England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE NEWCASTLE UPON TYNE COUNTY COURT
(His Honour Judge Walker)

		Royal Courts of Justice Strand London WC2 Wednesday, 12th June 2002

1. LORD JUSTICE WARD: Mr Justice Collins will give the first judgment.
2. MR JUSTICE COLLINS:George Green died on 5th April 2001 at the age of 59 as a result of mesothelioma caused by exposure to asbestos during his working life. Apart from a period of some three months in 1966, he worked continuously for Vickers in their shipyard at Barrow between 1958 and 2001. He worked as a fitter and spent much time on ships, and it was that work which provided the main exposure to asbestos.
3. There are in this case four defendants. The reason for that is that Vickers reconstructed itself, if I may put it that way, over the years and, although in reality so far as the claimant was concerned he was employed by one employer, in fact there were overall four different legal entities. The three months in 1966 when he was not employed by Vickers he worked for a firm called British Cellophane. He says in his statement that he has no recollection of being exposed to asbestos, but it seems that he told a doctor who examined him that he had had some exposure to asbestos during that short period.
4. In May 1997 he began to suffer chest pain. He went for an x-ray and it was discovered that he was affected by pleural plaques, which themselves had been caused by exposure to asbestos. At that time those plaques were benign and there was every chance that he would not develop any of the life threatening conditions that can result. The doctor who examined him indicated that there was in his view a five per cent risk that he might develop malignant pleural mesothelioma.
5. He instituted proceedings in the Newcastle upon Tyne County Court seeking interim damages for the pleural plaques from which he was suffering. In fact, what happened was that on 2nd June 2000, no doubt following negotiations between his solicitors and those representing the four defendants, a consent order was agreed and, because in the case of interim damages it is necessary to obtain a court order, that consent order was presented to the court and an order was in due course made. We are concerned with the construction of that consent order because, sadly, Mr Green did develop mesothelioma. By May 2000 he was suffering continual pain in his chest and tests thereafter showed the development of the mesothelioma. He in fact died, as I have indicated, in April and in July his widow issued proceedings against the same four defendants, relying on the consent which had been entered into on 2nd June 2000 to establish that she was entitled to damages from the defendants on the basis of full liability.
6. The defence admitted that the mesothelioma resulted from exposure to asbestos, but sought to raise causation as an issue on the basis that the claimant would have to prove which of the four defendants were responsible for the asbestos fibres which had caused the mesothelioma. The reason that matter was put in issue was largely because of the decision of Curtis J in the case of Fairchild. That decision, as is well known, was taken to the Court of Appeal and in December 2001 this court decided that, because mesothelioma was a condition which was caused by a single event (that is to say, a single asbestos fibre), it was necessary for the claimant to prove which of various defendants by whom he was employed and by whom he was exposed to asbestos was indeed responsible. In many cases it would be quite impossible for a claimant to establish that. The artificiality of that position is exemplified in this case because, although there are, as I have indicated, four separate defendants, in reality there was one employer and one insurer covering them all. There was, it is true, a separate employer for three months of his working life, but that really would have been de minimis in the context of the overall exposure to asbestos.
7. In any event, after some interlocutory skirmishing, in due course there was an application by the defendants for a stay of the proceedings. That came before District Judge Atherton on 10th October 2001. The learned district judge decided, first by consent, that Mr Green's widow should be substituted as claimant and should be entitled to bring proceedings under the Fatal Accidents Act. He further decided that in effect there should be judgment for the claimant on the basis of full liability and that there should be a trial, if such was necessary, on quantum only.
8. The defendants appealed to the circuit judge against that order. The appeal was based on the assertion that the district judge was wrong to have decided that the consent order meant that the claimant was entitled to judgment against the defendants on a full liability basis. The matter came before His Honour Judge Walker and he, on 14th December 2001 (as it happens, three days after the decision of the Court of Appeal in Fairchild), decided that the district judge was wrong and that causation was indeed still open. So it is that the matter now comes before this court.
9. It is necessary to set out the terms of the consent order because the resolution of this appeal turns upon the construction of that order. It reads, so far as material, as follows:

