31 March 2017 Edition 179
BC DISEASE NEWS A WEEKLY DISEASE UPDATE
CONTENTS
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Welcome Welcome
PAGE 3 Welcome to this week’s edition of BC Disease News.
Unravelling ‘Issue Based In the last week, Elizabeth Truss has announced the launch of the much awaited, Costs Orders’: Lyons v Fox Government consultation on how the discount rate should be set in the future. Williams LLP [2017] EWHC Elsewhere, the SRA have intervened into the practice of Asons Solicitors, closing 532 (QB) the firm with immediate effect and suspending the practising certificate of Director Kamran Akram. PAGE 4 In this week’s feature, we look at the construction of one of the most commonly
pleaded statutory duties in asbestos claims, s.63(1) of the Factories Act 1961 Truss Announces Launch of (preceded by s.47(1) of the Factories Act 1937) and consider what needs to be Consultation into Discount shown in order to establish liability under this section. Rate Any comments or feedback can be sent to Boris Cetnik or Charlotte Owen. PAGE 5 As always, warmest regards to all. Asons Solicitors Become Coops Law
SUBJECTS PAGE 6
Issue Based Costs Judgment – Discount Rate Consultation Launched – SRA Closes Assignment of CFAs Asons Solicitors – Regulator Drops Investigation Of S&G – Cabin Air Quality Research - Factories Act 1961/1937 – An Introduction To S.63/47. PAGE 7
ASIC Investigation into S&G Dropped
Cabin Air Quality Studies Published
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Feature Mesothelioma Series: Part 7: Factories Act 1961/1937 – s.63
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not successful on every last issue Unravelling ‘Issue Based ‘… have regard to all the cannot, of itself, justify an issue- Costs Orders’: Lyons v circumstances including (but not based costs order. limited to): 5. The courts recognise that in any Fox Williams LLP [2017] i) conduct – sub- litigation, especially complex paragraph (4)(a): commercial litigation but EWHC 532 (QB) ii) partial success – sub- including personal injury litigation, paragraph (4)(b); and any winning party is likely to fail on It is well known that the default position in iii) offers to settle – sub- one or more issues in the case civil claims is that the ‘costs follow the paragraph (4)(c)’. (possibly issues on which the losing event’, i.e. the losing party pays the winning party could have taken steps to party’s costs, but not all instances are so Helpfully, the judge also outlined and protect himself, at least to an black and white. ‘Issue based costs orders’ summarised the main propositions derived extent, to costs liability). That point are made in ‘suitably exceptional’ cases from the authorities on issue based costs is frequently made… when a party obtains a judgment, orders, which are listed in the White Book at 6. In considering the circumstances ultimately in favour of their defence or para 44.2.7 as: of the case the judge will have claim, but fails to succeed in arguments regard not only to any Part 36 made during trial proceedings, resulting in ‘1. The rules themselves impose no offers made but also to each a reflective, ‘proportionate’ assessment of requirement to the effect that an party’s approach to negotiations awards undertaken by a judge, as was issue-based costs order should be (insofar as admissible) and previously demonstrated in the authority of made only “in a suitably general conduct of the Multiplex Constructions (UK) Ltd v Cleveland exceptional case”, and none is to litigation … However, the court Bridge UK Ltd [2008] EWHC 2280 (TCC). be implied, although “there needs should not approach r.44.2(4)(c) to be a reason based on justice” on the basis that it supports a Issue based costs has been most recently for departing from the general special “near miss” rule that may considered in the High Court case of Lyons rule, and that the question of the be invoked to penalise a v Fox Williams LLP [2016] EWHC 532 (QB), in extent to which costs of a successful party in costs, because, which the claimant brought an action in particular issue are to be to do so, would be to seek to use professional negligence against the disallowed should be left to the r.44.2(4)(c) to give to “near miss” defendant, a firm of solicitors, for advice in evaluation and discretion of the offers an effect similar to Part 36 respect of his Accidental Death and judge. offers, and would introduce an Dismemberment (AD&D) policy with his 2. The reasonableness of taking unwelcome degree of employer, EY. The claimant was failed points can be taken into uncertainty… unsuccessful at first instance, receiving zero account, and the extra costs 7. In assessing a proportionate costs damages. In subsequent proceedings in associated with them should be order the judge should consider respect of costs, it was argued that the considered. what costs are referable to each order made should take account of several 3. Where the circumstances of the issue and what costs are common lines of defence which had not succeeded. case require an issue-based order to several issues. It will often be These failings, it was contended, could be in the form of an order expressed reasonable for the overall winner regarded as ‘issues’, which para CPR 44.7.2 by reference to the costs of the to recover not only the costs of the White Book and