Scottish Court of Session Decisions

You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Irvine v. Arco Atholl Limited & Anor [2002] ScotCS 48 (20th February, 2002)
URL: http://www.bailii.org/scot/cases/ScotCS/2002/48.html
Cite as: [2002] ScotCS 48

[New search] [Help]

Irvine v. Arco Atholl Limited & Anor [2002] ScotCS 48 (20th February, 2002)

OUTER HOUSE, COURT OF SESSION

OPINION OF LORD MACKAY OF DRUMADOON

in the cause

JAMES HUNTER IRVINE

Pursuer;

against

ARCO ATHOLL LIMITED

Defenders;

and

CGU INTERNATIONAL INSURANCE PLC

Third Party:

________________

Defenders: Glennie Q.C.; Henderson Boyd Jackson, W.S.

Third Party: Moynihan, Q.C., Weir; Simpson & Marwick, W.S.

20 February 2002

Introduction

Over a period of two years, between 1957 and 1959, the pursuer was employed by the defenders. He worked at their factory premises in Robertson Street, Glasgow. Around that time the pursuer had approximately 25 fellow employees, based in Glasgow and at the defenders' premises in Stockport. In the late nineteen fifties the defenders were known as "The Atholl Asbestos and Rubber Company Limited". The business they carried on at that time involved their employees working with asbestos. In May 1998 the pursuer was diagnosed as suffering from a malignant mesothelioma. On 12 July 1999, he raised the present action against the defenders. In this action, the pursuer sought reparation from the defenders. He claimed that his mesothelioma had been caused by his exposure to asbestos, in consequence of fault and negligence and breach of statutory duty on the part of the defenders.

On 7 June 2000, the defenders convened CGU International Insurance plc as a third party to the action. That occurred because there was a dispute between the defenders and the third party as to whether the latter was bound to indemnify the former, in respect of any sums the defenders were found liable or agreed to pay the pursuer in settlement of his claim for damages. In the event, the action, as between the pursuer and the defenders, has been settled. The details of what the defenders have paid to the pursuer have not been disclosed to the Court. It is agreed, however, that such details are set out in a letter dated 20 September 2001, which the defenders' solicitors, Henderson Boyd Jackson W.S., have sent to the third party's solicitors, Simpson and Marwick W.S..

The dispute between the defenders and the third party arises in the following circumstances. The defenders claim that throughout the period they employed the pursuer, White Cross were their employers' liability insurers. The defenders convened the third party because they claim that the third party has assumed the liabilities of White Cross. The third party admits that it has assumed those liabilities, as a consequence of a series of company take-overs and amalgamations. What remains in dispute, however, is whether White Cross were the defenders' employers' liability insurers during the period when the pursuer was employed by the defenders. That was the factual issue that went to proof before me. It is agreed that, if I hold that White Cross Insurance Ltd. ("White Cross") were the defenders' employers' liability insurers, during the period the defenders employed the pursuer, the third party will indemnify the defenders in respect of the sums specified in the letter of 20 September 2001, together with interest on those sums at the rate of 8% a year, from the date of payment of those sums to the pursuer until the date of reimbursement by the third party.

The defenders have long since closed their factory premises in Glasgow. They are now, in fact, a dormant company. In such circumstances and in light of the fact that the proof was concerned with the events of over 40 years ago, it is hardly surprising that the evidence available to parties is somewhat limited in scope. I should, however, summarise the evidence that I heard. I begin with the evidence the defenders led from six witnesses.

The defenders' evidence

George Watson is the company secretary of Arco Limited. That company acquired the defenders in 1972. In 1978 the defenders changed their name to Arco Atholl Limited. The defenders subsequently became a dormant company, which they remain. They retain their registration with the Registrar of Companies and submit statutory returns ever year. Since 1988, Mr Watson has carried out such administrative duties as the continued existence of the defenders requires. He stated he was unaware what has happened to all the books and records of the defenders, dating back to the time when they traded. The only documents that still exist are those statutory records that any registered company must maintain. Mr Watson has searched through those statutory records. They do not contain any reference to insurance policies taken out by the defenders. Nor are there any ledgers in existence, dating back to the late nineteen fifties.

Since around 1970, Mr Watson has been involved in arranging insurance cover for Arco Limited. The defenders, themselves, no longer maintain any separate insurance cover. As a subsidiary company, they are covered by the policies of Arco Limited. On the basis of his experience of arranging insurance cover for Arco Limited, Mr Watson gave evidence that it was not likely that a company, such as the defenders, would have changed its employers' liability insurers on a regular basis. He considered that any policy arranged would probably have remained in existence for several years. In his opinion, there would require to have been some good reason for making a change, such as cheaper premium rates, a change in ownership of the insurers, problems with the handling of claims or a wish on the part of the insured to bring all of their insurance policies under the one roof. During cross-examination, Mr Watson confirmed that the Copy Proposal Form (No.7/10 of Process), to which I will refer in detail later, had not been found within the records of the defenders of Arco Limited.

George West worked as a foreman at the defenders' premises in Glasgow. He gave evidence that the pursuer had been employed by the defenders, over a period of approximately two years between 1957 and 1959. At the conclusion of his evidence, senior counsel for the third party stated that the third party accepted that the pursuer had held such employment.

Ronald Hutchinson, who is aged 79, was employed by the defenders between 1951 and 1979. Throughout that period of time he was based at Stockport in Cheshire. Around 1953/1954 the defenders acquired factory premises in Stockport. The work carried out at those premises had been similar to that carried out in the defenders' factory premises in Glasgow. Mr Hutchinson never worked in Scotland. In 1961 he became a director of the defenders, following upon which he had been responsible for developing the defenders' interests in England. Mr Hutchinson spoke of various family connections with the defenders. When he joined the company, his brother-in-law, Alexander Stirrat, had been the managing director of the company. Mr Stirrat is now dead. Mr Hutchinson sister, Irene Hutchinson, had been company secretary of the defenders. She had been based in Glasgow. During examination in chief, Mr Hutchinson was questioned about the defenders' insurance arrangements. He stated that he was not personally involved in that side of the company's affairs. Such matters were handled in Glasgow. Mr Hutchinson was asked whether he had been aware of the identities of the defenders' insurers and insurance brokers. He stated that he had been and named them as respectively "White Cross" and "Stenhouse and Partners". He was, however, unable to state the period during which White Cross had been the defenders' insurers or whether White Cross had ceased to act as the defenders' insurers, before he himself had retired from the company. When asked how he remembered the "White Cross" name, he stated that he recalled their involvement in the public liability insurance cover for the defenders' Stockport premises.

