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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> AXA General Insurance Ltd, Re Application for Judicial Review (Asbestos Related Conditions) [2009] ScotCS CSOH_57 (27 April 2009)
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Cite as: [2009] ScotCS CSOH_57, [2009] CSOH 57

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OUTER HOUSE, COURT OF SESSION

[2009] CSOH 57

    

OPINION OF LORD GLENNIE

in the Petition of

(FIRST) AXA GENERAL INSURANCE LIMITED, (SECOND) AXA INSURANCE UK plc, (THIRD) NORWICH UNION INSURANCE LIMITED, (FOURTH) ROYAL & SUN ALLIANCE INSURANCE plc and (FIFTH) ZURICH INSURANCE plc

Petitioners;

For

Judicial Review of the Damages (Asbestos-related Conditions) (Scotland) Act 2009

ญญญญญญญญญญญญญญญญญ

Petitioners: Dean of Faculty, Munro; Brodies LLP

Scottish Ministers: Dewar QC, Mure; OSSE

27 April 2009


[1] In this petition for judicial review, the petitioners contend that the Damages (Asbestos-related Conditions) (Scotland) Act 2009 ("the Act"), which was passed by the Scottish Parliament on 11 March 2009 and received the Royal Assent on 17 April 2009, is outwith the legislative competence of the Scottish Parliament on the grounds of its incompatibility with certain Convention rights. They rely in particular upon Article 6 of the European Convention on Human Rights (Right to a fair trial) and Article 1 of the First Protocol thereto (Protection of property). The petitioners also mount a challenge to the Act on grounds of irrationality, or Wednesbury unreasonableness, and arbitrariness. The Act has not yet come into force. The Scottish Ministers intend to make the appropriate statutory instrument within the next few days with a view to bringing the Act into force on
17 June 2009.


[2] The petitioners seek a first order in the petition. That is not opposed. It is anticipated that a first hearing can take place early in June. Meanwhile, the petitioners move for interim interdict to prevent the Scottish Ministers from bringing the Act into force before their challenge to its validity can be heard and determined.


[3] I heard argument on the motion for interim interdict over two days at the end of last week. The motion was opposed by the Scottish Ministers whose caveat was triggered. There was no appearance on behalf of the Advocate General, who is also named as a respondent to the petition but has not yet been served with the petition. Nor was there any appearance on behalf of any other parties who might claim to have an interest in supporting the validity of the Act.


[4] It is not in dispute that the Act was passed in order to reverse the decision of the House of Lords in Rothwell v. Chemical & Insulating Co. Ltd. [2008] 1 AC 281 in so far as that decision might otherwise be applied in Scotland. In that case, the House of Lords held that asymptomatic pleural plaques (i.e. areas of fibrous thickening of the pleural membrane surrounding the lungs) resulting from exposure to asbestos did not constitute damage capable of giving rise to a cause of action in damages for negligence.


[5] In light of the careful submissions advanced in argument before me, I should explain briefly what I understand to be the reasoning of the House of Lords in Rothwell. It was admitted that the exposure of the claimants to asbestos dust constituted a breach of the defendants' duty to them. The question was whether the claimants could show that they had suffered damage as a result of that breach of duty, so as to complete their cause of action in negligence (a cause of action in tort being complete only upon proof of damage). It was held that they could not. On the agreed medical evidence, the pleural plaques, although indicative of the extent to which an individual had been exposed to asbestos and had inhaled asbestos fibres, could not be categorised as a "disease" or an "impairment of physical condition" (per Lord Hoffman at para.10, quoting the judge's "unassailable" findings of fact). They did not cause any symptoms or increase the susceptibility of the individual to other diseases or shorten his expectation of life - in short, they had "no effect upon their health at all" (ibid at para.11). The plaques were not themselves causative of asbestos-related disease, or of any impairment of lung function or disablement (per Lord Scott of Foscote at para.63). They were not visible or disfiguring; and neither the inhalation of the fibres not the development of the pleural plaques involved any pain or physical discomfort (per Lord Scott at para.69). Other statements to similar effect appear in the other Opinions in the House of Lords. The effect of the evidence was summarised by Lord Phillips of Worth Matravers at para.10 of his judgment in the Court of Appeal, reported at [2006] ICR 1458, a passage relied on in the petition. Accordingly, the existence of pleural plaques could not suffice to make the negligent exposure to asbestos actionable. Indeed it appears that this was conceded throughout the litigation up until the House of Lords.