CPR 44, describe as: issue, that is what the judge specific to the issues which he has should make; however, generally, won but also the common costs…’ ‘… anything upon which, standing because of the practical alone, a court could grant relief, difficulties which this causes, the In this particular case, the claimant but it may mean something less judge should hesitate before contended that there were two elements of than that. In any event, it has to be doing so and, where practicable, the case which placed them in the ‘partial something arising in the the order should be expressed as success’ bracket in CPR 44.2. The judge proceedings upon which one a percentage or with reference to agreed, finding that the claimant was not party can be said to have been a distance period of time. successful on the main issues but not every “successful”’. 4. There is no automatic rule line of defence raised by the defendant requiring an issue-based cost prevailed. However, it was also pointed out Turner J, at the High Court, clarified that order in the form of a reduction of that it was extremely detrimental to the when making a ‘different order’ and a successful party’s costs if he loses claimant’s appeal that, despite accepting departing from the normal approach, a on one or more issues…The mere two Part 36 offers in respect of costs, they judge must (per CPR 44.2): fact that the successful party was
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rejected a Calderbank offer of £500,000 to insurance premiums and settle the claim on 5 February 2016. Truss Announces taxpayers’. Launch of Consultation In refusing to make an ‘issue based cost There has been no indication of how, or if, order’ he stated at para 16: into Discount Rate the rate will change following this consultation. ‘In my judgment, despite the fact Yesterday, Liz Truss announced the launch that the defendant fought and lost of the much awaited, Government A summary of responses to the 2013 on certain issues, there are sound consultation on how the discount rate consultation paper ‘Damages Act 1996: reasons not to make an issue should be set in the future. The consultation The Discount Rate: Review of the Legal based costs order to reflect this. I follows the reduction of the discount rate Framework’ was also published yesterday note the following features: from 2.5% to -0.75% and hopes to devise a and can be accessed here. i) The over-arching result fairer framework, method and frequency was complete victory for for calculating and establishing the Elsewhere, The Damages (Personal Injury) the defendant on all discount rate. 1 The consultation period will (Scotland) Order 2017 was passed by issues; last six weeks, ending 11 May 2017 at which Scottish Ministers, mirroring the (-)0.75% rate ii) The issues upon which the point responses will be collated and for personal injury awards already adopted defendant succeeded published. 2 by England and Wales, and is scheduled to 3 were, by some margin, take effect from 28 March 2017. the most important ones The aim of the paper is said to be: and those upon which In future editions of BCDN, it is foreseeable the greater part of the ‘- To obtain evidence of how that we will report on the effects of this resources of time and claimants actually invest awards action taken by the Scottish Parliament. effort had been of damages for future financial What will be the impact on the Bill on expended by the parties; loss and how they are advised to Expenses and Funding of Civil Litigation (the iii) This was a commercial invest; legislative programme for civil justice case of a complexity - To invite views on what (if anything) reforms in Scotland? which almost inevitably should be done to make the meant that no side would system for the setting of the The full consultation document for the be successful on each personal injury discount rate better setting of the discount rate can be and every area of and fairer; and accessed here. dispute; - To obtain evidence on the use of iv) The defendants had not periodical payment orders and to Asons Solicitors Become taken a “kitchen sink” invite views on whether, and if so approach to the litigation how, their use instead of lump sum Coops Law as a whole as is awards of damages for future evidenced by the financial loss should be It was revealed last week that Asons settlement of issues which encouraged’. Solicitors has ceased trading and all would otherwise have employees have reportedly been TUPE’d been left to the court to Following significant criticism from the across to, Banks Solicitors, trading as Coops adjudicate upon insurance industry about the new rate and Law operating from the same registered comprising the costs of the likely impact it will have on increased address as Asons. an application relating to insurance premiums and extra cost to the the jurisdiction issue NHS, Truss made the following statement to Asons was set up in 2008 and was owned under the 2009 Parliament: by Imran (the CEO) and Kamal Akram agreement and also in (Solicitor and the SRA approved manager), respect of a separate ‘We must have a justice system 2 of 5 Akram brothers. Another brother and Accidental Death and that works for all. I fully recognise solicitor Bilal Akram later became the Dismemberment policy’. the impact that the discount rate compliance manager.
