An English decision handed down in June 2002 by the House of Lords could have considerable implications for businesses, particularly insur-ance companies, in Western Australia if the principles outlined by the Law Lords are applied in Australian law.
Mrs Fairchild’s late husband was exposed to asbestos at a number of different locations.
He developed mesothelioma as a result of this exposure and subsequently died.
The English Court of Appeal decided that as Mrs Fairchild could not establish when it was that her husband inhaled the asbestos fibre or fibres, which initiated the disease process, she could not prove which defendant was liable.
The issue on appeal to the Lords was proof of causation.
The general rule in personal injury claims is that the claimant must establish a causal link between the defendant’s breach of duty and the damage suffered by showing that ‘But For’ the defendant’s breach, he would not have suffered harm.
Applying this test to the facts above, C would fail against A as he could not prove that his mesothelioma would probably not have occurred ‘But For’ A’s breach of duty.
The Lords decided to adapt the conventional test to allow C to recover against A and B on a joint and several basis, i.e. no discount if only A or B is before the Court, as mesothelioma is an indivisible disease.
The Lords relied heavily on their earlier decision in McGhee v National Coal Board.
McGhee worked in a dusty brick kiln and claimed to have developed dermatitis.
The medical experts agreed that had the Coal Board provided showers, this would have materially reduced the risk of disease.
They could not say whether harm would not have occurred but for the employer’s breach of duty.
McGhee finally succeeded on appeal to the House of Lords.
The core decision in McGhee was identified as whether it was enough for McGhee to show that his employer’s breach had increased the risk of contracting dermatitis.
The House adapted the "But For" test to meet the facts of the case as otherwise, McGhee faced an insuperable problem in establishing causation.
In Fairchild the Court expressly said that McGhee established new law and that these principles will "be the subject of incremental and analogical development".
This statement may encourage future claimants to seek to persuade the English Courts to further extend the causation boundaries to allow complex claims to succeed, despite the scientific uncertainties for example, claims in relation to CJD, cell phones and other EMF exposures.
However, one member of the Court sought to confine the McGhee principles to cases with these specific features:
• where an employer is under a duty to protect employees from unnecessary exposure to a risk of a particular disease; and
• the claimant must establish that the greater the exposure, the greater the risk of him contracting the disease; and
• medical science cannot specifically attribute the disease to the alleged breach.
In addition, it was considered inappropriate to apply the more relaxed test of causation to clinical negligence claims, as this would result in a massively increased liability for the NHS.
No such consideration was given to the potential effect of the decision on uninsured companies and the insurance industry.
The House of Lords’ decision removed any additional financial burden from the UK Government to compensate disadvantaged claimants and placed it firmly on the insur-ance industry and uninsured companies.
This burden is compounded by the fact that liability is on a joint and several basis i.e. no discount for uninsured/insolvent defendants.
The Lords made no decision on apportionment in cases involving multiple defendants.
If the Fairchild decision is applied in Australia it may potentially affect:
• health and pharmaceutical companies whose generic product is sold by several manufacturers;
• hospitals which supply blood for transfusion, for example in relation to hepatitis B;
• employers whose employees are exposed to biological agents that cause indivisible diseases such as anthrax, brucellosis, chlamydiosis, legionellosis, leptospiros, lyme disease, tetanus and tuberculosis; and
• employers, where employees (during the course of their employment) breathe gases at increased pressure, thereby causing lung or other organ damage.
Companies and their Insurers should be aware of the risks of pursuing claims involving an element of scientific uncertainty to Court, where they may have technical argu-ments but there are strong competing human interest concerns.
The Fairchild decision will not automatically apply to every case involving multiple expo-sures to a harmful substance, but defendants should carefully consider their tactics in response to possible future claims.
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