Liability for occupational diseases – suing via London

Why would employees sue their employers for compensation for occupational diseases in London? ROBERT W VIVIAN and ALBERT MUSHAI examine the position of compensation for occupational diseases in the UK.

We have been commenting on compensation for occupational diseases, in particular the current silicosis litigation. Readers may recall that an action for damages was launched in the High Court in the Mankayi case (see box) and dismissed on the basis that section 35 of Compensation for Occupational Injuries and Diseases Act, 1993 (No. 130 of 1993) (COIDA) precludes such claims against employers. Compensation must be claimed as provided in statute.

The case was taken on appeal to the Supreme Court of Appeal (SCA) where the SCA upheld the decision of the High Court, also dismissing the claim. The matter then proceeded to the Constitutional Court where, for the first time in the history of South African law, it was held that section 35 of COIDA does not preclude employees from suing their employers. Employees who have already received legislative compensation may also sue their employers.

In the light of this judgment, it was generally expected that an action from employees would be forthcoming and, indeed, an announcement has been made that some employers will be sued – not in South Africa as one would think, but in London. The purpose of this article is to ask “why London?” and future articles will examine the position of compensation for occupational diseases in the United Kingdom (UK).

As will be seen, there is a history of actions being brought in London for South African occupational diseases, which raises the subject of jurisdiction. The question of which court has jurisdiction, and which law is applied, is examined in the field of private international law, which is not a well-known legal area.

Historically, there have been few instances emanating from South Africa involving private international law. In this field two questions usually arise; which court has jurisdiction and, secondly, what law applies in that court? Attempting to switch jurisdictions from one court to another or, as is often said, from one forum to another (South Africa to London, for example) is known as “forum shopping”.

Obviously lawyers would like to pick the forum which they believe will be most favourable for their case and, more often than not, to themselves personally. There are many rules establishing jurisdiction, with a general rule being that the case must be brought where the loss occurred.

Countries have territorial jurisdiction, and SA courts have jurisdiction over matters which happen in South Africa. But this rule is increasingly being violated, even forgotten, as can be illustrated by the example of, say, an American who comes to South Africa and is injured in a motor accident. The general rule is that, since the accident happened here, and the person who caused the injury is in South Africa, that person must be sued in this country.

Another rule is that the plaintiff must seek out the defendant in his jurisdiction. Therefore, the American must sue the South African in SA, in a South African court applying local law. The American, on the other hand, may well prefer to sue in his home country, where the courts may be inclined to higher awards. Similarly, the US lawyer will prefer the American courts because of the American contingency fee and jury systems.

Thus, as a general rule, claims for occupational diseases contracted by employees while working in SA must be brought in South Africa, where these will be dealt with by South African courts applying our law.

In order to bring the case forth in London, some connection with the United Kingdom must be established. But usually, even if a connection can be established, the UK courts will not hear the case unless it can be shown that it is unlikely that the injured parties will receive justice in South Africa.

It is not surprising, then, that an attempt will be made to take the occupational diseases case to London, since this has happened a number of times in the past. This development started with actions against Thor Chemicals, where 20 employees claimed to have suffered from mercury poisoning.  Thor Holdings was a British company, hence the link with Britain. It could also be argued that the employees would not receive justice in South Africa since they were precluded from bringing an action against their employer because of s35 of COIDA.

The usual arguments about apartheid could also be raised in the London Courts, which would not be as effective when raised in the South African courts. In the end, in 1997 Thor Holdings in Britain made a R9,42 million settlement offer, which the chairman described as “ransom money”. Thor had worked out that its legal fees would be in excess of R36 million, even if it won the case – while the employees fees would be paid by the British taxpayer, via legal aid.

So Thor faced a certain cost of either R9,2 million or R36 million, depending on the decision to defend or not defend. If it defended the case and lost, it was estimated the legal fees would be R70 million (The Star April 9, 1997). Thor Chemicals was on the proverbial hiding to nothing.