has, not just on claimants It is evident therefore, from the nature of this (including some of the most Relatively little is known about Banks judgment that orders of this kind are not vulnerable in society), but also on Solicitors/Coops Law except that Irfan automatically made. defendants in both the public and Akram, one of the 5 Akram brothers, is the
private sectors, and the further Director and it operates as an ABS. This is the impact this has on consumers’ PAGE | 4
most recent addition to the network of companies owned and controlled by the Akram brothers, Bilal, Irfan, Haroon, Kamran and Imram. We have shown the relationship between the main Asons entities in the diagram below:
In addition to this, there are several other peripheral companies that have also been set up by the Akram brothers whose nature of business vary from, property, fuel retail and finance.
In 2013 Dr Imram Akram, announced an ambitious expansion plan, including, doubling in size by taking on 300 new employees, investing £8m into creating a new office building with a gourmet restaurant and glass projection technology and opening branches in Singapore, Dubai, New York and Pakistan as well as London. This was part of their intention to be ‘the last man standing’ after the Jackson reforms.
However, these plans did not pan out, as was shown last week, when the full accounts of Asons made up to November 2016 were filed with Companies House and showed a £2.1m loss for the year ending 31 May 2016 (almost exactly the amount paid to Yourclaimslawyer Ltd). The full accounts can be accessed here.
Following these results, the Solicitors Regulation Authority have confirmed that they have shut down Asons Solicitors, taken possession of all documents, papers and money held by the firm and have automatically suspended the practising certificate of its Director, Kamran Akram. 4Kamran is the only SRA approved manager registered with Asons Solicitors, the co-founder of Asons – Dr Imram Akram is not a solicitor. Whilst the SRA have no recourse against Imram, he has stepped down as CEO. It is thought that this will not affect the operation of Coops Law. 5
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In a statement yesterday, the SRA stated: and has made this payment via personal Where both parties to an existing contract means, as he is no longer a director of and a new party agree that the new party ‘The Solicitors Regulation Authority (SRA) has Asons’. 6 should take over the benefits and burdens intervened into the practice of Kamran of a contract that is not an assignment but Akram at Asons Solicitors, 40 Churchgate, So what does this mean for the claims is instead known as a novation i.e. the old Bolton BL1 1HL. The grounds of intervention previously handled by Asons on a contract has been rescinded. If the old are breaches of the SRA Principles and Conditional Fee Agreement (CFA) basis? contract is to be breaches of the SRA Code of Conduct. The We discuss this in the article below. replaced with a new one this must be practising certificate of Kamran Akram has compliant with post- April 2013 CFA’s and been automatically suspended, so he as such will not allow the recoverability of cannot practice as a solicitor. An Assignment of CFAs success fees or ATE premiums from the intervention means the SRA has closed a losing opponent from the date that the CFA firm with immediate effect. It will stop the We discussed the assignment of CFAs in had been terminated. If there is no firm from operating, take possession of all edition 154 of BC Disease News and it was alternative contract then on the face of it documents and papers held by the firm, predicted then that this issue would there is no valid retainer and so there will be and take possession of all money held by become ever more prominent in the no recovery of any costs incurred from the the firm (including clients' money). It is not personal injury market as reforms take hold date the original CFA was rescinded save responsible towards employees or trade and firms acquire and merge in order to for certain disbursements. creditors of firms that it has intervened in. adapt and survive. The SRA has appointed an agent to deal There has been much case law concerning with all matters currently held by Asons Indeed, this topic has, in relation to the the assignment of CFAs, starting with the Solicitors. The agent will assess all on-going Asons saga, re-emerged just as the case of Jenkins v Young Brothers Transport matters and deal with those of greatest Supreme Court handed down their decision Ltd [2006] EWHC 51. The case concerned a need first. The SRA's archive team will take in Plevin v Paragon Personal Finance pre-LASPO CFA where the solicitor had control of all documents held by the firm. Limited [2017] UKSC 23 this week in which moved from Firm A to Firm B and then again Clients of Asons Solicitors do not need to the court held that a CFA, is, in principle, to Firm C and the CFA was assigned with contact either the agent or the SRA at this assignable. (The specific facts of this each move. The High Court relied upon the time’. judgment will be discussed in greater detail ‘conditional benefit principle’ which is an in next week’s edition of BC Disease News). exception to the general rule that the Since this development, Asons have been burden under a contract for personal directing all queries regarding costs to Path It is important to consider the law