical officer who were responsible, between them, for health and safety issues relating to all the employees within the group of companies of which the Defendant was parent. On the basis of the evidence as a whole it was the Defendant, not the individual subsidiary companies, which dictated policy in relation to health and safety issues insofar as the Defendant's core business impacted upon health and safety. The Defendant retained responsibility for ensuring that its own employees and those of its subsidiaries were not exposed to the risk of harm through exposure to asbestos. In reaching that conclusion I do not intend to imply that the subsidiaries, themselves, had no part to play – certainly in the implementation of relevant policy. However, the evidence persuades me that the Defendant retained overall responsibility. At any stage it could have intervened and Cape Products would have bowed to its intervention. On that basis, in my judgment, the Claimant has established a sufficient degree of proximity between the Defendant and himself. At para 27 of the skeleton argument submitted on behalf of the Claimant the suggestion is made that in this case the degree of proximity between the Defendant and Claimant is central to the analysis of whether, on the facts, a duty of care was owed. I agree. The facts I have found proved in this case persuade me that proximity is established.
 No argument was advanced to me by Mr Feeny that if foreseeability and proximity were established nonetheless it was not fair, just and reasonable for a duty to exist. Had such an argument been advanced I would have rejected it. By the late 1950s it was clear to the Defendant that exposure to asbestos brought with it very significant risk of very damaging and life threatening illness. I can think of no basis upon which it would be proper to conclude in those circumstances that it would not be just or reasonable to impose a duty of care upon an organisation like the Defendant.
 In my judgment the three-stage test for the imposition of a duty of care is satisfied in this case. Accordingly, the Claimant succeeds in his claim."
i) Whether Cape was proved to have assumed responsibility for the safety of the employees of its subsidiary, Cape Products, so as to give rise to a relevant duty of care owed by Cape to Mr Chandler to prevent the exposure of which he complained; and
ii) Whether Cape was proved to be in breach of the relevant duty.
"[Cape] will admit that asbestos exposure in substantial concentration sufficient to create a risk of asbestosis was known to be foreseeably hazardous at the material time and that a person causing or permitting such exposure would be liable in respect to any relevant common law and statutory duties if the same were owed. "
Submissions on the law
Submissions on the facts
(1) Was Dr Smither a group medical adviser during the employment of Mr Chandler? The employment record of Cape Products for Dr Smither showed that he only became group medical adviser in 1963. On Mr Stuart-Smith's submission, the judge was not entitled to make a finding that he had become group medical adviser before that on the material before him. That consisted of evidence that Dr Browne gave evidence in 1994 in proceedings in the US indicating that Dr Smither succeeded Dr Wyers as soon as his post became vacant. However, that evidence was not wholly clear. Moreover, he expressed uncertainty about the date of that appointment in evidence at the trial of these proceedings. Cape seeks to challenge this date. Mr Stuart-Smith focuses on the fact that Dr Smither did not become an employee of Cape until 1963, and the fact that, when cross-examined in these proceedings, Dr Browne could not recall the actual date and said that it was at least as early as 1964. The judge accepted the date that Dr Browne gave in 1994.
(2) What was Dr Smither's brief? Mr Stuart-Smith submits that his function with Cape was to disseminate information about medical matters. His responsibility did not extend to safety. He did not have any function of ensuring that particular steps were taken. If he went further, it was only because he was pursuing his own research interests.
(3) What was Dr Smither doing when he wrote to the factory inspector? Mr Stuart-Smith submits that Dr Smither was really involved in this correspondence because he was on his way to becoming an international authority on asbestos. Although Dr Smither went well beyond what was necessary to protect employees, the question was still whether Cape had assumed responsibility for preventing Cape Products from exposing Mr Chandler to the risk of contracting asbestosis. The fact that Dr Smither was not employed by Cape would not prevent this happening. However, Mr Stuart-Smith submits that the exchange of correspondence did not contain any hint that Dr Smither controlled the procedures at Cape Products. He wrote from the central laboratory that other factories may also have had laboratories. In 1967 there was evidence that Cape had established a new group laboratory at Uxbridge. It was on Mr Stuart-Smith's submission only a scientific laboratory and not a medical laboratory. Dr Smither's interest was in diagnosis. He was not an occupational health doctor. The correspondence does not necessarily show that Cape was controlling Cape Products for the protection of its employees. Dr Smither may have been there because he had a personal professional interest. The reason for his going to Uxbridge does not appear.
