England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT QUEENS BENCH DIVISION
ASBESTOS DISEASES

The Asbestos Diseases Court: a summary

1. The 'specialist mesothelioma list' at the Royal Courts of Justice was created some years ago by the former Senior Master, Master Whitaker. Its name has, over the intervening years, become misleading in that the two specialist Masters at the RCJ (myself and Master Eastman) hear all types of asbestos related disease claims, not limited to mesothelioma cases, and to the extent practicable we apply the 'show cause' process to them all. The procedures adopted are in some respects unique and not well known outside the specialist circle of solicitors and counsel (from all over the country) who appear in asbestos cases in London.
2. This judgment deals very briefly with a discrete issue which had been in danger of slowing up the progress of asbestos diseases claims nationally. To illustrate the importance of avoiding obstacles to efficiency in this court and also so as to explain the wording of the order which I have already informed the parties that I will make, I shall in the first section of this judgment set out a brief description of how the 'mesothelioma list' operates.
3. My preferred term is 'asbestos diseases court', because the procedure is not limited to mesothelioma (as 'mesothelioma list' might imply), and the nature of our unique procedural use of the CPR makes it more than merely 'a list', albeit that was its origin some years ago.
4. The issue in this judgment is that HMRC recently took the view (in a departure from previous practice) that they could not lawfully disclose HMRC employment schedules in respect of deceased persons outside the scope of issued court proceedings.
5. That created the serious problem that intending claimants could not obtain the employment histories needed to be able to identify and sue the correct tortfeasors. The issue was in danger of disrupting an otherwise smoothly operating process and hence, having conferred with Master Eastman, I decided to list this issue for hearing and to invite representations from HMRC and affected parties in sample cases in order to resolve the correctness or otherwise of HMRC's interpretation of the legislation relating to disclosure of the employment histories. APIL joined in as co-respondents so that they could be heard in view of the widespread significance of the problem.
6. In the event, only one of the two cases (Yates v HMRC) selected has remained, and that is in formal terms the application before the court, but the purpose of this judgment and the order arising from it is to clarify the procedure to be adopted where HMRC employment histories are needed for deceased asbestos claims in my, and Master Eastman's, lists in London. The approach set out in the order annexed to this judgment has been shown to Master Eastman and is agreed by us.
7. Before proceeding further I thank the parties and interveners for their cooperative approach, which is an example of the way in which parties in this jurisdiction do cooperate. We benefit from having expert legal teams on both sides in the litigation before us in this court and we are well served by them.
8. The parties have, ultimately, set aside differences as to legal interpretation and have asked me instead to set out an interim procedure for handling employment history requests, pending a forthcoming change in the law which the Government has now agreed to implement as a final answer. This judgment is therefore given on the basis of written submissions in lieu of the previously listed oral hearing, with the agreement of all involved.
9. The consequence is that I shall not, in this judgment, express conclusions on the original subject matter of the dispute namely as to whether or not the court has the jurisdiction to direct pre-action disclosure of HMRC schedules in deceased asbestos cases or whether the legislation under which HMRC operates has the effect of preventing it from giving such disclosure voluntarily outside of pending court proceedings.

The asbestos diseases court: an overview

10. Master Whitaker created the 'mesothelioma list' with a view to reforming this area of procedure and practice so as to speed up the doing of justice and to reduce both the cost and the use of judicial resources in asbestos-related disease claims. Such claims are still on the increase despite the far greater regulation of asbestos risk which exists in the UK, mostly because asbestos diseases are slow to develop and may emerge decades after the exposure to asbestos. There is still a great deal of asbestos present in the built environment.
11. The RCJ in London handles the bulk of asbestos claims irrespective of the geographic location of the parties, and the claims are assigned to myself and to Master Eastman. In a departure from normal practice at Central Office, such claims are heard flexibly and interchangeably by either of us as necessary and we access and modify each other's diaries as needed^[1]. By and large the unusual procedural approach adopted has achieved a significant change in the way in which these types of claims proceed, and greater efficiency. We hear and dispose of large numbers of such claims.
12. The underlying approach to asbestos claims places the doing of justice, at speed and with improved efficiency, at the forefront; formalities of procedure take second place if they interfere with that.