that service cannot be assigned and held that Business Recovery, an insolvency firm. governs the assignment of CFAs which are as the claimant had followed the individual essentially a contract between a solicitor’s solicitor from firm to firm this indicated that Elsewhere, Bolton County Council have firm and its client. It has been said that CFAs he was motivated by ‘personal trust and confirmed that the controversial £300,000 should be regarded as personal contracts, confidence’ vested in that particular grant which was awarded to Asons last as it is a contract for the solicitor’s firm to solicitor and this justified the burden being year, has now been repaid. The acquisition provide a service personally to the assigned. The judge in this case was eager of Asons by Coops Law is a breach of the claimant and as such is not the same as a to point out that this exception should not 7 terms of the grant and a notice to terminate contract to purchase goods. be interpreted beyond the scope of the the grant was delivered to Asons on facts of the case. Monday. Following this, full payment was There are a number of decisions which made. In an announcement made on confirm that a personal contract is not However, subsequent cases, including behalf of Bolton Council and Asons capable of assignment, however, even if it Jones v Spire Healthcare [2016] 3 Costs L.O. Solicitors, the Council said: is deemed to be, there remain a number of 487, have held that Jenkins established a potential issues. For example, all contracts general principle that both the benefit and ‘A former director of Asons Solicitors, have what are termed benefits and the burden of a CFA can be validly Kamran Akram, contacted the council burdens. CFAs are no exception to this and assigned from one firm to another; and that regarding the grant of £300,000. When he in a solicitor-client retainer the benefit of the this principle is not restricted to the situation applied for the grant, he had not foreseen contract from the solicitor’s point of view is where the client’s agreement to the transfer the financial situation that Asons now finds the right to payment from the client and the is motivated by a relationship of personal itself in. Furthermore it is a great regret to burden on the solicitor is the obligation to trust and confidence with the fee earner him that Asons, the Bolton firm which he work for the client. The general rule (subject who is moving from the first to the second founded, is no longer trading. He offered to very few exceptions) is that the benefit firm. 8 Bolton Council £300,000, the full sum of the can be assigned but the burden cannot. original grant provided to the company
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The position is different if the existing CFAs regulator, Australian Security Investments had awarded cabin air quality research have already been terminated, prior to Commission (ASIC), into the accounts of contracts to a consortium of the Fraunhofer their reassignment. This issue arose in the Slater and Gordon (S&G). It has been Institute for Toxicology and Experimental case of Budana v Leeds Teaching Hospitals announced this week that the regulator has Medicine and the Hannover Medical
NHS Trust (Kingston-Upon-Hull County Court, concluded its investigations, finding that School. 11 Last week, EASA published the 2016) in which Firm A ceased carrying out there had not been any breach of law on results, along with another study which personal injury work and implemented a the part of S&G. 9 characterised the chemical composition of process of unilateral file transfer to Firm B. some turbine engine oils, including pyrolysis
All the files being transferred were subject The investigation looked at whether S&G breakdown products. 12 to pre-LASPO CFAs and all claimants were had deliberately falsified or manipulated its told of the transfer via a letter which did not financial records and accounts for the The objective of the cabin/cockpit air study require their consent. It was held that the period between December 2014 and was to determine whether there are cabin transfer without the consent of the September 2015. air contaminants that present safety and/or claimants amounted to the termination of potential long/short-term health risks. In the retainer by Firm A. As such, it was not This news initially caused a 30% rise in value total, 69 measurement flights were possible to assign a terminated agreement to A$0.145 on 24 March 2017, but this has performed on 8 types of aeroplane/engine and thus neither firm were entitled to be since dwindled back to A$0.130. 10 configurations. This included 61 flights on paid under the pre-LASPO CFA. aeroplanes equipped with engine bleed Elsewhere, the class action lawsuit issued air systems (the main study) and 8 flights on It is clear then, according to the authorities, against S&G by Maurice Blackburn the Boeing 787, which does not have a that a CFA is capable of being assigned, Lawyers, on behalf of S&G shareholders, is bleed air system. For all flights, however, whether or not a CFA has been still ongoing. measurement equipment was installed in validly assigned will very much depend on the cockpit and cabin. At defined flight the facts of the particular case. phases (taxi-out, take off and climb, Cabin Air Quality descent and landing, complete flight), samples were taken and then analysed Whilst there does appear to be some Studies Published confusion caused by the conflicting using high sensitivity techniques. The results guidance in Jones and Jenkins regarding show that the air quality is similar or better In recent years, there have been numerous the necessity of a relationship of ‘personal than what is observed in normal indoor reports of ‘fume events’ on aircraft, while trust and confidence’ – it could be argued environments (offices, schools, flight crews have reported a range of acute that this is a moot point in relation to Asons kindergartens or dwellings). 