During his evidence Mr Hutchinson was asked to look at the Copy Proposal Form (No.7/10 of Process). That document is a copy of a pro-forma Midland Employers' Mutual Assurance Limited ("Midland") proposal form, bearing to have been completed on behalf of the defenders and dated 10 January 1961. It is agreed to be a copy of the original proposal form, which the defenders submitted to Midland, whether directly or through their insurance brokers, A R Stenhouse & Partners, in connection with their employers' liability insurance cover for the period of twelve months from 25 December 1960. The Copy Proposal Form was located following a search of the records of the Midland and the Eagle Star Insurance Company Limited. That search was carried out by Zurich Financial Services, in accordance with the Association of British Insurers "Code of Practice for Tracing Employers' Liability Insurance Policies". That Code regulates an insurance industry wide scheme, in terms of which insurance companies seek to determine the existence and whereabouts of insurance policies that can not immediately be located. The search carried out established, and it is now a matter of agreement between the parties, that the defenders enjoyed employers' liability cover, in terms of a Midland policy, No. EL7/104528, between 25 December 1960 and 27 February 1984. That policy number is to be found noted, by hand, on the Copy Proposal Form itself.

The Copy Proposal Form also has marked on it, in hand, against the entry for "Agency", the words " A R STENHOUSE & PTNS LTD". The defenders' name is stamped on the form. Various other blocks on the form have been completed, by hand, providing details of the defenders' addresses in Glasgow and Stockport and answering eight numbered questions. Those questions and answers are as follows (the handwritten answers being transcribed in italics):

1. Full particulars of work	Asbestos and rubber merchants, gasket manufacturers cutting from strip and pressing into shape, warehousemen and agents for product
2. Please state nature machinery in use	Elec presses and roller strip cutter
3. Are your machinery, plant and ways properly fenced and guarded and otherwise in good order and condition?	To the best of our knowledge, yes
4. Will any acids, gases, chemicals, or explosives been used? If so, give particulars and state extent of use	No
5. Do you conform to the requirements of the Factories Act and any special Regulations thereunder?	Yes

6. Have you ever been prosecuted under the Factories Act or any of the special Regulations? If so, give details

7. Please state name of previous Insurers for this risk

White Cross

Has any Company ever:-

(a) Declined your proposal?

(b) Refused to renew your Policy?

No

No

There was a ninth question in these terms - "State particulars of compensation paid to your employees by you or your Insurers during the past five years, and the total wages paid during the same period". That question was answered "NIL". The Copy Proposal Form bears to have been signed on 10 January 1961 by "A. Stirrat", as a director of the defenders.

Mr Hutchinson gave evidence that his sister was still alive. He explained that in recent years she has suffered a series of psychological problems. He stated that whilst she has to a large extent overcome those problems, they are liable to re-occur, if she were to be subjected to stress. Mr Hutchinson indicated that he had spoken to his sister on the telephone, during the weekend prior to his giving evidence. They had not talked, however, about the defenders' insurance arrangements. When Mr Hutchinson was shown the Copy Proposal Form, he identified the hand-written answers to the numbered questions as being in his sister's handwriting. During cross-examination, Mr Hutchinson indicated that during the period of 5 or 6 weeks leading up to the proof, he had met with representatives of the firms of solicitors representing the defenders and the third party. During those meetings, he had not been shown the Copy Proposal Form.

Joanna Martin is currently the Financial Director of Arco Limited, the parent company of the defenders. She explained that Arco Limited is a private company, which is wholly owned by members of her family. She gave evidence that some months before the proof she had been shown a copy of the Copy Proposal Form. She explained that thereafter she had taken steps to track down anyone that might have known anything about the defenders' insurers. In the course of doing so, she had come across the name of Miss Irene Hutchinson, who had been employed as the defenders' company secretary for a number of years and who remained one of Arco Limited's pensioners. Miss Martin said that she had written to Miss Hutchinson. When Miss Martin gave evidence, her letter was not a production. At a very late stage in the proof and with the agreement of the third party, that letter was lodged by the defenders. It was accepted that I should treat the letter as part of the evidence before me. It is dated 24 April 2001 and is in the following terms:

" 24^th April 2001

Dear Miss Hutchison

Re: Atholl Asbestos & Rubber Company

I understand from our records that you worked for the Atholl Asbestos and Rubber Company from mid 1950s through to 1973. For some or all of that period, I believe you were the Company Secretary.

I am currently dealing with an issue relating to an employee of Atholl in the 1950s and I would be very grateful if you could shed any light on this.

We have recently been involved with the settlement of a claim for asbestos-related mesothelioma from a James Irvine. Mr Irvine worked for Atholl for a period of time around 1957-1959. However, we wish to confirm the exact dates of his commencement and termination of employment with Atholl.

In addition, we have records showing that for the period December 1959-December 1960, the Employer's Liability insurer was White Cross. From December 1960, the insurer changed to Midland Assurance. We believe that the White Cross insurance company was in fact the insurer for a number of years prior to December 1959 but have been unable to locate a copy of the insurance certificate.

Would you, by any chance, be able to provide us with any information on the following

a) more specific dates for the commencement and termination of employment of James Irvine

b) whether the White Cross were indeed the Employer's liability insurer for a period of 5 years prior to December 25^th 1959 and if not, who the insurer might have been.

Finally, if you know of any other source of information on the company during this period, that would be most helpful.

Yours sincerely

Jo Martin

Finance Director".

It is to be noted from the terms of the letter that a copy of the Copy Proposal Form was not sent to Miss Hutchinson.