The nature of asbestos claims

13. In very many cases (and in all cases of mesothelioma), where a person has contracted an asbestos related disease, death is the consequence often following a short period, of some months, of decline and often unpleasant medical treatment which lengthens survival only by quite short periods. Regularly we see that claims either begin during life but then become deceased claims after issue, or begin as deceased claims on behalf of estates because the victim has passed away before matters could be got in hand. It is the latter type of case with which this judgment is mostly concerned.
14. Many claims which we hear are urgent and sometimes very much so. Most urgent are those which are 'living mesothelioma' matters where the essence of justice (for both sides) is avoidance of delay in the gathering of evidence during the life of the claimant, and if possible the resolution of the claim before the Claimant passes away.
15. Early resolution during life is widely accepted as being in the interests of justice in its widest sense as well as narrowly benefiting claimants and insured defendants alike. Many claims even in deceased matters are quite urgent because the age profile of the affected victims tends to be such that those left behind after the death of the asbestos-exposed person are themselves elderly.

Mechanisms of case management in asbestos claims

16. Each delay in a living asbestos claim has a penalty associated with it which is measurable as a proportion of the claimants in the system who will die without a claim being dealt with during that delay. Weeks lost imply lives ended without resolution of the claim, and that can also mean lost evidence which could have assisted either party. Yet where there is a properly arguable defence with a real prospect of success, the Defendant is entitled to a trial and it would be a serious injustice to a Defendant to deny it that right merely so as to ensure speedy hearing of claims, despite the often inevitable consequence that the Claimant will pass away before trial.
17. It is therefore unsurprising that the practice has arisen of making assertive use of our case management powers to streamline the process as far as reasonably and fairly possible. One of the first considerations one gives in timetabling a claim is 'how long does the claimant have to live?' which is a salutary yardstick for any judge and gives a human context to the notion of 'proportionate case management'. It will be no surprise that budgeting is often dispensed with in these unique claims due to the delay which it would cause in our packed lists.
18. As distinct from more conventional courts, we waive most aspects of procedural formality in favour of using technology and extensive^[2] direct access to the two specialist masters, by equally specialist solicitors, using email, an open-door policy, and a 'no nonsense' approach. Hearings are generally as informal as the circumstances permit (without of course departing from the law). Frequent use is made of evidence taken on commission at the home of the Claimant on an urgent basis. Almost all hearings are by telephone.
19. Parties are not discouraged from 'mentioning' claims or asking for a short hearing or a decision by email on matters arising, and it is seldom that a party is penalised for bringing a matter back for our attention in good faith. The starting presumption for our hearings is 'costs in the case' unless there is some real reason to penalise a party.
20. Administratively we try, where resources permit, to ensure that specialist staff assist us with the work of the court so that asbestos claims are effectively a separate channel of work within the system. Where an application is made it is expected to be by way of email either directly to one of the masters (sometimes in practice, to both), or channelled through our staff, and without the formality of drafting and issuing a Part 23 form and the delay of passing paperwork via the hard-pressed Masters' Support Unit. All we normally require is that the evidential and legal requirements for an application are met, rather than the strict form of a Part 23 application notice.
21. We set directions timetables on the understanding by all involved that the timings are very challenging. Missed time limits are not unusual albeit that of course there is no question of deliberately setting the parties up to fail. Very few 'Mitchell' applications arise because claimants and defendants alike are drawn from firms which cooperate with each other and any slippage is, bluntly, often because the timescales in such cases are exceptionally abbreviated. We usually permit parties to agree changes to timescales between themselves within reason, as long as the law permits, and this practice has also helped to avoid unnecessary cluttering of our list with relief applications.

The issue

22. It is no longer necessary for me to determine the issues which arose in this case in view of the pragmatic arrangement which has been agreed by the parties pending an anticipated change in the law which the Government has announced. I will however briefly summarise HMRC's objections to pre-action disclosure in an effort to ensure that it is clear exactly why the pragmatic solution has been adopted. Because matters were resolved when they were, detailed argument from the applicants in response to HMRC's position had not been served, and hence I will confine myself to HMRC's position before setting out the interim solution to the problem.

HMRC – argument on the Commissioners for Revenue and Customs Act 2005 (CRCA)

23. Here is the text of s.18 of the CRCA 2005:

"18 Confidentiality

(1) Revenue and Customs officials may not disclose information which is held by the Revenue and Customs in connection with a function of the Revenue and Customs.