13 No and chronic health effects, some of which as all of the Asons fee earners have been occupational exposure limits and have been attributed to cabin air TUPE transferred to Coops Law and so it is guidelines were exceeded. Special contamination. There are a number of likely that the same fee earner will be attention was paid to organophosphates, in potential sources of cabin air dealing with each piece of litigation. particular, the isomers (forms) of tricresyl contamination, including: phosphate (TCP), which is suspected to be
However, we are unable to come to any a cause of symptoms reported by flight Exhaust gases; definitive conclusions at this early stage, it crew. OPs were found in all samples but Volatile organic compounds from is currently unknown whether Asons did reported concentrations were well below cleaning products; indeed assign their existing CFAs or if they exposure limits. entered into wholly new post-LASPO CFAs. Ozone; We will continue to update on this topic as De-icing fluids; According to the findings from this study, events develop over the coming weeks. Particulate organic matter; TCP concentrations in the cabin, if Organophosphates (OPs) from introduced as a continuous bleed air For more details regarding the case law lubricants; contamination, ought to be constant. mentioned here then please see edition Hydraulic fluids; and However, this is not the case for the 154 of BC Disease News here. Engine oils. individual aircraft included in the study. OPs and other contaminants were generally at OPs are part of the same molecular family highest levels during taxi-out and lower ASIC Investigation into implicated in causing ill-health in sheep dip levels during take-off/climb and users and have been suggested as a descent/landing. The researchers attribute S&G Dropped potential cause of the reported health the difference in concentrations to the rate effects. of exchange of the cabin air. It is We have reported previously in BC Disease remarkable that TCP was detected in the News on the ongoing investigation On 17 March 2015, it was announced that non-bleed air driven B787, especially as we conducted by the Australian financial the European Aviation Safety Agency (EASA) have, in previous versions of BCDN, PAGE | 7
featured the comments of Boeing claiming TCP was present in the analysed oils. to have bettered any risk of bleed air However, no ortho-isomers could be exposure. In the B787, TCP also displays detected. The study concluded that changes in concentration with flight phase. neuroactive products were present, but The hypothesis that TCP in the cabin air of that their concentration in the presence of aircraft derives from the bleed air an intact lung barrier was too low to be a contamination must, therefore, be major concern for neuronal function. questioned, because this study did not However, it could not be ruled out that detect permanent TCP/engine oil entry higher concentrations might affect through bleed air, and found that there neuronal activity. Furthermore, exposure for were sources other than bleed air up to 48 hours resulted in decreased containing TCP in aircraft cabins. However, neuronal activity and it is therefore possible for three flights, each with a bleed air that effects of pyrolysis products develop supply, the concentration of TCP did not following prolonged exposure alone. The follow the same pattern, and there were investigators also considered the variations increased concentrations of TCP during in sensitivity of humans to certain particular flight phases. The increased TCP compounds, and were unable to rule out levels were unrecognised by the occupants that some symptoms could not be of the aircraft. Typical oil odour sensations explained by actual exposure levels. It is in other cases, however, had no concrete also suggested that differences in coping analytical outcome. strategies are well-known factors that enhance stress reactions, which, in their Overall, the results of this campaign are own right, can lead to acute health consistent with findings obtained through complaints and long-term health effects. other published studies on cabin air quality. In summary, these studies do not provide The observed frequency, pattern and evidence that OPs in cabin air are concentration levels were similar to findings responsible for the symptoms reported by of other indoor environments. The study flight crew. suggests that chronic exposure to ‘everyday’ levels of OPs in the cabin would We have previously discussed the issue of not be expected to cause health problems. contaminated cabin air on planes and A number of ideas have been suggested ‘aerotoxicity syndrome’ in editions 64, 65, for future studies investigating cabin air 86, 95,145 and 170 of BC Disease News. contamination events, including human exposure studies, such as biomonitoring of blood/urine and testing for neurotoxic effects.