"UPON READING the correspondence from the Claimant's and Defendants' Solicitors and BY CONSENT the following terms of settlement, arrived at between the parties, are approved by and made by Order of the Court ----"

10. Pausing there, the reference to the correspondence is, we are told, a reference merely to the fact that the parties had written to the court asking for the consent order and that this had been done on the papers without the need for any attendance. The order continues:

"1That Judgment be entered for the Claimant for the sum of £4,000.00 (Four thousand Pounds) by way of immediate damages upon the assumption that the Claimant will not, at a future date, as a result of the acts or omissions giving rise to the cause of action herein, develop the following conditions or diseases, namely:-

(i)Bilateral diffuse pleural thickening caused by exposure to asbestos dust causing a significant respiratory disability; and/or

(ii)Asbestosis causing a significant respiratory disability; and/or

(iii)Lung cancer caused by exposure to asbestos dust; and/or

(iv)Mesothelioma caused by exposure to asbestos dust.

AND IT IS further Ordered that BY CONSENT:-

(A)If the Claimant, on a future date, does so develop the aforesaid conditions or diseases, or any of them, or does so suffer such deterioration, he shall be entitled to apply for further damages.

(B)That the Claimant do have the costs of the action up to and including entry of Judgment for provisional damages, such costs to be taxed on the standard basis if not agreed.

IT IS further directed that the following documents, specified in the Schedule hereto, shall constitute this case file herein and shall be lodged and preserved as material for any further assessment.

THE SCHEDULE

1.A copy of the Order made herein.

2.The Pleadings, consisting of Part 8 Claim Form.

3.The Agreed Statement of Facts.

4.The Medical Report of Dr A R Luksza dated 18 April 2000. The medical evidence is not agreed."

11. Then we have the agreed statement of facts, which reads:

"The Claimant, who was born on 12 May 1941, was employed by the Defendants at their premises at Barrow in Furness between 1966 and the present time (except for a 3 month break in 1966) as appears in the Claim Form herein.

In the course of the employment the Claimant was, on occasion, exposed to asbestos dust.

The Defendants have agreed to an award of immediate damages on a full liability basis. It has further been agreed that damages which may fall to be assessed in the future under the terms of the Order, shall also fall to be assessed on the same basis as the immediate award.

The immediate agreed award of damages covers all sequelae of the Claimant's exposure to asbestos dust whilst employed by the Defendants, save for any damage which may result from one or more of the conditions or diseases expressly referred to in the said Order. It is agreed that the Claimant has suffered from pleural plaques which are asbestos related."

12. The reason why the learned judge decided in favour of the defendants is explained at page 5 of the transcript of the judgment with which we have been provided. The judge says this:

"I am bound to say that my own view is that the defendant argument should prevail. Bearing in mind that ordinarily a Provisional Damages Order does leave open arguments of causation, and bearing in mind for instance the observations made in the Court of Appeal [that is, in the Fairchild case], one would normally expect that if causation arguments were to be excluded by agreement they would be excluded by very clear words. Putting it at its lowest it does not seem to me that the words `immediate damages on a full liability basis' are so clear as to the question of causation of the subsequent condition that they exclude those arguments which the defendants wish to raise."

13. Mr Rowe, who has appeared on behalf of the respondents before us, has submitted that this was a standard consent order in an interim damages case and it would be understood in such an order that causation remained open, and that included causation in all its forms. It is clear on the face of the order that whether the mesothelioma was caused by exposure to asbestos dust would clearly be a matter that had to be established if mesothelioma were to be suffered in the future. Equally, in relation to lung cancer the same would have to be established. Lung cancer is perhaps a more obvious example because lung cancer can be caused by many things other than asbestos exposure: for example, by smoking. It is said that that being so, the question of causation always remains open. He prays in aid the practice direction under Part 41 of the CPR, which deals with the question of interim damages and in paragraph 2.5, under the heading "Judgment for an award of provisional damages", states:

"Causation of any further damages within the scope of the order shall be determined when any application for further damages is made."