(2) But subsection (1) does not apply to a disclosure—

(a) which—

(i) is made for the purposes of a function of the Revenue and Customs, and

(ii) does not contravene any restriction imposed by the Commissioners,

(b) which is made in accordance with section 20 or 21,

(c) which is made for the purposes of civil proceedings (whether or not within the United Kingdom) relating to a matter in respect of which the Revenue and Customs have functions,

(d) which is made for the purposes of a criminal investigation or criminal proceedings (whether or not within the United Kingdom) relating to a matter in respect of which the Revenue and Customs have functions,

(e) which is made in pursuance of an order of a court,

(f) which is made to Her Majesty's Inspectors of Constabulary, the Scottish inspectors or the Northern Ireland inspectors for the purpose of an inspection by virtue of section 27,

(g) which is made to the Independent Police Complaints Commission, or a person acting on its behalf, for the purpose of the exercise of a function by virtue of section 28 , [...]

(h) which is made with the consent of each person to whom the information relates [, or]

[

(i) which is made to the Scottish Ministers in connection with the collection and management of a devolved tax within the meaning of the Scotland Act 1998.

]

[(2A) Information disclosed in reliance on subsection (2)(i) may not be further disclosed without the consent of the Commissioners (which may be general or specific)

]

(3) Subsection (1) is subject to any other enactment permitting disclosure.

(4) In this section—

(a) a reference to Revenue and Customs officials is a reference to any person who is or was—

(i) a Commissioner,

(ii) an officer of Revenue and Customs,

(iii) a person acting on behalf of the Commissioners or an officer of Revenue and Customs, or

(iv) a member of a committee established by the Commissioners,

(b) a reference to the Revenue and Customs has the same meaning as in section 17,

(c) a reference to a function of the Revenue and Customs is a reference to a function of—

(i) the Commissioners, or

(ii) an officer of Revenue and Customs,

(d) a reference to the Scottish inspectors or the Northern Ireland inspectors has the same meaning as in section 27, and

(e) a reference to an enactment does not include—

(i) an Act of the Scottish Parliament or an instrument made under such an Act, or

(ii) an Act of the Northern Ireland Assembly or an instrument made under such an Act."

24. I shall quote the argument from the submissions to me:

"… the Commissioners are subject to a specific statutory regime in respect of the disclosure of information, contained in section 18 CRCA 2005. […]

13. […] Section 18(1) CRCA 2005 prevents the Commissioners from disclosing information held in connection with a function of the Revenue and Customs. By virtue of the transfer of functions […]^[3], section 18(1) CRCA 2005 is engaged in relation to the Requested Information. It is historic information concerning the operation of the National Insurance Fund which is a function of the Commissioners.

14. Section 18(1) CRCA 2005 acts as a gateway. Disclosure of information covered by that provision will only be lawful if one of the individual and discrete conditions set out in section 18(2) CRCA 2005 can be fulfilled.

15. Turning to those conditions, section 18(2)(a) provides a general exemption in respect of disclosure "for the purposes of a function of the Revenue and Customs". However, any disclosure made in response to an individual seeking an employment history would not be disclosure for those purposes.

[…]

16. […]

a. section 18(2)(b) is clearly not relevant as there in no question of the disclosure being public interest disclosure or disclosure to a prosecuting authority;

b. sections 18(2)(c) and 18(2)(d) are not relevant because the relevant proceedings are civil in nature (i.e. a claim in relation to industrial disease) but are not in respect of a matter in which the Commissioners have functions;

c. sections 18(2)(f), 18(2)(g) and 18(2)(i) are not engaged because disclosure would not be to any of the persons identified therein.

16. In so far as section 18(2)(h) CRCA 2005 is concerned, the Commissioners' position is that while this could in theory apply, as a matter of practice it is very unlikely to do so. The requests for employment history are being made for the purposes of bringing a claim against one (and very often more than one) ex-employer. The consequence of disclosure is that a personal injury claim is likely to be brought against those ex-employers. It cannot therefore be presumed that consent would be given. On the contrary, it seems very likely that consent would be refused.

[…]

17. The natural consequence of the analysis above is that the Commissioners will only be able to make a lawful disclosure of an employment history if it is made pursuant to an order of the Court under section 18(2)(e) CRCA 2005."