The second study published by EASA hoped to characterise the toxic effects of chemical compounds that are released into the cabin or cockpits of transport aircraft. 14.Experimental work was performed using two generally used brands of oil. Oil and vapours were characterised when the oil was heated in combination with purified air and under pyrolysis (decomposition) conditions. The flight stages, from ground level to top of climb and cruising altitude were simulated. Also, toxic effects were studied, using the vapour from pyrolysis of the oil samples and an in vitro model of the human lung with an air- liquid interface.
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Feature Mesothelioma Series: Part 7: Factories Act 1961/1937 – s.63
INTRODUCTION
Last week we provided an overview of the development of asbestos legislation and noted that in order to determine the potential application of any statutory duty you must ask three seemingly obvious but fundamental questions which are often overlooked:
1. Does it apply to the period in which exposure arose? 2. Does it apply to the place in which exposure arose? 3. Does it apply to the party against whom the breach of duty is alleged?
A commonly pleaded statutory provision within asbestos claims is section 63(1) of the Factories Act 1961 (and its antecedent s.47 of the 1937 Act) and the ‘removal of dust or fumes’ and we answered these questions in relation to that provision in last week’s feature where we noted that:
1. The duty was in force between 1st July 1938 (s.47 of the 1937 Act) and October 1st 1989 (when s.63 of the 1961 Act was repealed); 2. The duty applies to ‘factories and workshops’- not places outside of these; 3. It is a duty which applies only to the occupier of a factory - not to an employer of someone who is exposed within someone else’s factory.
Assuming then that s.63(1) applies, it is now accepted that it has 2 distinct limbs, each of which states a condition which must be met before the duty arises to take all practicable measures. s. 63 (1) states:
‘(1) In every factory in which, in connection with any process carried on, there is given off any dust or fume or other impurity of such a character and to such an extent as to be likely to be injurious or offensive to the persons employed, or any substantial quantity of dust of any kind, all practicable measures shall be taken to protect the persons employed against inhalation of the dust or fume…’
The first condition is when:
‘…there is given off any dust or fume or other impurity of such a character and to such an extent as to be likely to be injurious or offensive to the persons employed…’
The second condition is when:
‘…there is given off… any substantial quantity of dust of any kind…’
Before we consider what is required in order to establish liability under each of these limbs it is necessary to properly interpret the meaning of the entire sub-section and to do so we need to deconstruct it into 5 distinct parts as follows:
‘In every factory in which, (1) in connection with any process carried on, (2) there is given off any dust or fume or other impurity of such a character and to such an extent as to be likely to be injurious or offensive (3) to the persons employed, or (4) any substantial quantity of dust of any kind, (5) all practicable measures shall be taken to protect the persons employed against inhalation of the dust or fume…’.
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A number of elements are required to establish liability under the sub-section: -
1. Was the dust given off ‘in connection with any process? 2. Was the person exposed a ‘persons employed’? Does the person have to be a person involved in the specific process generating the asbestos dust or simply any employee within the factory? 3. Was the dust of such a character as ‘likely to be injurious’? 4. Was the dust ‘substantial’? a. Is this to be determined at the point that the dust was generated or at the point of inhalation? b. Do you just consider the injurious asbestos dust or all dust involved in exposure? 5. What is meant by ‘practicable measures’? Can the occupier adopt practicable measures against a risk of harm it cannot foresee?