Miss Hutchinson and Miss Martin subsequently spoke on the telephone, on 1 May 2001. Before I heard any evidence as to the detail of that telephone conversation, senior counsel for the third party took objection to the line of evidence, on the basis that the line was seeking to elicit hearsay evidence. The objection having been taken, it was agreed that I should hear the evidence and rule on the objection later. Miss Martin then continued her evidence. She indicated that at the outset of the telephone conversation she had reminded Miss Hutchinson that the defenders were now in possession of documentation that indicated that White Cross had been the defenders' insurers from December 1959. She told Miss Hutchinson that she was would like to know if Miss Hutchinson could recollect whether White Cross had been the defenders' insurers prior to that period. Miss Hutchinson had said that she could remember the White Cross Insurance Company quite clearly. She said she could also remember the defenders' brokers, whose name she volunteered to Miss Martin. She said she could not be specific about the dates of the insurance cover, but that she believed that White Cross had been the insurers over a considerable length of time. She believed that they had been the insurers, since prior to the death of a senior manager of the defenders in 1949. Miss Hutchinson gave Miss Martin the name of that senior manager, which name Miss Martin then passed onto the third party's solicitor, who had noted down the letter "J". Miss Martin believed that the manager's surname had started with the letter "J", but she could no longer remember the name she had been given. Miss Hutchinson also told Miss Martin that it was likely that Mr Stirrat would have been involved in the completion of any proposal form. Miss Hutchinson indicated that she had no recollection of James Irvine, the pursuer. Before the telephone conversation came to an end, Miss Hutchinson indicated to Miss Martin that she would be prepared to speak to the third party's solicitors. The following day, Miss Martin wrote again to Miss Hutchinson, providing details of those solicitors and inviting her to telephone them. Miss Hutchinson did not do so. Accordingly, a month later, Miss Martin wrote again to Miss Hutchinson. That letter prompted Miss Hutchinson's nephew. Professor Stirrat, to get in touch with the third party's solicitors. He advised them not to make any further approach to Miss Hutchinson, on account of her health. Shortly thereafter, Miss Martin and her colleagues at Arco Limited reached the decision to respect Miss Hutchinson's wishes. They had made no further contact with her, nor had any further contact been made on their behalf. I deal later with two medical reports relating to Miss Hutchinson and the agreement that was reached between the parties, in the light of Miss Hutchinson's health problems and those medical reports.

Tuke Hosdell, an insurance broker from Kingston-upon-Hull, also gave evidence for the defenders. He has been an insurance broker since 1977. He stated that he had tried, without success, to locate anyone who had any involvement with A. R. Stenhouse & Partners in the late nineteen fifties. That firm of insurance brokers is now part of AON, a very large company of insurance brokers, who have no records relating to Stenhouse and Partners' dealings with the defenders. Under reference to the Copy Proposal Form , Mr Hosdell gave some fairly general evidence as to the contents of the document and the role a broker would play when an insured wished to change insurers and required to complete a new proposal form. He confirmed that a twelve month period was the normal period for employers' liability insurance. He indicated that since the terms of Question 9 on the proposal form refer to a period of five years, he would have advised any client to answer that question by providing details of all their insurers over the last five years. That was because, when a proposal form is received, insurance companies check claims experience with previous insurers. Without objection, Mr Hosdell gave evidence that from his own reading of the contents of the Copy Proposal Form, White Cross were likely to have been the defenders' insurers throughout the 5 year period covered by Question 9. When asked about the practice of employers changing their employers' liability insurance cover, Mr Hoskell gave evidence that continuity of insurers was important, as it built up a relationship between the insured and the insurers. Currently it was not the practice to chop and change employers' liability cover. From his knowledge of the insurance industry, partly acquired through conversations with senior and retired colleagues, he understood that forty years ago such changes were even less likely to have occurred. Circumstances that might lead to a change of insurers included where it would bring about a large saving in premiums, where there was dissatisfaction with the existing insurers and where there had been a large number of claims. Claims can be long and drawn out. For that reason, it has always been important that there is a good relationship between insurers and insured.

On looking at the Copy Proposal Form, Mr Hosdell saw no indication as to any reason for making a change. There was no claims history. When Midland granted cover from 25 December 1960, the premium was �11/10/- a year. That might have amounted to a small reduction in premium, because White Cross had been a tariff company that charged the same rates as other tariff insurers, whilst Midland were a non-tariff company.

During cross-examination, Mr Hosdell indicated that he understood that the Copy Proposal Form had been completed by Mr Stirrat, on behalf of the defenders. He conceded that there was no evidence that the form had ever been seen by the defenders' brokers, after the form had been completed. He suggested, however, that the normal practice would have been for the client to have given such a form to their brokers, who would then have passed it to the insurers. The brokers would obviously have been keen to protect their commission. He accepted that Question 7 referred to the "name" rather than the "names" of previous insurers. He confirmed that upon receipt of the Copy Proposal Form, the Midland Assurance would probably have carried out enquiries as to any claims record. He acknowledged that certain entries in Stone and Cox's "Accident, Fire and Marine Insurance Year Book 1957", one of the third party's productions, suggest that a special survey in respect of pneumoconiosis might have been carried out by the Midland. He would have expected the Midland to have opened a file, when the new policy coming into effect on 25 December 1960.

The final witness for the defenders was Robert Watson, a Chartered Insurance Practitioner. Mr Watson has had a long experience in the insurance industry, dating back to 1960. For the first 20 years of that career, he was employed in various capacities, by both insurance companies and brokers. Since 1980, he has acted as an insurance consultant and held various academic appointments, in Scotland and abroad. Since 1997, he has been a partner in a firm called Scottish International Risk and Insurance Training. During his evidence he referred to the contents of a Report dated 30 January 2001, which he had prepared in connection with this case (No. 7/17 of Process). Although Mr Watson did so, without any objection from senior counsel for the third party, much of what is contained in Mr Watson's Report, and indeed much of Mr Watson's evidence, came perilously close to his expressing his concluded opinion upon the issue of fact that is before me for my decision. That issue is, of course, whether it has been established that White Cross were the defenders' employers' insurers throughout the three year period up until 24 December 1960.

During his evidence, Mr Watson provided some details about the Accident Offices Association's Employers' Liability Tariff Scheme, which was set up in the 19^th Century and continued in existence until the nineteen sixties. From his knowledge of the insurance industry Mr Watson understood that there had been no significant change in the operation of that scheme during the 5-10 years before 1960, when he himself had entered the insurance industry. White Cross had been a tariff office, bound by the Rules of the Scheme. Mr Watson explained that the Scheme had been designed to bring some stability to the insurance market, by preventing unscrupulous insurers from undercutting other companies, by charging unrealistic rates. The minimum tariff rates were set by the Association and updated in the light of experience. Different minimum rates applied to different classifications of trade. It was left to the individual tariff offices to identify how a particular trade or sub-trade of their insured was to be classified. That was where their skills as underwriters came into play. Tariff offices could also "load" or increase premiums, in the light of a particular insured's claims experience or any concerns about poor housekeeping or management on the part of the insured. The Association also laid down the rates of commission that tariff offices could pay to insurance brokers.