A second case involved asbestosis litigation, where an action was launched in London against Cape plc on behalf of 7 500 former employees. This was an odd story, as Cape plc appeared to agree to a £21 settlement, but in the end it is not clear to us that they, in fact, paid anything.

The company faced severe financial difficulties and it looked as if it would be unable to pay, with its share price plummeting to £0,11. In the face of Cape plc’s financial difficulties, the action seemed to switch seamlessly to a claim against Gencor, with the argument that the claimants who were suing Cape plc had also worked for Gencor!

Gencor was in the process of unbundling and the litigation against it threatened to hold up the process, possibly for many years. Like Thor Chemicals before it, one can say it faced a ransom situation. Accordingly, Gencor took a business decision to settle the litigation by agreeing to pay amounts into trusts for the benefit of the claimants. It was reported that an amount of R490 million was involved. Thus, in two cases with London links, the employers paid out.

In view of these successes, it’s not surprising that, in the latest round, an action in London is under consideration. Things may be slightly different now, though, as any argument that employees will not receive justice in the South African courts is far less convincing than in the previous cases.

The English courts and the British government are themselves having a serious rethink about the legal process of claiming for occupational diseases. As previously indicated, the courts have changed their minds about making awards where damage has not been shown to exist and the UK government, acting on medical advice from its own medical specialists, has decided not to attempt to overturn the judicial decision by legislation.

The old apartheid argument is wearing increasingly thin and it is not clear that the companies can be manoeuvred into a ransom situation. Similarly, it is unclear why the now hard-pressed British taxpayer, via the legal aid system, should pay for the litigation.

We will examine these situations in greater detail in forthcoming articles.

The case of Thembekile Mankayi

In October 2006, a South African gold miner named Thembekile Mankayi sued AngloGold Ashanti, his former employer, stating that he developed the lung disease silicosis while working in Vaal Reefs mine. The lawsuit, filed in the Witwatersrand Local Division of the High Court of South Africa, sought R2,6 million in compensatory damages.

Mankayi alleged that AngloGold Ashanti failed to meet its responsibility to provide its employees with a safe and healthy work environment, under both South African laws and an employer’s common law duty of care to its employees. AngloGold Ashanti responded that Mankayi was precluded by law from making the claims he set forth in his lawsuit as, under South Africa’s Compensation for Occupational Injuries and Diseases Act (COIDA), workers or their families may not sue an employer for injury or death incurred at the workplace. Instead, the compensation commission considers these claims. But Mankayi’s claims of AngloGold’s negligence could only be heard in a court of general jurisdiction, not by the compensation commission.

In addition, mineworkers’ lung diseases are covered under the Occupational Diseases in Mines and Works Act (ODMWA), which limits a mineworker’s compensation for illness due to working conditions, to just a fraction of that awarded under COIDA (plaintiff’s counsel estimates that the payout is about a tenth of what it would be under COIDA). The size of Mankayi’s claim challenged the limitations on compensation under ODMWA, and the South African Parliament is currently considering revisions to the law to address the disparity between the remedies available to workers under COIDA and ODMWA.

On 26 June 2009, the High Court of South Africa, Witwatersrand Local Division, ruled in AngloGold Ashanti’s favour, holding that Mankayi was statutorily barred from making his claim. In March 2010, the Supreme Court of Appeal in Bloemfontein heard Mankayi’s appeal of the lower court’s ruling and upheld the High Court’s ruling. 

The plaintiff then appealed to the Constitutional Court, which reversed the lower court’s ruling and ruled in favour of Mankayi on 3 March 2011. Unfortunately, however, Mankayi died of lung disease on 25 February 2011. Source: www.business-humanrights.org

Legally Speaking is a regular column by Professor Robert W Vivian and Albert Mushai, both in the school of Economics and Business Sciences, University of the Witwatersrand. Robert W Vivian is a leading authority on insurance and risk management. He has written a number of books on South Africa’s business history. Albert Mushai holds a master’s degree from the City University, London, and was the head of the insurance department at the National University of Science and Technology in Zimbabwe before joining Wits University as a lecturer in insurance.