[6] The principal argument in the House of Lords concerned the "aggregation theory". A person who has developed pleural plaques may be apprehensive as to whether the presence of asbestos fibres in the lungs and pleura, of which pleural plaques are indicative, "may independently cause life-threatening or fatal diseases such as asbestosis or mesothelioma" and, in consequence, "a diagnosis of pleural plaques may cause the patient to contemplate his future with anxiety or even suffer clinical depression" (per Lord Hoffman at para.1); or, as Lord Scott put it (at para.63) "the diagnosis of the presence of pleural plaques may ... contribute to or heighten the anxiety of the individual that he may develop a life-threatening asbestos-related disease." Such anxiety was not of itself actionable. Nor was the risk that a life-threatening asbestos-related disease might subsequently develop. However, it was noted, again in accordance with well established principles, that, if the exposure to asbestos had caused damage (in the form of physical injury) and the cause of action in negligence was therefore complete, the claimant might, in addition to damages for that physical injury, also recover damages for the anxiety and for the risk that his condition might deteriorate in the future. The aggregation theory advanced by the claimants in the House of Lords was that even though the pleural plaques by themselves did not constitute damage, they did constitute damage when combined with the anxiety and the risk that the condition might worsen in the future. That theory was rejected.


[7] In the 20 years or more before Rothwell, as was noted by Lord Rodger of Earlsferry at para.79, employers and their insurers had settled many claims for damages by persons who had been exposed to asbestos at some point during their working lives and who were subsequently diagnosed as having asymptomatic pleural plaques. In the lead up to Rothwell, a large number of pleural plaque cases which were before the courts - I was told they number about 600, principally in the Court of Session - were sisted, to await the decision of the House of Lords. Rothwell was perceived as having changed the law and deprived a large number of claimants and potential claimants of their (ex hypothesi justifiable) right to compensation. Whether or not this is an accurate characterisation of the decision in Rothwell is beside the point. The decision gave rise to much concern. On
7 November 2007 there was a debate in the Scottish Parliament on a motion expressing concern about the ruling. On 29 November 2007 the Scottish Ministers announced their intention to bring in a Bill to deal with the situation. The Bill was introduced into the Scottish Parliament on 23 June 2008 with the stated objective of preventing the decision of the House of Lords in Rothwell, which was an English case, from having effect in Scotland. There is little doubt that, were it not for the Act, the Rothwell decision would be applied in Scotland: see e.g. Wright v. Stoddard International plc and Novartis Grimsby Ltd [2007] CSOH 173.


[8] The Act seeks to do this by enacting that asbestos-related pleural plaques are a non-negligible personal injury which constitutes actionable harm for the purposes of a personal injuries action. The substance of this provision is in section 1, which is in the following terms.

"1 Pleural plaques

(1) Asbestos-related pleural plaques are a personal injury which is not negligible.

(2) Accordingly, they constitute actionable harm for the purposes of an action of damages for personal injuries.

(3) Any rule of law the effect of which is that asbestos-related pleural plaques do not constitute actionable harm ceases to apply to the extent it has that effect.

(4) But nothing in this section otherwise affects any enactment or rule of law which determines whether and in what circumstances a person may be liable in damages in respect of personal injuries."

Section 2 does the same thing for pleural thickening and asbestosis which has not caused and is not causing impairment of a person's physical condition. Section 3 deals with limitation. It provides that, in an action for damages for personal injury where the damage claimed includes asbestos-related pleural plaques, the period beginning with 17 October 2007 (the day of the decision in Rothwell) and ending with the day on which the section comes into force is to be left out of account for purposes of limitation. Section 4 provides that, except in relation to claims which have settled or been determined before the Act comes into force, "sections 1 and 2 are to be treated for all purposes as having always had effect".


[9] There are three matters of particular importance to note in the above summary of the Act.