As far as the hand-written entries in the Copy Proposal Form were concerned, Mr Watson indicated that it was and always had been the normal practice for insurance brokers to complete such proposal forms and to answer questions, such as Question 9, on behalf of their clients. He suggested that as A R Stenhouse & Partners had been highly reputable brokers, it would have been most unlikely that they would have omitted (or have allowed the defenders to omit) any relevant information from the proposal form, which constituted, of course, an application for a new insurance policy. In expressing those views Mr Watson assumed that because the defenders' business had been a loss free risk, the rate likely to have been charged by any insurer would have been the minimum for that class of risk. In other words, it was unlikely that the premium would have been loaded. Whilst it would have been open to Stenhouse, as the defenders' insurance brokers, to have transferred the employers' liability insurance from one tariff office to White Cross (another tariff office), in Mr Watson's opinion it was extremely unlikely that they would have done so during the years immediately prior to December 1959. That is because there would have been no need to do so. It is unlikely that any such change would have led to any economic benefit, for either the defenders or Stenhouse themselves. Even if there had been no insurance brokers involved in the years leading up to 1960, there would have been no attraction for the defenders in seeking to transfer their employers' liability insurers from one tariff office to another tariff office, standing the fact that the premium the defender were paying was small and would have been the minimum payable for cover against a hazardous, albeit claim free risk, relating to asbestos. Conversely, there would have limited attraction for one tariff office to have taken over this risk from another tariff office, albeit that insurers did sometimes compete to take over business insuring a poor class of risk. Non-tariff offices could, however, charge lower premiums than tariff offices and could pay higher rates of commission to insurance brokers. That gave brokers an incentive to recommend that their clients transfer from a tariff insurer to a non-tariff insurer. Whilst Mr Watson had no personal experience as to how the premium and commission rates of the Midland had compared with the rates of tariff companies in 1960, he was aware that tariff offices paid commission of 10%, as compared to the 12 1/2 % normally paid by non-tariff offices. Accordingly, such a move from a tariff to a non-tariff office could have been to the financial benefit of one or both of a broker and his client.

Mr Watson was asked a number of questions arising out of the dates on the Copy Proposal Form, which indicate that the Midland had been on risk since 25 December 1960, several days before 10 January 1961, the date on which the proposal form bears to have been completed. In Mr Watson's view, those dates indicate that, some time prior to Christmas, Stenhouse would have submitted details of the risk and of previous insurers and claims experience to Midland by telephone and that the new cover would then have been arranged. At that time it had been quite normal to make insurance contracts over the telephone. When that occurred, a file would probably have been opened. Midland might also have arranged for a survey of the defenders' premises to have been carried out, although he agreed that one of the benefits of large reputable brokers, such as Stenhouse, was that they could have served as a means by which Midland could have "surveyed the risk". Mr Watson indicated that in 1960 any new insurers would have wished to have been provided with details of all previous insurers, whom they might have contacted themselves. He acknowledged that if such details had been provided to Midland, when new insurance cover was arranged over the telephone, such details might well have been noted in a file, rather than on the proposal form when it was subsequently submitted.

Third party's evidence

The sole witness called by the third party was Robert Allan, a claims manager with Norwich Union, who have taken over the third party, since this action began. Within that combined organisation Mr Allan has overall responsibility for industrial disease and pollution claims. In his evidence he explained the third party's reasons for accepting that White Cross had been on cover as the defenders' employers' liability insurers, but only from 25 December 1959. Mr Allan also explained the steps that the third party had taken in an effort to establish the existence or otherwise of any employers' liability policies that the defenders might have held for the years prior to 25 December 1959. Those efforts had involved seeking the assistance of other insurers under the Association of British Insurers "Code of Practice" of 1999. That Code encourages insurers to retain policy documents. The AIB, itself, acts as a central point of reference for those trying to locate historical records. The AIB receive about 400 enquires a month as to the existence or otherwise of policies and circulate details of those enquiries around approximately 80 insurance companies. Mr Allan also explained in some detail the procedures introduced by his own employers, some 7-8 years ago, to preserve details of policies that have expired. At that stage his employers were the Commercial Union. The procedures involve imaging into the third party's computer records copies of all policy documents held by them, not merely relating to their current policies, but also relating to older policies of the third party and its various predecessors, including White Cross. Mr Allan stated that when this computer database was started the Commercial Union still held a handful of White Cross policies. Mr Allan made it clear, however, that he had no way of knowing how complete the records of White Cross had been, when they were entered into the third party's database. Mr Allan said he had carried out searches of the third party's computer database for details of any White Cross policies in the names of Atholl Asbestos & Rubber Company Limited or Arco Atholl Limited. Those searches had proved negative. Mr Allan had also checked the third party's database of industrial disease claims. That had been started as a paper based record, over 20 years ago. It now consists of 3000 folders relating to policy holders that have been insured by the third party and its predecessors. It contains no reference to the defenders, whether under their original or their current name. Through the AIB, Mr Allan had also made enquiries, across the industry, in an effort to locate any policies in the name of the defenders. All those enquiries had produced were details of the Midland policy, which ran from 25 December 1960, and the Copy Proposal Form.

Mr Allan confirmed that the third party accepted that it had assumed any liabilities of White Cross. Having considered the terms of the Copy Proposal Form, they also accepted that White Cross had become the defenders' employers' liability insurers, commencing with the twelve month period from 25 December 1959. In the absence of any other evidence, however, the third party did not accept that White Cross had been the defenders' insurers prior to that date. Mr Allan said that he did not draw any inference from the answers to Question 8 to the effect that White Cross had been the defenders' insurers for longer than one year. That was because it was not clear from the terms of Question 7 whether all the previous insurers required to be named or only the last one did. He suggested that Question 7 was to be read as only requiring the last insurer to be named. Accordingly it was possible, said Mr Allan, that there had been other insurers, before the "previous insurers" named by the defenders. It was also possible that the defenders had not had any employers' liability insurance prior to 25 December 1959. Such cover had not been compulsory, until 1972. Similarly Mr Allan did not draw any inference from the terms of Question 9 and Answer 9 as to the existence of insurance cover extending back for 5 years. In his view, what Question 9 covered was the existence of claims and compensation paid, irrespective of whether there had been any insurance cover in existence during that period. Accordingly, in the absence of any evidence of requests for White Cross or its successors to settle any other claims against the defenders dating back to before 24 December 1959, such inferences he drew from the terms of the answers on the Copy Proposal Form were consistent with the position of the third party in this action.

Under cross-examination, Mr Allan acknowledged that in the nineteen fifties neither insurers nor their policy holders retained the records that they would now keep. Records were regularly disposed of without appreciating how important they were. As far as insurers were concerned, policies and other records were not routinely retained, when insurance policies lapsed. Mr Allan said he was unable to indicate the extent to which employers in the asbestos industry had arranged employers' liability insurance cover, during the nineteen fifties. He conceded that his factual basis for suggesting that the defenders might not have had such cover was that employers' liability cover had not been compulsory until 1972. He agreed that there was nothing in the Copy Proposal Form that would lead him to make a case that there had been any specific insurers prior to White Cross. He also agreed that there was no indication in the Copy Proposal Form of any difficulty with claims that might have provided a reason for the defenders to have changed their insurers.