14. Although that specific paragraph is not directly applied in relation to consent orders, nonetheless it is clear that it must apply there as well.
15. Reference has been made to the decision of this court in Hurditch v Sheffield Health Authority [1989] QB 562. That was an early case in relation to provisional damages and dealt with a similar situation to the one before us. In that case there had been correspondence between solicitors and there was an argument as to what had finally been decided. The key to that case is to be found in what had actually been written. We find that at p.571G, where Purchas LJ quotes the relevant correspondence, in which the defendants' solicitor states:

"As you are aware and, we believe, concede, there was substantial exposure before the plaintiff joined the defendants' employment and our medical argument is that such symptoms as are currently displayed are wholly attributable to the previous exposure. Such symptoms as the plaintiff may seek to attribute to his exposure whilst in the defendants' employment are minimal but, that said, the defendants would not wish to cause any additional worries to the plaintiff and on that basis are prepared to put forward this offer."

16. That was again a pleural plaque case and the defendants there were quite clearly taking the view that it was sensible to pay a relatively small amount to the plaintiff on the basis that it might well not be the case that he developed the serious conditions in the future but, if he did, then was the time to dispute and to fight the issue as to who was liable and, if so, for how much. The correspondence quite clearly kept that open. So it was that the court inevitably decided that those matters remained at large and could be litigated if serious conditions in the end developed.
17. There is no question but that it is open to the parties in reaching a consent order to consent to what they will so far as future matters in issue in any litigation are concerned. If a defendant or a number of defendants wish to concede full liability, it is open to them to do so. If they wish to leave open any particular matters relating to causation, again it is open to them to do so. When one looks at this consent order as a whole one sees that in the reference to the various conditions which might develop there are matters of causation specifically referred to. Thus, as I have indicated, the lung cancer must be shown to have been caused by exposure to asbestos dust, as indeed must the mesothelioma, and that issue of causation is expressly referred to.
18. Then we find in the agreed statement of facts what seem to me to be the clearest possible words:

"The Defendants have agreed to an award of immediate damages on a full liability basis."

19. Mr Rowe accepts that, outside a consent order dealing with interim damages, that expression would mean what it says: namely, that the defendant accepts that he is fully liable to the claimant. It goes on:

"It has further been agreed that damages which may fall to be assessed in the future under the terms of the Order, shall also fall to be assessed on the same basis as the immediate award."

20. As it seems to me, the only sensible meaning of those words is that the defendants are accepting that if the claimant suffers from any of the conditions referred to in the consent order and establishes that that condition was caused by exposure to asbestos, he will receive damages on a full liability basis. So far as the mesothelioma is concerned, it is admitted in the defence that it was indeed caused by exposure to asbestos. Accordingly, as it seems to me, there is no issue of causation which remains outstanding so far as this particular order is concerned.
21. The reality is (and it is perhaps understandable) that the defendants appreciated that they might have a defence as a result of the decision in Fairchild and that it might be difficult, if not impossible, for the claimants to establish which of the legal entities by whom Mr Green was employed had been responsible for the mesothelioma, and thus they might be able to escape all liability. Mr Rowe suggests that those involved in these cases, both insurers and lawyers, would have anticipated in a consent order that all sorts of causation remained open. For my part I do not accept that at all. At the time this order was made the insurers did not believe that there was any point in seeking to resist full liability. That only arose later as a result of the decision in Fairchild. So it was that, understandably, they did not think it necessary to leave their position open, and they did not do so. They entered into an agreement which in my view means simply what it says: namely, that if the claimant develops the further conditions, or any of them, and establishes that they are caused by exposure to asbestos, he will receive the damages that are appropriate for that condition. In my view Hurditch establishes no point of principle. It was a case which decided that on the facts of that case the issues of causation, in the sense of whether any particular defendant was liable, were left open. In the context of this case that was not done and the consent order means that the defendants have no defence to this claim on the issue of liability.
22. In those circumstances I would allow this appeal.
23. LORD JUSTICE CLARKE: I agree.
24. LORD JUSTICE WARD: I also agree.
Order: appeal allowed with costs here and below, to be subject to detailed assessment if not agreed; order of District Judge Atherton of 10th October 2001 restored and judgment entered for the claimant against each of the defendants for amounts to be decided.