We will consider each of these elements in turn in the coming weeks’ features but firstly let us address element 1 and 2 as these are applicable to each of the two limbs contained within s.63.
EXPOSURE IN CONNECTION WITH ANY PROCESS?
‘In every factory in which, in connection with any process carried on…’
To be a ‘process’ for the purposes of s.63(1)/s.47(1) does that process have to be integral to the principle manufacturing process of the factory?
In Brophy v J C Bradfield & Co Ltd [1955] 1 W.L.R. 1148 it was held that s.47(1) did not apply in the case of a factory worker who was killed by exposure to fumes from a heating boiler as heating the factory was not considered to be a process carried on in a factory which manufactured tents and canvass goods.
In Nurse v Morganite Crucibles Ltd [1989] AC 692, the House of Lords considered the meaning of process albeit within the Asbestos Regulations 1969 and determined it had a wide construction relating to ‘any operation….being an activity of more than a minimal duration’.
A restrictive construction, similar to that in Brophy was applied in Banks v Woodhall Duckham [1996] C.L.Y. 2990 where exposure to asbestos which arose from lagging was held not to be a process carried on in a factory - this being the manufacturing of steel.
In McDonald v National Grid Transmission Plc [2014] UKSC 53, the claimant had been employed as a lorry driver by the defendant employer and alleged his mesothelioma was caused by exposure to asbestos dust when attending Battersea Power Station – owned and controlled by another - to collect fuel ash about twice a month. A claim was pursued against the occupier of the power station under the Factories Act 1947 and the Asbestos Industry Regulations 1931. He claimed that on these occasions he spent about an hour in the power station dealing with paperwork and would be regularly exposed to asbestos from workers mixing, applying and removing asbestos lagging within 10-15ft of him. This exposure occurred whilst he was in areas he was not required to visit as part of his employment and as such he was described by the defendant as a ‘causal visitor’ rather than a ‘persons employed’. The defendant, relying on Banks, also argued that lagging operations were not part of the process carried on at the power station, that process was, it argued, the generation of electricity.
Lord Kerr, sitting in the Supreme Court, disagreed with such construction - he defined a process as being any ‘normal feature of the factory’s activity’. So in the case of Brophy the heating system ‘was not required, in the sense of making a direct contribution to the manufacture of tents and canvas goods. But a heating system was doubtless required in order that the manufacture of those goods could take place’.
As such he concluded at para 64:
‘The words in section 47(1), “a process” carried on in any factory should be given their plain and natural meaning. To suggest that they import some intimate connection with the manufacture of a product introduces an unnecessary and unwarranted gloss on the subsection. If it is a process that is a normal feature of the factory’s activity, it is a process for the purposes of the legislation. I would therefore hold that the lagging work which Mr McDonald encountered in the power station constituted a process for the purposes of section 47 and that the first condition necessary to show breach of subsection (1) of that section has been met’.
Lady Hale, Lord Reed and Lord Neuberger agreed with this expansive definition.
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PERSONS EMPLOYED
‘…there is given off any dust or fume or other impurity of such a character and to such an extent as to be likely to be injurious or offensive to the persons employed, or any substantial quantity of dust of any kind…’
Does the person have to be a person involved in the specific process generating the asbestos dust or simply any employee within the factory?
McDonald considered 2 issues on this point:
(a) does s. 47(1) apply to a person who is not employed in the actual process giving rise to the dust - or expressed another way does it only apply to the persons generating the dust and not other employees who may subsequently be exposed? (b) does it apply to a person who is not employed by the factory occupier but whose employment is still connected with the processes carried on within the factory? Is a person not employed by the occupier but only a ‘casual visitor’ classed as a ‘person employed’?
The First Issue:
As with the meaning of ‘process’ there have been both restrictive and expansive interpretations of the words ‘persons employed’.
The restrictive construction is to say that s.47 (1) / 63(1) only protects those employees directly involved in the dust generating process. It does not serve to protect other employees working generally within the factory who may be exposed. This was the approach followed in Morrison v CEGB (1986) an unreported decision of Rose J and also Banks v Woodhall (1995).