(1) The first is that, in stating that pleural plaques are a personal injury which is not negligible (and that they constitute actionable harm for the purposes of action of damages for personal injuries), the Scottish Parliament has not, as might appear at first blush, simply legislated into being a "fact" which is at odds with current medical expert opinion, so that the courts are required to award substantial damages for a condition which involves neither pain, physical discomfort nor any disability. The question whether pleural plaques are a non-negligible personal injury and constitute actionable harm for the purposes of an action of damages of personal injuries is a mixed question of fact and law (see per Lord Scott at para. 68). What section 1 is designed to achieve, as I understand it, is the completion of the cause of action in negligence, thus providing a "gateway" for the recovery of damages for the anxiety which is often consequent upon the discovery of pleural plaques and for the risk that the exposure to asbestos, and the penetration of the lungs by asbestos fibres, might in a particular case lead to a deterioration in the condition of the claimant in terms of the development of an asbestosis-related disease.

(2) Second, by virtue of section 4 of the Act, the provisions of section 1 are made retrospective. In other words, they can be relied upon by any claimant who has been exposed to asbestos in the past and who may already have developed pleural plaques or may do so in the future. It is this retrospectivity which provides the petitioners with their strongest argument. However, without such retrospectivity the main purpose of the legislation would be negated. Exposure to asbestos in working conditions was a particular feature of the shipbuilding industry and other heavy industries. Most of those industries have now gone; and in any case there has been widespread removal of asbestos from the working environment. Although cases may still arise of asbestos-related conditions resulting from future exposure to asbestos in the workplace, the vast majority of claims are likely to arise from exposure in the past.

(3) Third, section 3 of the Act excludes for the purpose of limitation the period between 17 October 2007, the date of the House of Lords decision in Rothwell, and the date of the coming into force of the Act. The likelihood is that when the Act comes into force, and time again starts to run for the purpose of limitation, there will be a significant number of actions raised on behalf of persons manifesting pleural plaques as a result of exposure to asbestos, particularly if there is perceived to be a risk that the limitation period in any particular case is about to expire. Counsel were unable to give any figures for the likely number of such actions, but it was, as I understood it, common ground this was liable to occur.


[10] For the petitioners, the Dean of Faculty advanced his submissions under two heads: prima facie case; and balance of convenience. Mr Dewar QC, for the Scottish Ministers, adopted the same approach in his response. I propose to do so too. No point was taken, so far as concerned this application for interim interdict, as to the interest of the petitioners, who are a number of insurance companies likely to have to meet substantial awards of damages in pleural plaque cases should the Act come into force.


[11] The challenge based on Convention rights was made under reference to Article 6 and Article 1 of the First Protocol. In developing his arguments on behalf of the petitioners, the Dean of Faculty emphasise the retrospective effect of the Act, though he made it clear that his challenge was not limited to that aspect. The 600 or so cases presently sisted would fall to be dismissed on the basis of the existing common law as explained in Rothwell. Now, however, because of the intervention by the Scottish Parliament in passing the Act, those cases will succeed and there will be an award of damages. So also, any new case in which it is proved that the claimant has pleural plaques caused by negligent exposure to asbestos which has already occurred will succeed, whereas it would have failed at common law. These cases, or at least this issue in these cases, are being decided not by an independent and impartial tribunal established by law, as was required by Article 6 of the Convention, but by legislative fiat. Further, just as a clearly established claim was a "possession" for the purpose of Article 1 of the First Protocol to the Convention, so also was a clearly established defence or immunity to a claim. The effect of the Act was to deprive the petitioners, or their insureds, of the cast-iron defence at common law or, in the language used in some of the case law to which I was referred, a legitimate expectation that they would succeed in defeating the claim. The Dean of Faculty recognised that the rights under Articles 6 and under Article 1 of the First Protocol were not unqualified. But where, he asked rhetorically, was the overwhelming public or general interest in interfering in this way? He emphasised the narrow class of persons sought to be benefited by this legislation - it did not seek to benefit all those who had been exposed to asbestos or who might develop a life-threatening asbestos-related disease, but simply those who were diagnosed as having pleural plaques, a condition which was not, and was not causative of, a disease or incapacity. If the medical opinion changed, and it became clear that pleural plaques were causative of some further disease or incapacity, then such people could recover damages under the common law - the Act was not needed for such cases. The Act only helps those who do not in fact have any disease or incapacity. It provides compensation were no compensation is justified. And it does so at enormous expense to insurers. Figures were given in Statement of Fact 18 in the petition for the likely cost to employers, and more particularly to the insurance business, if the Act came into force. It was averred that Members of the Scottish Parliament had failed to give adequate consideration to this likely cost. It was further averred that many of the speeches in the Parliament in support of the Bill betrayed a misconception that pleural plaques were indeed detrimental in themselves or causative of asbestos-related illness and for that reason required to be compensated. On a proper analysis, there was no public or general interest sufficient to justify overriding the Convention rights of the petitioners and others in their position.