Outline of submissions

At the outset of his submissions on the evidence, senior counsel for the defenders made clear that the defenders' case against the third party was presented on the basis that the defenders required to establish that White Cross had been their employers' liability insurers throughout the period that the pursuer had been employed by the defenders. That had been a period of approximately two years, beginning some time during 1957 and ending on an unspecified date in 1959, prior to 24 December 1959. Standing the fact that employers' liability insurance runs for a period of twelve months, that means that the defenders required to prove that White Cross had been their employers' liability insurers since at least 25 December 1956. No argument was advanced to the effect that it would have been sufficient for the defenders to have proved that White Cross had been their employers' liability insurers for some part of the two year period during which they employed the pursuer.

Senior counsel for the defenders informed me that it was a matter of agreement, that if the defenders proved that White Cross had been their employers' liability insurers over the three years between 25 December 1956 and 24 December 1959, then the third party would be bound to indemnify the defenders for the damages paid to the pursuer. In other words, the parties were agreed that it was not necessary for the defenders to establish the precise terms of any employers' liability insurance cover that White Cross had provided.

As against that senior counsel for the third party made clear that the third party was not advancing a negative case. The third party conceded that White Cross had provided employers' liability cover to the defenders for the twelve month period to 24 December 1959, but its concession went no further than that. The third party was not seeking to establish that the defenders had been uninsured. Nor was it seeking to prove that the defenders had been insured by another named insurer. What the third party was doing was putting the defenders to the proof of their case. It is appropriate to record that in seeking to do so, the third party acted with care and moderation, both in the evidence given by Mr Allan and in the submissions advanced by their senior counsel, Mr Moynihan.

Assessment of evidence

It is clear from my summary of the evidence that the available evidence is limited in scope. That is entirely understandable, standing the fact that the dispute between the defenders and the third party concerns the existence or otherwise of insurance cover more than 40 years ago. There is also a dearth of the contemporaneous documentation, which over the relevant period would have been held by the defenders, A. R. Stenhouse & Partners, White Cross and Midland. As far as that lack of documentation is concerned, both counsel were agreed that it was a neutral factor. Neither counsel made any suggestion that the absence of documentation was surprising or that any party had destroyed documentation that they ought to have preserved. In such circumstances, it was agreed that no inferences adverse to either party fell to be drawn from the fact that much documentation, that would have been highly relevant to the factual issue before me, has been lost or destroyed since 1960. In the result, the Copy Proposal Form was virtually the only contemporaneous document available to the defenders as they sought to discharge the burden of proof upon them.

Clearly the evidence upon which the defenders do rely includes the contents of that Copy Proposal Form and the evidence given by Miss Martin as to the terms of her telephone conversation with Miss Hutchinson on 1 May 2001. In relation to both these chapters of evidence, counsel were agreed that the provisions of section 2(1) of the Civil Evidence (Scotland) Act 1988 are of relevance. They provide:

"Admissibility of hearsay

2. (1) In any civil proceedings -

(a) evidence shall not be excluded solely on the ground that it is hearsay

(b) a statement made by a person otherwise than in the course of the proof shall be admissible as evidence of any matter contained in the statement of which direct oral evidence by that person would be admissible; and

(c) the court, or as the case may be the jury, if satisfied that any fact has been established by evidence notwithstanding that that evidence is hearsay.".

The provisions of section 2(1) render the whole terms of the Copy Proposal Form and what Miss Martin said about her telephone conversation with Miss Hutchinson admissible evidence in the case. The evidence being admissible, ordinarily it would then be for me to follow the guidance of Lord President Rodger, as set out in his Opinion in L v L 1998 SLT 672 at page 676 H-J, where, having referred to the fact that section 2 of the 1988 Act has abolished the old rules against hearsay evidence, he stated "It is up to the court to assess all the evidence in a case and to determine its weight. This is a difficult but very practical exercise which calls for the application of the judge or jury's store of wisdom and common sense ".

Senior counsel for the third party, however, advanced a further argument in respect of the evidence given by Miss Martin about her telephone conversation with Miss Hutchinson. He referred to that argument as his "human rights point". The argument was founded upon the third party's convention rights in terms of article 6(1) of the European Convention on Human Rights. It was to this effect. Having regard to the circumstances surrounding the hearsay evidence given by Miss Martin, as to the contents of her telephone conversation with Miss Hutchinson, the defenders' reliance on Miss Martin's evidence and any reliance by the Court upon that evidence would be contrary to the interests of justice. Put another way, any reliance on such evidence would be in breach of the principle of equality of arms. Senior counsel for the third party conceded that the evidence was admissible, in that Miss Hutchinson would have been a competent witness and could have given evidence, without objection, on the matters she had talked about with Miss Martin. He stressed, however, it was clear from the provisions of section 2(1) of the 1988 Act that a Court was entitled but not bound to proceed on hearsay evidence. That permitted the Court to consider not only the weight to be given to the hearsay evidence, but also the human rights point he advanced.

I have reached the view that before I consider the third party's human rights point and determine what bearing it should have on my decision in this case, I should first deal with my assessment of all the evidence that I heard and the conclusions that, subject to the third party's human rights point, I would be prepared to draw from that evidence. That involves my considering whether, acting in accordance with Lord President Rodger's guidance, I am prepared to rely on the statements of Miss Hutchison and Mr Stirrat, to be found within the Copy Proposal Form, and the hearsay evidence given by Jo Martin about her telephone conversation with Miss Hutchinson on 1 May 2001.

On the basis of all the evidence I have heard, taken with the third party's concession that White Cross were the defenders' employers' liability insurers for the period of twelve months commencing on 25 December 1959, I would be prepared to hold that the defenders have established, to the necessary standard, that White Cross were the defenders' employers' liability insurers, throughout the period that they employed the pursuer. The hearsay evidence of Miss Martin, as to what Miss Hutchinson said to her during their telephone conversation, is, however, crucial to that conclusion. In the absence of Miss Martin's evidence I would not be prepared to find for the defenders.