HMRC – argument on Data Protection Act 1998

25. HMRC agued that sections 7(1) and 8(2) DPA 1998 (which provide an individual with entitlement to his personal data) did not assist in this case. First, they argued that it was not the case that every piece of information contained in the Source Records would constitute "personal data" within the definition of section 1 DPA 1998. They argued that rights under s.7(1) were vested in the individual to which the data related and not to others, and this was bolstered by the fact that s.1 defined "personal data" as data relating to a living individual. Hence they concluded that since (a) the data subject was deceased and (b) there was no third party right under the DPA 1998, it was right to refuse disclosure under the DPA.
26. They further argued that the proper purpose of a DPA application was to determine whether it is being held and processed lawfully: see Durant v Financial Services Authority [2003] EWCA 1746 per Auld LJ at [27]; Ezsias v Welsh Ministers (unreported) at [52] to [53]; Elliot v Lloyds TSB Bank Plc (unreported) at [11]. On their case requests for employment histories were for a collateral purpose namely for bringing a claim against employers or others and not for the purpose for which the Act was intended.

HRMC – argument on jurisdiction of the court

27. Section 34 Senior Courts Act 1981 provides for the High Court to have the power to order disclosure against a person who is not a party to proceedings but who appears to have in his possession, custody or power, documents relevant to an issue arising out of the claim. That power must be exercised in accordance with such circumstances as may be specified in the rules, i.e. the CPR.
28. CPR r.31.17 provides the Court with a power to order disclosure against a third party. However that power is in terms of an order against a person who is not a party to the proceedings which (it was argued) assumes the existence of a pending, issued, claim.
29. Leaving aside CPR 31.17 the HMRC argued that the Norwich Pharmacal jurisdiction, as developed in the case law, was limited to orders for disclosure against persons 'mixed up in' the wrongdoing of others so as to facilitate the same, albeit innocently, and that there was no sense in which the HMRC by keeping the employment records it does, could properly be said to satisfy that test. Numerous cases were cited, most prominently Ashworth Hospital Authority v MGN Ltd [2002] 1 WLR 2033 on the point.
30. It was accordingly HMRC's position that, absent a change in the law, it would be necessary for there to be actual pending court proceedings for the court to gain jurisdiction to order disclosure of HMRC employment histories.

Developments since the application was issued

31. Since the commencement of this application and before APIL and the Applicant had provided their legal argument an amendment was proposed for inclusion in the Deregulation Bill. On 14 May 2004 it was proposed that an amendment be included in the Deregulation Bill to allow HMRC to disclose National Insurance Contributions Schedules to persons entitled to make claims under the Fatal Accidents Act 1976 and to persons entitled to bring proceedings for personal injury for the benefit of a deceased's person's estate or to persons claiming to be eligible under section 3 of the Mesothelioma Act 2014 for a payment under the Diffuse Mesothelioma Payment Scheme.
32. It is anticipated that that the Deregulation Bill will become law no earlier than the end of 2014. If a suitable amendment is passed in relation to asbestos claims this will remove the problem raised by this application for the future but it will remain a temporary obstacle to the progression of claims until the legislation comes into effect.
33. During these proceedings I was informed by the Mesothelioma Claims Policy Team at the Ministry of Justice that cross-government clearance has now been obtained for an amendment to be added to the Bill, relating to deceased victims of diffuse mesothelioma. I am not aware of the position as regards deceased persons in non-mesothelioma asbestos diseases matters.
34. For that reason the parties have, sensibly, asked me to provide a procedure for dealing with requests for HMRC employment histories in the interim. I have set out a suitable process to which the parties have agreed, in the annex to this judgment. It will be clear from that procedure that the means adopted is the issue of a claim against 'persons unknown' so as to ensure that the court has jurisdiction in principle to order disclosure against HMRC.
35. Thereafter in accordance with usual practice in the asbestos diseases court an application may be made by email via the specialist Masters or their staff and served on HMRC with the proposed draft order (a form for which is provided in this judgment) and a schedule of information to assist HMRC to trace the records. It is anticipated that provided the proper criteria for disclosure are met, the HMRC will not oppose disclosure and an order will be made.
36. The procedure approved by Master Eastman and myself necessarily only relates to the London specialist court at the Royal Courts of Justice and not to any other courts which may occasionally handle this sort of claim. I have annexed to this judgment the order in this case, a proforma draft for use in such cases and a form of schedule for HMRC purposes to facilitate the tracing of records at HMRC.