[12] In the course of both parties' submissions I was referred to a large number of authorities on the interpretation of the Convention. I list them, and the other cases to which I was referred, at the end of this Opinion. For present purposes, I am concerned only with the question whether the petitioners have put forward a prima facie case that, in passing the Act, the Scottish Parliament has acted outwith its legislative competence; and with whether the strength of that prima facie case, if there is one, is such that it justifies interfering on an interim basis with the bringing into force of an Act passed by a democratically elected body. It would not therefore be appropriate for me to attempt to reach any concluded view on the merits of the petitioners' case or to embark upon any detailed analysis of the cases to which I was referred. That will be the subject of a full hearing as early as June. It is sufficient that I say that, in my opinion, the petitioners have demonstrated a prima facie case that both Articles 6 and Article 1 of the First Protocol are engaged in that the Act does appear to me to remove from the courts and determine in a manner adverse to the petitioners a critical question arising in all pleural plaque cases, namely whether the claimants in any such case have suffered damage so as to make the negligent exposure to asbestos actionable. Unless and until the Act comes into force, each of the cases currently sisted, at least insofar as it is based upon the existence of pleural plaques and not on other injury or damage, will fail, because at common law negligence is not actionable without proof of damage. If and when the Act comes into force, that line of defence will be removed. The pursuers in such cases will still, of course, have to prove other aspects of their case, such as negligent exposure to asbestos and quantum, but they will no longer have to prove, or attempt to prove, that the pleural plaques themselves constitute damage so as to make the negligence actionable. Mr Dewar submitted that it was always within the competence of the Scottish Parliament to alter the Scottish law of delict. I accept this. Insofar as the Act has prospective effect, this is a powerful point. But in so far as it has retrospective effect, the force of that submission is much reduced, since the Act retrospectively removes from the defenders in existing cases, and in new cases based upon exposure before the Act comes into force, a line of defence upon which they could legitimately expect to succeed. That brings Article 6 into play, or at least arguably so. Mr Dewar also argued, under reference to Article 1 of the First Protocol, that an immunity to a claim could not be a "possession"; however, it seems to me that if a certain claim is a possession (see Maurice v. France (2006) 42 EHRR 885 at paras.63-66), there is at least a good arguable case that a certain defence must fall into the same category.


[13] I have more difficulty with the petitioners' contention that the policy of the Act does not reflect any legitimate public or general interest. It is well-established that the courts will afford the legislature a wide margin of appreciation or, as it is put in the domestic context, will concede to the legislature a discretionary area of judgment in determining what is in the public or general interest: see e.g. Adams v. Scottish Ministers 2004 SC 665 at para.[27], per the Lord Justice-Clerk (Gill). The issue will always involve a detailed examination of the facts. I was initially attracted to the simple proposition underlying the Dean of Faculty's submissions, which emphasised the fact that the Act sought to compensate, at enormous expense to insurers, a narrowly defined class of persons who, although having been exposed to asbestos, had as yet suffered no illness or injury meriting compensation. But Mr Dewar explained that the Act seeks to compensate those in respect of whom it can be established, because of the presence of pleural plaques, that asbestos fibres has penetrated the lungs and the pleura. This seems to me to carry some conviction. While it appears to be true, on the available evidence, that such persons have suffered no physical injury or incapacity, they are more likely than others to suffer from anxiety that their exposure to asbestos dust, having caused penetration of asbestos fibres to the lungs and pleura (as evidenced by the existence of the plaques), will go on to cause an asbestos-related disease; and there is a risk, in such cases, that the penetration of asbestos fibres to the lungs and pleura will in fact cause such a disease. In those circumstances, the Scottish Parliament has taken the view that they ought to be entitled to claim compensation, if not for any present physical disability, then at least for that anxiety and the risk of the condition worsening. The arguments will no doubt be more fully developed at the first hearing. Whilst on a fact sensitive issue of this sort I cannot dismiss the petitioners' case as unarguable, and I therefore must hold that they have demonstrated a prima facie case, it does not seem to me on the arguments advanced so far that it is a prima facie case which should be regarded as particularly strong.