In deciding that I would be prepared to accept and to rely upon the evidence Miss Martin gave, a number of factors come into play. In the first place, I was impressed by the careful manner in which she gave her evidence. It was obvious that Miss Martin appreciated that her evidence was of potentially critical importance to the outcome of the dispute between the defenders and the third party. In the event Miss Martin was not cross examined as to her recollection of her conversation with Miss Hutchinson. Accordingly, there was no direct challenge to either the credibility or reliability of her evidence on that matter. But it goes further than that. As I listened to Miss Martin's evidence, it was my clear impression that she was exercising the greatest of care in seeking to recollect, as precisely as she could, what had been said by Miss Hutchinson. I had no impression that Miss Martin was inclined either to paraphrase or to amplify her recollection of the conversation, with the objective of bolstering the defenders' case. Secondly, I think it is important to bear in mind that the telephone conversation on 1 May 2001 was one that had been planned. Both participants were anticipating the conversation. Both were aware what was going to be discussed. In particular, Miss Hutchinson, having received Miss Martin's letter, was aware of what she was going to be asked about. Indeed, having received Miss Martin's letter, Miss Hutchinson had telephoned Miss Martin, as she had been requested to do. Thirdly, Miss Martin was speaking about a telephone conversation that took place after she had written a letter to Miss Hutchinson, indicating the topics upon which information was sought. The contents of that letter, dated 24 April 2001, set the context in which the telephone conversation took place. The context was one of Miss Martin seeking information from Miss Hutchinson, including information as to whether White Cross had been the defenders' employers' liability insurers for the period of five years prior to 24 December 1959. In my opinion, the fact that the telephone conversation was planned and the context in which the conversation took place make it very unlikely that Miss Martin would have misunderstood what Miss Hutchinson said to her. Fourthly, I have borne in mind the agreed medical evidence about Miss Hutchinson that is to be found in the two medical reports dated 9 October 2001 and 11 October 2001 (Nos. 7/21 and 7/22 of Process). Whilst those reports make clear that Miss Hutchinson, who is now aged 82, has suffered from health problems for a period of over 20 years, they do not suggest that she is unfit to give evidence, in the sense that she would be unable to answer any questions asked of her or would be unlikely to remember events dating back for more than 40 years ago. On the contrary, the medical reports indicate that it is the possibility of an adverse impact on Miss Hutchinson herself, were she to give evidence, that renders it inappropriate for her to be asked to do so. Accordingly, there is nothing in the medical reports that gives rise to any doubt in my mind that it was perfectly possible for Miss Hutchinson to have engaged in a coherent telephone conversation with Miss Martin in May 2001. Similarly, Mr Hutchinson, who spoke to his sister having suffered a series of psychological problems, said she had largely overcome these. He gave no indication, nor was the possibility ever put to him, that his sister might be unable to take part in a conversation about events dating back to the late nineteen fifties. Finally, I have borne in mind that because the third party had no opportunity to take a statement or precognition from Miss Hutchinson, senior counsel for the third party was very restricted of any opportunity to cross-examine Miss Martin in detail as to her recollection of her telephone conversation with Miss Hutchinson. Taking all these factors into account, I am satisfied that Miss Martin's account of what Miss Hutchinson said to her is an accurate one, upon which I can rely.

In considering the weight to be attached to and the inferences to be drawn from this hearsay evidence as to what was said by Miss Hutchinson, I have, of course, had regard to the fact that Miss Hutchinson did not give evidence on oath. I also recognise that senior counsel for the third party had no opportunity to cross-examine her as to her recollection of events. In that regard senior counsel very properly indicated that he was not in possession of any specific information he would have wished to have put to Miss Hutchinson. Senior counsel indicated that all he had been deprived off was the chance of exploring with Miss Hutchinson whether she was in possession of any other information that might have assisted the third party in this action. As against those considerations, however, there is the fact that, during the relevant period, Miss Hutchinson acted as company secretary of the defenders. In a company as small as the defenders, with a workforce of 25, it is to be expected that the company secretary would be well aware of whether the company was insured and the identity of the company's insurers. Moreover, there is nothing reported as having been said by Miss Hutchinson, during that telephone conversation, that is in conflict with any of the other evidence I heard. On the contrary, what Miss Hutchinson is reported as having said is entirely consistent with that evidence, in particular her reference to Stenhouse & Partners having been the defenders' insurance brokers and the answers written on the Copy Proposal Form. Indeed there is no other evidence before me that can be put against what Miss Hutchinson said, in the sense that it arguably casts some doubt upon, let alone contradicts, the accuracy of Miss Hutchinson's recollection of events. Accordingly taking full account of all those factors, I have reached the view that, subject to the third party's human rights point, I am prepared to rely on what Miss Hutchinson said during her telephone conversation with Miss Martin. As I have previously noted, that was to the effect that when Miss Hutchinson was asked about the defenders' insurers, in the context of a claim for damages by the pursuer, she stated that White Cross had been the defenders' insurers since at least 1949. That statement was made by Miss Hutchinson, after she had received the letter of 24 April 2001, in which it is indicated that there are "records showing that for the period from December 1959 - December 1960, the Employer's Liability insurer was White Cross".

Whilst I would not have been prepared to find for the defenders in the absence of Miss Martin's evidence, that evidence did not stand alone. The Copy Proposal Form contains evidence of some assistance to the defenders. It is admitted, of course, that the document is a true copy of the proposal form that was completed in respect of the insurance cover that Midland began to provide for the defenders with effect from 25 December 1960. As I have indicated, it is also agreed that the defenders are entitled to rely on the contents of the Copy Proposal Form, by virtue of the provisions of section 2(1) of the Civil Evidence Act 1988. Mr Hutchinson identified the handwriting on the document as being that of his sister. The Copy Proposal Form indicates that the original was signed by Mr Stirrat, the former managing director, who is now dead. The Copy Proposal Form can accordingly be viewed as having been completed within the company and as containing statements of Miss Hutchinson and Mr Stirrat. The Copy Proposal Form not only indicates that White Cross were the insurers for the twelve month period to 24 December 1959, which is a matter of admission, the hand-written answers noted to Questions 7, 8 and 9 are entirely consistent with the same insurers having carried the employers' liability risk throughout the period when the pursuer was employed by the defenders. Whilst there is some force in the submissions made by senior counsel for the third party that the Copy Proposal Form may not contain all the information that was available to Midland, when those insurers took over the risk, and it is certainly correct that the defenders' insurance brokers appear not to have completed the Proposal Form, as Mr Robert Watson had assumed, when preparing his report and giving evidence, the fact that the terms of Answers 7, 8 and 9 are consistent with Miss Hutchinson's recollection of events assists the defenders in the case they seek to establish. To that limited extent, namely that the contemporaneous documentary evidence is consistent with Miss Hutchinson's recollection of events, the contents of the Copy Proposal Form support the defenders' position. I have not, however, been persuaded by the submissions of senior counsel for the defenders that the answers to Questions 7, 8 and 9, when taken on their own, could establish that White Cross were the defenders' employers' liability insurers over the five year period prior to 24 December 1959. Question 7, when looked at in isolation, is quite capable of being construed as referring only to the insurers during the period of twelve months preceding the completion of the proposal form. The answers to Question 8 (a) and (b), again when looked at in isolation, provide no indication as to the period over which the defenders held employers' liability insurance, such insurance not having been compulsory until 1972. In passing, I should also record that there was no evidence before me as to whether businesses of a similar size and nature to the defenders normally took out employers' liability insurance in the nineteen fifties. Having said that, there is nothing in the answers on the Copy Proposal Form that positively suggests that the defenders were uninsured, during the period the pursuer was employed by them. Question 8 (c) refers to a two year period and the answer given to that question provides no indication as to how many insurers may have carried the employers' liability risk over that particular period. Likewise, whilst Question 9 refers to a five year period, the terms in which it is framed and the 'NIL ' answer completed by the defenders do not point in the direction of White Cross having been the defenders' insurers prior to 25 December 1958. Accordingly, all we know from the Copy Proposal Form, when the answers to Questions 7, 8 and 9 are looked at in isolation, is that the defenders had taken out such insurance cover with White Cross by 25 December 1958.

