Heneghan v Manchester Ship Canal; Heads I Win, Tails You Lose? - Charles Feeny & Sammy Nanneh, Contributing Editors at Pro-Vide Law

18/05/16. Following the Fairchild¹ decisions, Defendants and insurers feared the extension of the modified test of causation to lung cancer claims. This was a real concern because lung cancer, with its association with smoking, is a far more prevalent condition than mesothelioma. The question of whether to extend the Fairchild exception to claims concerning carcinoma of the lung was rightly regarded by both Claimants and Defendants as a difficult and unpredictable issue to resolve. The potential for a floodgate of successful and lucrative claims against Defendants and Insurers was for a considerable period contained through an equilibrium of economic settlements, indicative of the underlying factual and legal uncertainty in proving such claims.

The Court of Appeal have now confirmed the extension of the Fairchild principle to cases of carcinoma of the lung in Heneghan v Manchester Ship Canal². The Defendants argued for the extension of the Fairchild principle so that any damages awarded against them could be calculated on the basis of apportionment pursuant to the decision of the House of Lords in Barker v Corus UK Limited³. Although Section 3 of the Compensation Act 2006 reversed the effect of Barker by entitling Claimants to full compensation on application of the Fairchild exception, this legislation is restricted to mesothelioma claims specifically, and does not extend to carcinoma of the lung.

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The Defendants argued successfully before Mr Justice Jay that the Fairchild exception, with apportionment, should apply to cases involving carcinoma of the lung. This was particularly so following Professor Stapleton’s analysis, distinguishing between the “what” question and the “who” question⁴ . The “what” question is concerned with whether a particular physical agent was causative of a condition. Mr Justice Jay accepted that on the facts in Heneghan, this question could be resolved on a conventional basis. In other words, “but for” the exposure to the asbestos agent the Claimant would not have contracted the condition. In relation to the “who” question, Mr Justice Jay considered, on the basis of the expert evidence, that the risk caused by the respective exposures was stochastic. Accordingly, the same problem arose in relation to causation as in mesothelioma cases. Namely, it was not possible to say on the balance of probabilities that a particular exposure by a particularly Defendant was in fact causative. Having reached this conclusion, the Judge held that it was appropriate to apply Barker and award damages on an aliquot basis. The Court of Appeal affirmed Mr Justice Jay’s line of reasoning.

On first reading, in particular having regard to the findings on expert evidence, the conclusion appears reasonable. However, on further consideration a deep problem arises, particularly in light of comments made by both Mr Justice Jay and the Court of Appeal in relation to the position of a majority exposer who was not pursued because of solvency issues.

In Heneghan, the Claimant’s father was employed by each of six Defendants and by a seventh employer who was not subject to a claim. On the Judge’s findings in accordance with agreed apportionment, the six Defendants had each exposed the Deceased to 46.9 fibre/ml years of asbestos dust, which constituted 35.2% of the total asbestos exposure. The respective Defendants contributed between 2.5% and 10.1%. The other employer, who was not sued, was therefore responsible for 56% of the total exposure and for an exposure in excess of 25 fibre/ml years, the level associated with a doubling of risk of lung cancer due to asbestos exposure. On these findings, the Judge would have held, if that employer had been a Defendant, that it was responsible for most of the exposure and that this exposure was in itself sufficient to double the risk of the Deceased contracting carcinoma of the lung.

In paragraph 61 of his judgment, Mr Justice Jay stated that he would have had no difficulty in concluding that the exposure with the unsued employer was sufficient to prove the claim on the balance of probabilities as a matter of “basic arithmetic”. In other words, a doubling of the risk would be sufficient to prove causation on a conventional basis. In the Court of Appeal at paragraph 55, Lord Justice Sales stated obiter in relation to this assertion that “it is not immediately obvious to me that the Judge was wrong”. Paradoxically, and perhaps unhelpfully for a satisfactory resolution of the problem presented by causation of carcinoma of the lung claims, both parties argued that these remarks of Mr Justice Jay were incorrect. The Claimant was seeking to achieve a situation in which full compensation was payable by each Defendant who had materially contributed to the contraction of the condition, applying the case of Bonnington⁵. The Defendants wished to achieve a solution based on apportionment which would include aliquot damages in respect of the unsued employer, that is 56% of the total claim.

The deep problem presented by a clear majority exposure, in itself capable of doubling the risk, can be best illustrated by varying the facts of Heneghan.