[14] The common law challenge is based on irrationality, Wednesbury unreasonableness and arbitrariness. The factual argument put forward on behalf of the petitioners is substantially the same as that discussed in the preceding paragraph. Mr Dewar argued, under reference to para.[57] of the opinion of
Lord Nimmo Smith in Adams v. Advocate General 2003 SC 171, that an Act of the Scottish Parliament was not susceptible of challenge on these grounds. That raises an interesting point. However it is not necessary to decide it in the present case since it is clear that the common law challenge, which is based on the same factual argument, can be no stronger than the challenge based upon Convention rights.


[15] I turn therefore to the balance of convenience. The argument for the petitioners was essentially this, that if the Act was brought into force before their challenge to its lawfulness was resolved, it would lead to a great deal of unnecessary expense and inconvenience. The coming into force of the Act would restart the limitation period for claims; and it could be expected that many new claimants would bring their actions almost immediately for fear of their becoming time-barred if they were to delay. Some 400 claims had apparently been intimated but not yet started. Further, in the 600 or so sisted cases, agents would no doubt enroll motions to recall the sist. In all those cases, defences would have to be lodged. The cases would be defended, inter alia, on the ground that the claimant had suffered no actionable loss or damage and, in so far as the claimant relied upon the provisions of section 1 of the Act, that the Act was ultra vires. The point about the validity of the Act would therefore be taken in very many cases, causing unnecessary expense and duplication of effort. It would be a waste of legal expense and of court time. On the other hand, the interests of claimants would not be prejudiced if interim interdict was granted and the Act did not come into force until the determination of the present proceedings. Their condition was asymptomatic and did not require immediate progress towards the award of compensation. He argued that the court should seek to maintain the status quo ante, which in this case was represented by the existing common law as interpreted in Rothwell.


[16] For the respondents, Mr Dewar accepted that there might be cases where, when the Act came into force, claimants would feel the need to raise actions promptly to avoid them becoming time-barred. No figures were available as to how many such cases there might be. However, in practice it was likely that, as soon as they were raised, any such actions would be sisted pending the determination of the challenge to the validity of the Act. So also, any motions to recall the sist in the 600 or so sisted cases were likely to be refused pending the determination of the challenge to the Act. There was little risk, therefore, of a plethora of live actions in which the same point as to the validity of the Act was litigated. He submitted that the interests of potential claimants should also be taken into account. Parliament had taken a certain view and such claimants had had to wait long enough already. Although any future actions might have to be sisted until the challenge was resolved, bringing the Act into force would represent progress for them. As to the status quo ante, he submitted that the Act was restoring the position to what it had been, or had been perceived to be, before Rothwell. The better course, therefore, was to refuse interim relief. Even if the commencement order were made now, the Act would not come into force until 17 June. By then there would have been a first hearing and possibly even a decision on the petition. The Lord Ordinary hearing the petition would be in a better position to decide whether to grant interim relief at that stage by way of interim suspension of the commencement order.


[17] In my opinion it would be unsatisfactory to leave the question of interim relief until the first hearing sometime early in June. If a commencement order had by then already been made, and the Act was due to come into force on 17 June, it would, so it seems to me, be unsatisfactory if the court was asked at that stage to suspend ad interim the commencement order and put on hold the coming into force of the Act. Once the commencement order is made, it seems inevitable that people will proceed on the basis that the Act will come into force. There may be cases where the limitation period will expire very soon after the Act comes into force. In such cases expense will be incurred in preparing to commence legal proceedings. In any event, expectations will have been raised that the Act will come into force on that date. Any court considering the matter would be likely to regard that as the status quo and the arguments would then be skewed against the grant of interim relief.


