Scottish occupational disease claims: UK Court rules!

The May/June Legally Speaking column dealt with occupational disease claims in Scotland and pointed out that the matter was to be taken to the UK Supreme Court. This has now been finalised. ROBERT W VIVIAN and ALBERT MUSHAI have some fascinating observations on the court’s decision.

The relevant case is Axa General Insurance Ltd and others v the Lord Advocate and others 2011 46 UKSC, with judgment being handed down on 12 October. As a point of interest, the final court of appeal is now the United Kingdom Supreme Court and no longer the Judicial Committee of the House of Lords, or what was simply referred to as the House of Lords.

After several centuries an independent Supreme Court has been established for the United Kingdom. The judges still retain the title of “Lords” and the tradition is to refer to the judges, in High Courts, as “Your Lordships”. It should also be noted that in South African High Courts, judges are also referred to as “Your Lordship” in the English tradition. Magistrates, on the other hand, are referred to as “Your Honour”. It was decided in South Africa some time ago to abandon the English tradition of referring to High Court Judges as “Your Lordship”, but it is not clear that this has happened. Traditions, as is known, take time to change (… which is why they are called traditions).

At the moment, South Africa’s highest court is the Constitutional Court. However, the scope of matters considered by the Constitutional Court is so broad that, in line with international practice, a good case can be made to rename our Constitutional Court as the South African Supreme Court. This probably will happen sometime in the future.

 Referring to this column in the May/June issue, it is necessary to recap the issues we discussed in order to understand the Axa judgment. As far back as the law can be traced, in order to receive a sum of money as damages for a personal injury case, it has been essential to prove that the person claiming had suffered an injury. An exception to this rule evolved in asbestosis cases, where the English courts got into the habit of awarding damages if pleural plaques could be detected on the lungs of claimants, despite the absence of any actual adverse symptoms or decrease in the quality of life.

The mere presence of pleural plaques in the claimants’ lungs did not constitute an actionable injury in the historical or legal sense, and the House of Lords corrected this position in the case of Rothwell v Chemical & Insulating Co Ltd 2007, where it disallowed claims where the only alleged injury was the detected presence of pleural plaques.

This decision was not binding in Scotland, but there can be little doubt that if a matter went before a Scottish court it would have come to the same conclusion as the English court. The Rothwell judgment after all, correctly reflects the centuries old legal position. Scottish judgments are of great interest to South African lawyers since Scottish courts apply the Roman law principles of delict, which is the basis of South African law governing this matter. In contrast, the English (and American) courts follow a slightly different system called the law of torts (more recently the law of tort).

Clearly, the Scottish politicians were unhappy with this – or, more correctly, pressure groups were able to influence the politicians and the Scottish parliament. As a consequence it passed the Damages (Asbestos-related Conditions) (Scotland) Act in 2009. The purpose of this Act was clearly to nullify the application of the Rothwell judgment in Scotland. Indeed, the Scottish court had already, in Wright v Stoddard International plc 2007, followed the Rothwell decision and refused to award damages. But, for good measure the judge indicated that, even in the absence of the Rothwell decision, he would not have awarded damages.

With the passing of the Damages Act, insurers in Scotland now faced considerable uncertainty and exposure estimated to run into billions of pounds, so they took the matter to the Scottish courts to have the Damages Act declared unlawful. It should be noted that neither England nor Scotland have constitutions granting to the courts the authority to declare legislation unconstitutional.

This is the great change introduced in South Africa with the adoption of our Constitution, where our courts were granted review powers.

In January 2010 the Scottish courts declined the insurers’ petition to have the Act declared unlawful and, in April 2011, a further appeal to the Scottish courts was launched, but it too was declined. The matter then proceeded to the UK Supreme Court.

The matter before the court was a technical constitutional matter. It did not concern the merits of making awards in cases where no injury had been caused, but rather whether the English Courts should interfere with legislation passed by elected Scottish politicians. The matter was heard by seven Law Lords.

Worldwide, there is a growing tendency that, when a number of judges hear a matter, one judge presents the findings and the other judges concur. The older tradition is for each judge to deliver a separate judgment. However, In some cases it is not possible to reconcile the individual judgments – as happened in the famous South African case of Herchel v Mrupe 1954 AD.

In the Axa case several separate judgments were delivered, but in the end the conclusion is that the English Supreme Court decided not to interfere with the Scottish legislation and declined to declare the Damages Act unlawful. One can therefore expect to see actions being brought before Scottish courts from persons who have pleural plaques. It will be interesting to see the response of Scottish judges to these cases – one can imagine they will find in favour of the claimants, but the awards will not be substantial.

The UK government seems to have understood that claims for pleural plaques are claims by persons who have not suffered any injuries in the historical legal sense and should not lead to financial settlements. Towards the end of 2007 the matter was discussed in the House of Commons, where it was decided not to pass any legislation to overturn the Rothwell decision in England.

Notwithstanding this, in 2008, the Department of Justice issued a consultation paper on pleural plagues and an attempt was made via the House of Lords to pass a law similar to the Scottish law in the UK. But the government indicated, clearly, that it did not support this measure and on
25 February 2010 the Ministry of Justice announced that the law of England and Wales would not be amended to overturn the Rothwell judgment. It did announce that a scheme would be put in place to provide modest compensation to persons who had launched actions before the judgment – that is, cases which were in the pipeline. The deadline for these applications closed on
1 August 2011.

It seems that, very slowly, a bit of common sense is returning to the law in England as it is restored to the historical position; no injury – no award for damages. The world is currently in a very precarious financial position brought about largely by governments which have, for decades if not far longer, been overspending and producing enormous unsustainable deficits.

The cause of these deficits was the age of entitlements, and it seems that slowly the age of entitlements is coming to an end. This message, however, does not seem to have got through to Scotland yet.

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.