Assume that the Claimant was exposed to asbestos for a total of 100 fibre/ml years, with D1 being responsible for 85 fibre/ml years and D2 for 15 fibre/ml years. On this basis, epidemiological evidence might reasonably conclude that D1 was responsible for an increase of 4.25 from the background risk, whereas D2 was responsible for an increase of 0.75. Accordingly, there would have been a five-fold increase in risk from asbestos exposure and a court could reasonably conclude that asbestos had been causative of the carcinoma of the lung, an affirmative answer to the ‘what’ question. In this context, both Mr Justice Jay and the Court of Appeal were seemingly untroubled by the reservations expressed by Lords Phillips and Rodger in the Sienkiewicz and Willmore cases about the difficulty of applying epidemiological evidence to proof of causation on a conventional basis⁶ .

In these circumstances, the first reasonable question to ask is whether causation could be proved on a conventional basis against either Defendant. Following the approach of Mr Justice Jay and the Court of Appeal, it would seem reasonable to conclude that with a 4.25 increase in risk and a 85% contribution to overall exposure, the Claimant would not have contracted carcinoma of the lung absent this exposure. Whilst it is possible that the additional exposure with D2 was critical, this could not be said to be probable. It would seem to follow from this that the Claimant should be entitled to 100% damages against D1, which is the usual position where a Claimant has proved on the balance of probabilities that the Claimant would not have contracted the relevant condition absent the Defendant’s breach of duty.

On these facts, if D1 was not solvent or insured and the action only proceeded against D2, then it would appear, following Heneghan, that the Claimant will be entitled to 15% of the total damages against D2.

It could reasonably be assumed that if both Defendants were pursued, the Claimant would not get 115% of its total loss, but rather there would be an apportionment in accordance with the contributions to exposure. This would produce a reasonable outcome if both Defendants were solvent, but there are frequent situations in this type of litigation, as evidenced in Heneghan itself, where not all the relevant parties can be brought before the court. On this basis, applying a rule whereby 100% can apply on proof of conventional causation and an aliquot proportion on proof of contribution to risk, would create an excessive liability on Defendants who were regularly the subject of action.

This anomalous situation arises for two related reasons. First, both parties for different reasons sidestepped the obvious starting point of debate, namely whether the “who” question could in fact be answered on the balance of probabilities, if there was sufficient evidence of exposure with a particular Defendant. Secondly, Mr Justice Jay made a finding on the expert evidence that the risk of contracting carcinoma of the lung was stochastic, thereby creating an analogy with mesothelioma. However, this analogy is not precise.

There are material differences in the scientific understanding of the causation of carcinoma of the lung by way of contrast with mesothelioma. The crucial difference is that lung cancer has a clear dose response, which means that the risk is not random in the same way as mesothelioma. As Stapleton writes,

“The problem for the mesothelioma victim is that, it cannot be assumed that relative quantities of inhaled fibre correlate with the relative probability of contribution to the development of the victim’s disease.”⁷

However such calculations can be made in relation to carcinoma of the lung, as evidenced by Mr Justice Jay’s “basic arithmetic” and the 85% example given above.

The Court of Appeal stated in Heneghan that “the epidemiological evidence permitted the contribution to the risk of cancer attributable to an individual Defendant to be quantified but it went no further than that”⁸. This comment is clearly inconsistent with the suggestion that the 56% exposure, which more than doubled the risk, would amount to proof on a conventional basis. In this context, the “who” question could be answered on a conventional basis.

The relevant parts of the judgments are obiter and no doubt there will be further litigation in a majority exposer case. If the position is reached, as apparently accepted by Mr Justice Jay and Lord Justice Sales, that there will be proof on a conventional basis and 100% recovery in these circumstances then it is difficult to square the outcome of aliquot damages for lesser proof with that in other cases such as Gregg v Scott⁹. There, a Claimant proved that a Defendant through breach of duty substantially contributed to the risk of the Claimant contracting a condition, but nonetheless did not prove enough to satisfy the court on the balance of probabilities. The case against the minority exposers could similarly be viewed as failing because of insufficient proof rather than impossibility of proof justifying the application of the Fairchild exception.

It is not clear how this problem can now be unravelled. Further litigation is inevitable and starting the discussion at the most obvious point may ultimately achieve a fairer resolution.

Charles Feeny
Sammy Nanneh
Contributing Editors at Pro-Vide Law