Compensation for asbestos-related disease – a report from a recent conference
The recent Berrymans Lace Mawer LLP occupational disease conference held in Manchester provided a useful update on the key developments in the field of medico-legal work undertaken by the IOM scientists, particularly on the impact of the findings of the Asbestos Working Party (AWP), which reports to the General Insurance Research Organisation, and key legal developments in asbestos claims in the UK during the past year.
The Asbestos Working Party re-evaluation of the total cost of asbestos claims to the UK insurance industry
Based on data from 2004, the insurance industry predicted the peak number of mesothelioma deaths to be around 2000 per annum, which was somewhat higher than the predictions from HSE (1800 per annum), although both parties agreed that the peak would be reached in around 2013.
The AWP considered a number of different model structures — a simple ‘latency’ model, a birth cohort model and the HSE/HSL model structure — to project the future level of population mesothelioma deaths. Although each of the models used fitted the past data well, they produced materially different future projections. This is the main reason for the wide range in estimates of the future cost of mesothelioma-related claims (£5bn to over £20bn) made by the AWP.
A 2005 paper by Professor Julian Peto1 predicted 1950 to 2450 deaths per year between 2011 and 2015. The HSE in 20092 predicted mortality amongst all males is expected to keep increasing, reaching a peak at around 2,040 deaths in the year 2016, with a rapid decline following the peak year. Around 91,000 deaths are predicted to occur by 2050 with around 61,000 of these occurring from 2007 onwards.
However, the cost of claims in the period 2004 to 2008 was more than double that expected, at £0.9 billion, which suggests that earlier estimates may not be reliable.
The AWP now estimates the total cost of mesothelioma claims to the UK insurance industry will rise from £4.7 to £11.3 billion. This is due to a number of factors, including:
- Better detection of the illness during the life of the Claimant
- Increased awareness of the opportunity to claim
- Aggressive marketing by solicitors for industrial injury claims
- Large and well publicised payouts
- The Association of British Insurers (ABI) tracing code
- Increased claims success due to Sienkiewitz* and others
- An underestimation of the risk of exposure to amosite during the 1970s.
* The Sienkiewitz appeal in the Royal Courts of Justice (Case No: B3/2009/0096) was satisfied because the Claimant was able to demonstrate that exposure had materially increased the risk of Mrs Costello (the Deceased) developing mesothelioma. Therefore although the tortious exposure had, on the original judge’s findings, made only a modest contribution to the risk of mesothelioma, the claimant should recover full verdict damages.
It is estimated that asbestos related lung cancers account for about 1% of total UK lung cancers but the level of claims projected in 2004 was also somewhat lower than the actual 2009 values. The projections in 2004 estimated a peak of 300 deaths/annum due to asbestos related lung cancers. This is now thought likely to rise to between 900 to 1000 deaths/annum by the end of this decade.
In summary, the number of mesothelioma and cancer claims are likely to be stay at a higher level for longer than projected and their corresponding cost to the UK Insurance market is likely to be substantial for at least the next twenty years.
The recent developments in case law that have lead to difficulties in defending the position of liability in mesothelioma cases
The predominant issue in the legal forum is currently what level of exposure constitutes a material increase in risk or to put it another way what is the threshold of defensible exposure?
In the landmark cases of Sienkiewitz v Grieff and Wilmore v Knowsley MBC there appeared to be no analysis made by the judges of the process by which a court should consider whether or not the threshold test is met, the strong indication being anything above background level will suffice.
Both cases (and others) are to be further appealed, the court in this case being invited to consider what ‘material increase in risk’ means in the context of the Fairchild exception to the usual rule on causation. It is likely that this final ruling will set the bar when determining the defensibility of liability in mesothelioma claims.
For more information about the conference and the work of our experts contact Andy Stelling at our Chesterfield office.
References
(1) The expected burden of mesothelioma mortality in Great Britain from 2002 to 2050 - British Journal of Cancer (2005) 92, 587–593. doi:10.1038/sj.bjc.6602307 www.bjcancer.com Published online 25 January 2005.
(2) Projection of mesothelioma mortality in Great Britain. Prepared by Health and Safety Laboratory for the Health and Safety Executive (2009) Research Report RR728