[18] The arguments based upon what is likely to happen if the Act comes into force appear to me to be fairly evenly balanced. Although there is theoretically a risk of a plethora of actions, both in the Sheriff Court and in the Court of Session, in which pleadings will be exchanged and expense incurred, the likelihood in reality, subject to any views expressed by the Lord Ordinary hearing the petition at the first hearing in June, is that some claimants will issue proceedings which will then be sisted, probably of consent. Similarly, subject to what happens at the hearing in June, I would not expect the sist to be recalled in the cases currently sisted. In practice, the present petition will be the vehicle by which the validity of the Act is tested and it is likely that any actions which depend for their success on the terms of the Act will simply be put on hold until the fate of these proceedings is known. There is therefore no strong reason of convenience for stopping the Act coming into force. In those circumstances I would be reluctant to interfere with the democratic process by granting interim interdict to prevent the Scottish Ministers taking the appropriate action to bring it into force. I agree with Mr Dewar that potential claimants who might wish to take advantage of the Act have an interest in seeing it on the statute book, even if they have to wait for their claims to come to court.


[19] Both parties asked me to take account of the strength of the petitioners' case. The likelihood of success is a factor to be taken into account as one of the elements in assessing the balance of convenience: Toynar Ltd v. Whitbread & Co plc 1988
SLT 433, 434C. I would also take account of the fact that the court is being asked to grant interim interdict to prevent the coming into force of an Act of the Scottish Parliament and is therefore being asked to call a temporary halt to the democratic process, in circumstances where the main issue, that of the public or general interest, is one in which the courts recognise that it is the Parliament, not the courts, who have to make the judgement as to where the public or general interest lies. In those circumstances, I would not grant interim interdict unless I was of the view that the strength of the attack on the validity of the Act was such that it should overcome the court's reluctance to interfere with the acts of a democratically elected body. In Infant and Dietetic Foods Association Ltd v. Scottish Ministers 2008 SLT 137, on a motion for interim suspension of a Scottish statutory instrument, Lord McPhail (at para.[30]) adopted an approach adumbrated by Lord Goff of Chieveley in R v. Secretary of State for Transport, ex parte Factortame (No 2) [1991] AC 603:

"In the end, the matter is one for the discretion of the court, taking into account all the circumstances of the case. Even so, the court should not restrain a public authority by interim injunction from enforcing an apparently authentic law unless it is satisfied, having regard to all the circumstances, that the challenge to the validity of the law is, prima facie, so firmly based as to justify so exceptional a course being taken."

I propose to follow that approach. I have already indicated that the petitioners have shown a prima facie case but that, on the question whether the interference with their rights under Article 6 and Article 1 of the First Protocol is justified in the public or general interest, I do not regard that prima facie case as a particularly strong one. In those circumstances it seems to me that I should not grant interim interdict.


[20] I therefore refuse the motion.

NOTE

Cases and textbooks referred to in argument:

Stran Greek Refineries v. Greece (1995) 19 EHRR 293

Zielinski v. France (2001) 31 EHRR 19

Smokovitis v. Greece (ECHR, unreported, 11 April 2002, BAILII: [2002] ECHR 416)

Lecarpentier v. France (ECHR, unreported, 14 February 2006, BAILII: [2006] ECHR 135)

Achache v. France (ECHR, unreported, 3 October 2006)

Pressos Compania Naviera S.A. v. Belgium (1996) 21 EHRR 301

Maurice v. France (2006) 42 EHRR 42

DS v. HM Advocate 2007 SC (PC) 1

Somerville v. Scottish Ministers (No 2) 2008 SC (HL) 45

R (Anufrijeva) v. Secretary of State for the Home Department [2004] 1 AC 604

Whaley v. Lord Watson 2000 SC 340

Adams v. Advocate General 2003 SC 171

Adams v. Scottish Ministers 2004 SC 665

R (Countryside Alliance) v. Attorney General [2008] 1 AC 719

Toynar Ltd v. Whitbread & Co plc 1988 SLT 433

R v. Secretary of State for Transport, ex parte Factortame (No 2) [1991] AC 603

Infant and Dietetic Foods Association Ltd v. Scottish Ministers 2008 SLT 137

Bennion on Statutory Interpretation, 5th ed, pp.241-2

De Smith's Judicial Review, 6th ed., para.3-012


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