George Watson ( the company secretary of Arco Limited), Tuke Hosdell and Robert Watson all gave evidence to the effect that it was unlikely that a company, such as the defenders, would change their employers' liability insurers on a regular basis. All three witnesses spoke to such policies tending to remain in existence for a number of years and to a change of insurers only being made when there was reason to do so. Such a reason might be the availability of cheaper premium rates, a change in ownership of the insurers involved, problems in handling claims made under an existing policy or a wish to bring all of a company's insurance policies under the roof of one set of insurers. Their evidence, which I accept, is illustrated by the fact that after the defenders changed their employers' liability insurance from White Cross to Midland in December 1959, they remained with those insurers until 1984. More importantly, their evidence provides some support for the defenders' position.

Ex facie of the Copy Proposal Form, there is no reason why the defenders might have wished to change from White Cross to Midland. In particular, there is no indication on the form of any claims history that might have led to there having been any difficulties between the defenders and White Cross. On the other hand, White Cross was a tariff office and the Midland was a non-tariff office. That meant that the Midland was in a position to quote lower premium rates than White Cross could do, without the latter company acting in breach of the provisions of the Tariff Scheme. Accordingly, the availability of lower premiums might have been one reason why the defenders would have been prepared to change from White Cross. Looking to the years before 25 December 1958, in the absence of any claims history over the five year period which ended on 24 December 1959, it is unlikely that White Cross, as a tariff office, would have been in a position to offer lower rates than another tariff office, let alone a non-tariff office. In other words, during the period when the pursuer was employed by the defenders, it is unlikely that the availability of lower premiums would have caused the defenders to move to White Cross.

The ability of non-tariff offices to offer lower premiums is linked to another possible reason why the defenders might have decided to move from White Cross to Midland. A non-tariff office was able to pay higher rates of commission to insurance brokers, than tariff offices were permitted to do. Accordingly, a new policy with the Midland might have brought financial benefit to both the defenders and Stenhouse Partners. On the other hand, looking back to the years before 25 December 1959, White Cross as a tariff office could not have offered higher commission than any other tariff company, let alone a non-tariff company, was able to. That is further evidence which suggests it is unlikely that the defenders would have changed to White Cross from either a tariff or a non tariff insurer during that period.

In these circumstances, having carefully considered all the evidence I heard, including the evidence of Robert Allan, the only witness for the third party, and the terms of the Joint Minutes (the details of which I need not refer to), I have reached the view that the defenders have proved on the balance of probabilities that White Cross were their employers' liability insurers throughout the period that they employed the pursuer.

The third party's human right point

[41 That leaves over the third party's human rights point, to which I now turn. Senior counsel for the third party submitted that the human rights point raised this question: "Whether the circumstances surrounding the hearsay evidence as to what had been said by Miss Hutchinson are such as to make the defenders' reliance on that evidence (and any reliance upon that evidence by the Court) contrary to the interests of justice?".

In posing that question senior counsel for the third party set out the agreed sequence of events, upon which he relied :- (a) Miss Martin's letter of 24 April 2001, (b) the telephone conversation of 1 May 2001, (c) Miss Martin's understanding at the conclusion of that telephone conversation that Miss Hutchinson was prepared to speak to solicitors, (d) Miss Martin's further letter to Miss Hutchinson, (e) Professor Stirrat's subsequent intervention, asking that his aunt should not be bothered any further, (f) the defenders' decision, taken at Board level, that they would not trouble Miss Hutchinson further nor call her as a witness at the proof, (g) the fact that the third party only heard about Mr and Miss Hutchinson in September 2001, notwithstanding the Interlocutor dated 13 July 2001, pronounced in terms of section 1 of the Administration of Justice Act 1972, ordaining the defenders to disclose the identities of their witnesses to the third party, (h) the fact that it had only been on 9 October 2001, a week before the start of the proof, that the third party had received notice of a motion to add Miss Martin's name to the defenders' list of witnesses, (i) the fact that whilst the third party had been accorded the opportunity to precognose Miss Martin, the defenders' solicitors had refused a request to allow the third party's solicitors to take a statement from Miss Hutchinson and (j) the terms of the medical reports dated 9 and 11 October 2001 (Nos. 7/21 and 7/22 of Process) having made it impossible for either party to take statements from or to cite Miss Hutchinson to give evidence at the proof.

Senior counsel for the third party argued that, if the defenders took a decision at Board level, for perfectly commendable reasons, not to take a statement from Miss Hutchinson nor to cite her as a witness for the proof, then, in terms of human rights fairness, Miss Hutchinson's evidence should be excluded in its entirety. He re-iterated the point that the absence of a statement from Miss Hutchinson had restricted his ability to cross-examine Miss Martin and had impeded the third party's ability to set up during the cross-examination of Miss Martin, what Miss Hutchinson might have said had she given evidence herself.

In developing his submissions, senior counsel for the third party referred to McKenna v HMA 2000 SLT 508, a criminal case in which the High Court recognised that there is no fundamental objection in Convention jurisprudence to the use of hearsay evidence. That view followed upon the High Court's consideration of a decision of the European Commission of Human Rights, Tervidi v United Kingdom [1997] EHRLR 521, to which I was also referred. The Opinion of the Court in McKenna also mentions F.R. v Switzerland, (Application no. 372992/97), in which the European Court of Human Rights issued its Judgment on 28 June 2001. Senior counsel founded on paragraph 34 of that Judgment, which is in these terms:

"34. According to the Court's case law, the principle of the equality of arms - one of the elements of the broader concept of fair trial - requires each party to be given a reasonable opportunity to present his case under conditions that do not place him at substantial disadvantage vis-à-vis his opponent (see, among other authorities, the Ankel v Switzerland judgement of 23 October 1996, Reports of Judgments and Decisions 1996-V, pp. 1567-68, para.38).

Under reference to FR v Switzerland, senior counsel for the third party argued that the circumstances of the present case had placed the third party at a substantial disadvantage in dealing with the hearsay evidence relating to Miss Hutchinson. He suggested that having obtained the information from Miss Hutchinson, the defenders had chosen "to bring the shutters on Miss Hutchinson". The defenders' solicitors had then refused the third party's solicitors access to Miss Hutchinson. Faced with that position and standing the terms of the medical reports, senior counsel for the third party argued that it would have been utterly churlish had the third party decided to cite Miss Hutchinson to give evidence.

Senior counsel for the third party developed the fairness point in this way. Looking at the hearsay evidence from the standpoint of equality of arms - if one party was to be denied access to a witness, albeit for perfectly good reasons, then the party denying that access should not themselves be able to rely on any hearsay evidence that they had obtained from prior access to the witness in question. Even if, as senior counsel for the third party conceded might be the position, the terms of the medical reports did not completely exclude the possibility of Miss Hutchinson swearing an affidavit or responding to interrogatories in the presence of her nephew, Professor Sirrat, without there being any necessity for her to leave her home, it was for the defenders to have taken the initiative to do so. Senior counsel for the third party argued that the third party did not fall to be criticised for not having taken further steps to precognose Miss Hutchinson or to obtain evidence from her, by whatever procedure it might have selected. On the other hand, whilst he did not criticise the defenders for their decision not to trouble Miss Hutchinson further, in light of Professor Stirrat's intervention, senior counsel submitted that the defenders were to be criticised for now seeking to rely upon Miss Martin's evidence as to the contents of her telephone conversation with Miss Hutchinson.

In my opinion, the approach I should follow is to consider the overall fairness of these proceedings, insofar as they relate to the dispute between the defenders and the third party. As McKenna confirms, there is no fundamental objection in Convention jurisprudence to the use of hearsay evidence. Nor is it an absolute rule that, before any hearing of evidence, all parties must have equal access to those individuals whose statements may figure in hearsay evidence. Statements made by individuals, who subsequently die or become unfit to give evidence, are frequently admitted in evidence, despite the fact that only one party has had access to the maker of a statement, before that person becomes inaccessible to other parties. This is not a case in which the defenders or Arco Limited have engineered the situation that has arisen. I am quite satisfied that Miss Martin, her colleagues in Arco Limited and the defenders' solicitors have acted in good faith throughout these proceedings. Moreover, I am quite satisfied that when Miss Martin spoke to Miss Hutchinson, she had every reason to be believe that Miss Martin was able and prepared to speak to solicitors, with a view to her giving evidence at the proof. The medical evidence that has led to her non-appearance as a witness, only emerged after Professor Stirrat's intervention. Indeed, it only became available in the days leading up to the start of the proof.

Looking at the whole circumstances of this case it appears to me that the question I require to address is "Whether, notwithstanding the fact that the third party has not been able either to interview or to cross-examine Miss Hutchinson, the third party has nevertheless had the opportunity to present its case, including the opportunity to lead evidence, in a manner that has not placed it at a substantial disadvantage to the defenders?".

For a variety of reasons, I answer that question in the affirmative. The third party was able to precognose Miss Martin, before she gave her evidence. That gave the third party's solicitors the opportunity to explore whether there was any possible basis for suggesting that Miss Martin's recollection of the telephone conversation might be unreliable. When that precognition was undertaken, the defenders' solicitors had available to them the Copy Proposal Form (No. 7/10 of Process). By the time Miss Martin gave evidence, the third party knew and accepted that Miss Hutchinson had been the defenders' company secretary over the relevant period and that her handwriting appeared on the Copy Proposal Form. By the time Miss Martin gave evidence, the third party were in a position to ask any questions they wished exploring the accuracy or otherwise of Miss Martin's recollection of the telephone conversation and the accuracy or otherwise of the statements which Miss Martin stated that Miss Hutchinson had made to her. I fully accept the submission of senior counsel for the third party, that it would not have been professionally proper for him to have challenged Miss Martin's credibility or to have put alternative factual propositions to her, in the absence of information to contrary effect. In my opinion, however, such restrictions as professional propriety placed upon senior counsel for the third party and the fact that senior counsel stated that he was not in possession of any information that he would have wished to put to Miss Hutchinson, did not completely eliminate the third party's opportunity to test the hearsay evidence given by Miss Martin, whether by cross-examination of Miss Martin or otherwise. As I have indicated, Miss Martin's account of her telephone conversation does not stand alone. Both parties had the opportunity to compare the statements made by Miss Hutchinson, as reported in the evidence of Miss Martin, with the other evidence in the case, including the contents of the Copy Proposal Form, a document which Miss Hutchinson had not seen since January 1961 and which was not before her when she spoke on the telephone to Miss Martin. Likewise, the third party was able to lead such evidence as was available to it to counter the defenders' evidence. In the event, as I have mentioned, the other evidence in the case, and in particular the hand-written entries on the Copy Proposal Form, are consistent with what Miss Hutchinson said to Miss Martin. The proof has afforded the third party some opportunity of testing Miss Martin's evidence as to Miss Hutchinson's recollection, whether by cross-examination or the leading of evidence. The fact that Miss Hutchinson was not herself available for precognition and cross-examination on behalf of the third party has not eliminated completely the third party's opportunity to challenge the hearsay evidence upon which the defenders rely. Likewise, after the conclusion of the evidence, the third party had a full opportunity to make submissions as to whether I should place any weight on the hearsay evidence given by Miss Martin, evidence which it is accepted was admissible in the proof. Following upon the intervention of Professor Stirrat, an event for which the defenders bear no responsibility, the third party finds itself in exactly the same situation that would have arisen had Miss Hutchinson died or suffered some serious deterioration in her mental faculties, between 1 May 2001 and the date of the proof. In the whole circumstances, accordingly, I am not persuaded that my reliance on the hearsay evidence given by Miss Martin would be contrary to the interests of justice and constitute such unfairness as would amount to incompatibility with the third party's rights under Article 6(1) of the European Convention on Human Rights. I accordingly reject the human rights point argued by senior counsel for the third party.

Further procedure

Accordingly, for the reasons I have set out in this Opinion, I am minded to sustain the 7^th and 8^th pleas in law for the defenders and repel the 2^nd plea in law for the third party. As requested by senior counsel for both parties, I shall put the case out By Order, for further discussion as the terms of the interlocutor that the defenders and the third party consider that I should pronounce.