MASTER VICTORIA MCCLOUD

9 July 2014

To be handed down 17 July 2014. Permission is granted to release publicly before handing down.

Representation:

For the Applicant: Mr Stephen Glynn, counsel, and Mr Nick Story, solicitor, Messrs Boyes Turner, Abbots House, Abbey Street, Reading RG1 3BD.

For the First Respondent: Mr Ewan West, counsel, Monckton Chambers and Mr Sean Gabbitas, solicitor, Personal Tax Litigation, Solicitor's Office HM Revenue & Customs, 2nd Floor, Bush House, Strand, London, WC2B 4RD.

For the Second Respondent: Mr Stephen Glynn, counsel, and Mr Daniel Easton, solicitor, Messrs Leigh Day Solicitors, 25 St John's Lane Priory House, London EC1M 4LB.




ANNEX

HQ14X00565

IN THE HIGH COURT QUEENS BENCH DIVISION

ASBESTOS DISEASES

MASTER MCCLOUD

BETWEEN

Christine Yates (PR of the Estate of Gladys May Dalton, deceased)

Applicant

And
(1) Commissioners for Her Majesty's Revenue and Customs (2) Association of Personal Injury Lawyers

Respondents

ORDER

UPON considering the written submissions and evidence of all parties

IT IS ORDERED THAT

1) There be no order on the application save that the costs of the first Respondent be paid on the standard basis by the Applicant and Second Respondent, by consent summarily assessed in the sum of £1325.

2) The court approves the interim procedure set out in the first schedule to this order, to apply to asbestos disease claims relating to deceased persons proceeding (or to be issued) at the Royal Courts of Justice within the specialist asbestos diseases list. The court further approves the form of order for use in such cases set out in the second schedule to this order.

MASTER VICTORIA MCCLOUD

7 July 2014




FIRST SCHEDULE

Procedure to be applied where, in a deceased asbestos claim, the claimant seeks disclosure of the HMRC employment history of the deceased.

1) The Claimant shall issue a claim at the Royal Courts of Justice against Persons Unknown in relation to the relevant deceased asbestos claim.

2) The Claimant may then apply by email to either of the specialist asbestos Masters, for an order for disclosure by HMRC of the relevant employment history.

3) Consistent with asbestos court practice at the Royal Courts of Justice the said application need not make use of CPR Part 23 forms but the email must attach a witness statement in support setting out the grounds for an order for disclosure under CPR 31.17.

4) Attached to the email must be a draft order substantially in the form in the second schedule to this order, and a completed disclosure details form substantially in the form in the third schedule to this order.

5) The witness statement, draft order and completed schedule must be served on HMRC.

6) It is anticipated, by reason of the broad consensus reached in HQ14X00565 Yates v HMRC and APIL, that HMRC will not oppose the approval of the order for disclosure provided that the requirements of CPR 31.17 are met, and the court will generally proceed on the footing that unless objection is made to the court to the making of the order within 14 days of service of the application on HMRC, the order will be made.

7) This procedure shall cease to have effect in the event that legislative reform provides an alternative procedure.




SECOND SCHEDULE

IN THE HIGH COURT OF JUSTICE Claim No:

QUEENS BENCH DIVISION

BEFORE

BETWEEN:

[ ]

Applicant

and
THE COMMISSIONERS FOR HM REVENUE AND CUSTOMS

Respondents

[DRAFT] ORDER

UPON the application of [Applicant]

AND UPON reading the witness statement of [ ]

IT IS ORDERED THAT:

37. Pursuant to CPR Part 31.17 the Respondents will, within 28 days of service of this order, carry out a reasonable and proportionate search of records held by the National Insurance Contributions and Employer Office in order to compile an employment history of the individual identified and for the periods specified at Schedule 1 to this order;
38. The Respondents will, within 28 days of service of this order, disclose to the Applicant the information located or confirm that no relevant records have been found;
39. The Applicant pay the Respondents' reasonable costs, including the costs and expenses incurred in complying with this order; and
40. Either party may apply to the court at any time to vary or discharge this order.

Dated this day of 2014




THIRD SCHEDULE
Schedule 1 – Details of deceased person in respect of whom information is sought

Name
National Insurance Number
Date of Birth
Date of Death
Last known address
Employment history years required (post 1961)