"has adduced no positive evidence to demonstrate that a group policy in relation to such matters did not exist from the time that a group of company came into existence." (Judgment, paragraph 44)
Discussion and conclusions
"'Proximity' is, no doubt a convenient expression so long as it is realised that it is no more than a label which embraces not a definable concept but merely a description of circumstances in which, pragmatically, the courts conclude that a duty of care exists." (page 633)
i) The exchange of correspondence between Dr Smither and the factory inspector in October and November 1961: Mr Stuart-Smith describes this correspondence as "slim pickings" on which to impose a direct duty of care on Cape to Cape Products' employees. There are a number of points which arise out of this correspondence:a) Were these letters written by Dr Smither as group medical adviser? There is no job description in evidence for the group medical adviser but it seems reasonable to infer that Dr Browne's evidence in the US proceedings that, even in the period prior to Mr Browne's appointment, his function was to supervise medical care at each factory (I would add, when called on to do so for some reason), and for that purpose to visit each factory. There is a dispute about the exact date of Dr Smither's appointment as group medical adviser. In my judgment, the (handwritten) employment record is not a sufficient basis to overturn the judge's finding because, if the employment record were right, it would mean that, inexplicably, Cape had no group medical adviser in the period 1957 to 1963. There was no evidence about when the relevant entry in the employment record was made. Mr Stuart-Smith submits that the judge should not have found that Dr Smither attended the meeting with the factory inspector at Uxbridge in a management role as opposed to pursuing a personal research interest, especially since Dr Holt, the Uxbridge works doctor, was present. I do not accept that argument. If he had not attended as a representative of Cape he would have hardly written to the inspector on Cape notepaper on 26 October 1961.
ii) Erroneous finding as to the date on which Dr Gaze was appointed group chief chemist for Cape: Contrary to Mr Stuart-Smith's submission, there was evidence for the judge's finding on this point. Mr Hodgson, a chemist employed by Cape at its Barking factory from 1953 to 1971 signed a witness statement in 2002 in proceedings brought by the widow of a former employee against a company which was a successor to Cape Products (as well as being a member of the Cape group). Mr Hodgson stated that Dr Gaze was Chief Chemist at the Barking laboratory while he was there.
iii) Reversal of the onus of proof: Mr Stuart-Smith complained that the judge had reversed the onus of proof in paragraph 44 of his judgment (the material passage is set out in paragraph 50 above). I disagree. What the judge is referring to is merely the evidential burden of proof. Sufficient evidence had been produced to make it clear to him that the existence of a group policy on health and safety should be inferred from the known facts unless Cape could show that it did not exist.
iv) Reliance on subsequent events: Mr Stuart-Smith criticises the judge for taking into account evidence as to events subsequent to the relevant period. In my judgment, the position is as follows:a) In deciding whether to attach responsibility, the court has to look at the events at the time of the alleged assumption of responsibility. Subsequent events are in general irrelevant. In this case, there was a significant subsequent event in that the subsidiary became unable to meet its liabilities to Mr Chandler because it was dissolved. But that event is not relevant to the attachment of responsibility and must therefore be left out of account. The fact that the subsidiary subsequently went out of business is a totally irrelevant consideration. However, sometimes the evidence about subsequent events helps to confirm or clarify what was happening at the relevant time.b) I do not accept the submission that the judge should not have placed reliance on the evidence of Mr Hodgson about dust suppression monitoring at the Uxbridge factory from 1953 (judgment paragraphs 57 and 58).c) The criticism of the judge's reliance on the evidence of Mr Jock Sim, who only joined Cape in 1966, is also misplaced for two reasons. First, the judge had to cite Mr Sim's evidence that health and safety was not centralised and that each factory had its own work committee because Cape relied on it. The judge made the point that this evidence did not as a matter of law prevent the assumption by Cape of legal responsibility. Secondly, there was other evidence to support the conclusion in law that Cape had assumed liability, quite independent from that of Mr Sim. Therefore the evidence of Mr Sim could be used to confirm that conclusion, as it purported to do. On this appeal, Mr Weir relies on it for that purpose. In a passage quoted by the judge, Mr Sim stated in his evidence that Cape took considerable steps to ensure that working with asbestos was as safe as possible and produced instructions about measures which were in place before Mr Sim joined Cape. Mr Sim was giving evidence in other proceedings concerning a claim by an employee of a subsidiary. So the inference can properly be made, as the judge so held, that procedures issued by Cape would have been in place in factories owned by subsidiaries during the relevant period. However, reliance on such an inference is not essential to the overall conclusion in this case.d) In September 1962, after the conclusion of the relevant period, there was also a report that Dr Smither made to the board of Cape following a visit to South Africa. Mr Stuart-Smith submits that the judge was wrong to have regard to this as it was both subsequent to the relevant period and did not concern Uxbridge. But the board discussed dust suppression techniques. While Dr Smither was not apparently at this board meeting, these minutes disclose that it was appreciated that there was a relationship between dust suppression techniques and the diagnosis of asbestosis. In those circumstances the latter subject was unlikely to have simply been a personal research of his.
Overall assessment of the evidence
Lord Justice Moses:
Lord Justice McFarlane: