Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION

[2014] CSOH 160

PD937/14

OPINION OF LORD BRAILSFORD

In the cause

FRANCIS TALBOT

Pursuer;

against

BABCOCK INTERNATIONAL LIMITED AND ANOTHER

Defenders:

Pursuer:  Grahame QC;  Digby Brown LLP

Defender:  Middleton;  DWF LLP

5 November 2014

[1]        This is an action in which the pursuer sought an award of provisional damages under section 12 of the Administration of Justice Act 1982 (“the 1982 Act”) in the sum of £15,000.  On 22 November 2013 the first and second defenders lodged a minute of tender (no. 9 of process) in the sum of £4,100 as provisional damages in terms of the conclusions of the summons, said sum being stated as “being free and net of any recoupment in terms of the Social Security (Recovery of Benefits) Act 1987”.  The offer was tendered together with the expenses of process and said to be “in full satisfaction of the conclusions of the summons.”  On 3 March 2014 by minute of acceptance of tender (no. 10 of process) that offer was accepted.  A motion subsequently came before the court in terms of which the pursuer sought decree for provisional damages, for the expenses of process in terms of the tender and acceptance and for certification of a skilled witness.  The motion to that extent was not opposed.  The pursuer further sought an order in terms of section 12(2)(a) of the 1982 Act

“... reserving leave to the pursuer, or his executor to apply (within 3 years of the Pursuer’s death) to the Court for a further award or awards of damages in terms of the Administration of Justice Act 1982, section 12(2)(b), against the defenders, if he at any time during his life shall develop one or more of the following conditions, viz:  (a) mesothelioma;  and/or (b) asbestos related lung cancer;  and/or (c) asbestosis;  and/or (d) defuse plural thickening and/or (e) rounded atelectasis.”

That motion in so far as it related to the condition of rounded atelectasis (head (e)) was subsequently dropped at the bar.  This part of motion was opposed.  The grounds of opposition were in the following terms:

“That the purpose of an award of provisional damages is to reserve the right to a pursuer to return to court for a further award, in the event that his physical or mental condition develops or deteriorates in such a way that there is a more than de minimus future risk of a more adverse outcome than that prevailing at the time of the provisional award – that outcome/condition being distinct from any existing condition, and, accordingly:

(i)         in the context of asbestosis as a return condition:

(a)        a “negligible and no more than 1% risk of developing” asbestosis is a de minimus, unquantified risk, not entitling the pursuer to provisional damages for that condition;

(b)        being a condition that can develop asymptomatically, the pursuer requires (and the court ought) to specify a threshold percentage of respiratory disability due to asbestosis, without which any future court will be unable to measure any discernable increased loss;  and

(c)        that is especially so in the present case, where the pursuer already has a 60% respiratory disability due to non-asbestos related, comorbid medical conditions;

(ii)        In the context of defuse pleural thickening, the opinion of Dr smith is such that he may develop the condition in “and/or” rounded atelectasis – in other words, he is not even saying that there is a definite 2% risk of Developing PT ...”

[2]        The background to this action, on the basis of the pleadings and from the submissions I heard, can be stated succinctly.  For various periods between 1962 and 1972 the pursuer was employed by the defenders as a scaffolder.  In that capacity he was involved in the construction of various power stations in Scotland.  Boilers were also installed in these power stations and were lagged with material which included asbestos.  As a consequence the pursuer during his periods of employment with the defenders was exposed to asbestos.  It is averred in the summons that as a result of such exposure the pursuer has developed an asbestos related condition.  He was discovered to have pleural plaques in 2007.  He was diagnosed as suffering from asbestosis “on or around March 2011”.  It is said that his life expectancy has been “affected by his asbestosis related condition”.  In supplement to these comments in the summons, the pursuer lodged for the purposes of the motion, a medical report (no. 6/2 of process) dated 1 August 2012 from Dr Robin Smith, a consultant respiratory physician.  That report in the section entitled “Opinion” on pages 6-8 confirmed that the pursuer had

“clear evidence of multiple calcified pleural plaques, which have the classical appearance of those associated with asbestos exposure”.

Dr Smith further expressed the opinion that:

“Although the reporting radiologist of the CT scan suggests that there may be asbestosis present, in my view there are not sufficient changes present on this CT scan that would permit a diagnosis of asbestosis to be made.  On balance of probabilities therefore Mr Talbot does not suffer from asbestosis”.

Dr Smith then expressed the view that the pursuer was suffering from a significant respiratory disability which he quantified as being  60%.  He considered that this was due to combination of reasons which he identified as emphysema associated with a former smoking habit and left pleural thickening secondary to coronary artery bypass surgery.  He thought that the pursuer was at an increased risk of developing mesothelioma and estimated that risk to be “5% over his remaining lifespan”.  For the purposes of the motion, Dr Smith was asked to reconsider his opinion but by letter dated 18 March 2013, essentially  reiterated the views expressed in his opinion.

[3]        The relevant statutory provision, that is section (12(1) and (2) of the 1982 Act is in the following terms:

“(1)      This section applied to an action for damages for personal injuries in which –

(a)        There is proved or admitted to be a risk that at some definite or indefinite time in the future the injured person will, as a result of the act or omission which gave rise to the cause of the action, develop some serious disease or suffer some serious deterioration in his physical or mental condition;  and

(b)        the responsible person was, at the time of the act or omission given rise to the cause of the action,

(i)         a public authority or public corporation;  or

(ii)        insured or otherwise indemnified in respect of the claim.

(2)        Any case to which this section applied, the court may, on the application of the injured person, order –

(a)        That the damages referred to in sub-section (4)(a) below be awarded to the injured person;  and

(b)        that the injured person may apply for the further award of damage referred to in sub-section (4)(b) below,

and the court may, if it considers it appropriate, order that an application under paragraph (b) above may be made only within a specified period.”

[4]        In support of the motion counsel for the pursuer contended that the form of the minute of tender was unqualified.  It was in full satisfaction of the conclusions of the summons and, once accepted, had the effect of bringing the entire action to a conclusion.  Having regard to that situation it was not now open to the defenders to seek to re-open the issue of the return conditions which would entitle the pursuer to seek a further award of damages.  Had the defenders wished to define or limit the return conditions which would entitle the pursuer to return to court, then that should have been part of any settlement negotiations and agreement.  Put simply, consensus was a necessary precondition to there being scope for the defenders to impose any restriction in relation to the issue of return conditions.

[5]        Counsel for the pursuer went on to develop this submission by saying that there were four methods of proceeding open to the defenders had they wished to attempt to restrict the return conditions.  These were first by agreement which could be expressed in a joint minute specifying the return conditions.  Second, by simply proceeding to proof.  Third, by tendering on a lump sum basis, essentially offering a larger sum to compensate the pursuer both for existing conditions and any additional condition he might subsequently develop.  The fourth suggestion was that any tender lodged offering  payment in respect of the provisional damages conclusion could have expressly stipulated the return conditions which were covered by the offer.  The defenders did not however elect to avail themselves of any of these options.  The tender was in unqualified terms and was accepted on that basis.

[6]        In response to this submission, counsel for the defender accepted that, on the basis of Dr Smith’s report, it was appropriate to grant the second part of the pursuer’s motion in relation to mesothelioma and asbestos related lung cancer as return conditions but submitted that the court should refuse to grant the motion in respect of the other two return conditions, asbestosis and diffuse pleural thickening.  There was insufficient definition or quantification of the risk of the pursuer developing defuse pleural thickening and/or asbestosis for these conditions to be included as return conditions.

[7]        Counsel developed his submission by informing me that the practice requirements in relation to awards of provisional damages in the courts of England and Wales require that the order must specify the disease or type of deterioration in respect of which an application may be made at a future date.  Whilst there was no equivalent provision in the Scottish provisions he submitted it was expedient to follow English practice and to include such conditions in orders.

[8]        He then submitted that it was accepted that every case of this sort was fact dependant but maintained that there were some general principles which were applicable in cases where an application for provisional damages was made.  It was submitted that section 12 of the 1982 Act contained a discretionary power enabling a pursuer with a physical or mental disease or condition, which at the time of an award of provisional damages was manifesting itself at a particular level of seriousness, but which may worsen with the passage of time, which entitled him to have the case determined on the basis that such a worsening will not eventuate but expressly reserving the right to return for further damages if it did.  Evaluation of this was said to involve a three stage test.  The three stages were:

(i)         a proved or admitted risk of future problems.

(ii)        those problems being either the development of a serious disease or a serious deterioration in the pursuer’s condition and

(iii)       on satisfaction of the first two criteria whether in all the circumstances the court ought to exercise its discretion.  In other words there was no conferring of an automatic right to provision of damages.

In supplement to these general propositions, it was submitted that the return condition must be distinct and severable from the provisional condition.  The return condition must also be accompanied by a positive, quantitative assessment of risk, providing a clear cut and severable threshold for further damages.  The risk of a return condition eventuating must be more than theoretical or de minimus.  Lastly, it was submitted that the word “serious” used in section 12 related more to the disease/deterioration rather than the consequences of such disease.  In support of these submissions reliance was placed on two authorities, White v Inveresk Paper Co Ltd 1987 SC 143 and Robertson v British Bakeries Ltd 1991 SLT 434.

[9]        In relation to the factual situation before this court and against which I was being invited to consider the motion it was submitted that on the basis of Dr Smith’s opinion, as contained in his medical report and supplementary letter the appropriate threshold of risks to justify asbestosis or diffuse pleural thickening to be included as return conditions was not met.  It followed that the defenders’ motion was to confine the conditions which would entitle the pursuer to return for a further award of damages to mesothelioma and asbestos related lung cancer, a risk of future development of these conditions being accepted to have been established by reference to Dr Smith’s report.

[10]      In my view the starting point in consideration of this motion must be to have regard to the terms of the minute of tender and the subsequent minute of acceptance of tender.  The terms of these documents are in what I understand and consider to be standard form.  Plainly the resolution of disputes in personal injuries actions is one in which recourse to the use of tenders is commonly made.  They are a well understood and established part of practice.  Part of that practice is an understanding that tenders must be unqualified and must be in clear and unambiguous terms.  With limited exceptions, tenders cannot be made subject to conditions (Ferguson v MacLennan Salmon Co Ltd 1990 SC 45).  A tender is an offer of a contractual nature which should be capable of being accepted in an unqualified manner.  These considerations do, as was recognised by counsel for the pursuer, place some limitation on the use of tenders.  It seems to me that one implication in practice is that there may occasionally be situations where a tender cannot be made unconditionally.  In these situations it appears to me that defenders wishing to resolve a litigation will simply require to have recourse to another method of making an offer to settle.  Whilst the obvious attraction of a tender is the protection in relation to expenses that it offers to defenders there are other methods whereby this might be achieved. 

[11]      Against those considerations I now turn to the tender and acceptance in the present case.  As already noted these are in standard form and unqualified by any conditions.  The tender is simply an offer to make payment of a sum as provisional damages in satisfaction of the conclusions of the summons.  The acceptance of that tender created a contractually binding agreement between the parties resolving the issue to the litigation.  In a practical sense it brought an end to the litigation.  In those circumstances, I am of the view that for the purposes of this motion the only further consideration is what constitutes provisional damages.  That is clearly stipulated in section 12 of the 1982 Act.  The terms of section 12(1) give a pursuer a right to return to court if he develops some serious disease or some serious deterioration in his physical or mental condition which is a result of the act or omission which gave rise to the cause of action in the first place.  In my view, the development or deterioration in a condition is an issue of fact.  This was recognised by counsel for the defenders who accepted that an award of provisional damages could only be made if there was a proved or admitted risk of future problems.  I observe that the two cases relied upon by the defender (White (supra) and Roberson (supra)) were both decided after proof.  The problem for the defender is that in the present case there has been a contractually binding compromise of the litigation with an express concession for the appropriateness of an award of provisional damages.  There is nothing in the terms of this contractual compromise to specify or limit the return conditions development of which would entitle the pursuer to return for a further award of damages.  Moreover, I see no way in the terms of the statutory provision which would entitle the defender to impose any restriction or limitation on the types of condition which would entitle the pursuer to return to the court, save of course that the conclusion was a result of the act or omission which gave rise to the cause of action in the present case.  Quite simply it would be a matter for the pursuer at a subsequent date to establish that any deterioration in a condition from which he presently suffered on any condition he had developed was one which arose out of the injury giving rise to the original cause of action.  My conclusion is that there is no statutory right of the defender to impose the conditions he seeks to by his opposition to this motion.  Further I consider the terms of the contract constituted by the minute of tender and acceptance preclude the defender from having any ability at this stage in proceedings to seek to impose conditions of the sort he does.

[12]      The anomaly arising from the foregoing analysis is that both the pursuer and the defenders seek to impose limitation on the conditions which will entitle the pursuer to return to court seeking a further award of damages.  I consider that it follows from what I have said that it is open to neither party to impose conditions on the other after the conclusion of the contract constituted by the tender and acceptance.  It follows that I will grant parts 1 and 3 of the motion but refuse part 2.