This restricted meaning was unanimously rejected in McDonald. As was said by Lord Kerr (see paras 69 and 70) ‘section 47 should extend to those employed persons liable to be affected by the dust or fume, not merely to those employees who were responsible for producing those substances’.
The Second Issue:
The court unanimously agreed that ‘persons employed’ included not only employees of the factory occupier but also any other employer who might be called to do work in the factory, an example being a painter employed by an independent contractor painting within the factory. The test is whether a person is employed in the factory, not whether he is employed by the occupier.
However what was the position of Mr McDonald who had not been required to go to that part of the factory where he had been exposed and was described as a ‘casual visitor’?
Whilst a ‘person employed’ within the Factories Act has previously been held to include a painter employed by an independent contractor, in other authorities it was held not to extend to a fireman who entered a factory to put out a fire, or to a police constable entering a factory in pursuit of a felon.
So did it apply to Mr McDonald? Lord Reed set out the opposing arguments as follows:
‘…It could be argued that Mr McDonald was employed for the purposes of the power station, either on the basis that one of those purposes was the sale of ash, and he was employed collecting ash which had been sold, or on the basis that the ash was a by-product which the power station had to dispose of, and he was employed removing it. The contrary view appears to me however to be more persuasive. Mr McDonald was not in reality working for the purposes of the power station. He was working solely for the purposes of his employer, the Building Research Establishment. It was the purchaser of the ash which was a by-product of the power station, and it employed Mr McDonald to collect the ash in his lorry. A customer of a factory can hardly be regarded as working for the purposes of the factory, even if he goes there in person to collect the article purchased; and a person whom he employs to collect the article from the factory can hardly be in a different position. Although the sale of such articles would no doubt be one of the purposes of the factory, and the sales staff would therefore fall within the scope of the legislation, the collection of the articles by or on behalf of purchasers is not the same position’.
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Lord Kerr and Lady Hale found that s.47(1) still applied where an employee went to part of the premises where he had no authority to go. Kerr said at paragraph 72:
‘…The suggestion that Mr McDonald was acting within the scope of his employment while in the areas where pulverised fuel ash was collected and stepped outside that scope as soon as he crossed the threshold of another room in the factory is fanciful. I consider that the second condition to establish breach of section 47(1) has also been met’.
Lord Clarke made a similar finding in respect of the same issue raised in the context of the 1931 Regulations at paragraph 127 where he said:
‘…It appears to me that a lorry driver who goes to a factory to collect its produce is in a real sense working for the purposes of the factory, albeit as the employee of someone else. The collection of goods is essential to the operations of the factory. The driver is much closer to the painter or the window cleaner than the fireman or the policeman…I would hold that, in the relevant sense and at the material time, Mr McDonald was employed in the factory’.
CONCLUSION
Section 63 (1) of the FA 1961 (and its antecedent s. 47(1) of the FA 1937), consists of 5 distinct parts, all of which must be satisfied in order to establish liability.
Firstly, the dust must be given off in connection with any ‘process’ carried on in the factory. That process does not have to be integral to the principle manufacturing process of the factory.
Further, ‘process’ extends to those employed persons liable to be affected by the dust or fume, not merely to those employees who were responsible for generating the dust and fume.
To be a ‘persons employed’ to engage the subsection, the person exposed does not have to be a person involved in the specific process generating the dust and fume. A claimant will satisfy this requirement as long as their employment is essential to the operations of the factory.
Next week we go on to consider the two limbed test within s.63(1)/s.47(1) - is the dust or fume ‘likely to be injurious’ and has there been a ‘substantial quantity’ of dust?
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ReferencesLord Kerr and Lady Hale found that s.47(1) be integral to the principle manufacturing still applied where an employee went to process of the factory. 1 part ‘Legal of Update: the premises The Scottish where Government he had no reduces the discount rate to -0.75%’ (Weightmans LLP March 2017) accessed 30 March 2017. authority to go. Kerr said at paragraph 72: Further, ‘process’ extends to those 2 Ministry of Justice and Scottish Parliament, Theemployed Personal Injury persons Discount liable Rate:to be Howaffected it should by be set in future (Consultation‘…The Paper, suggestion 2017) < thahttps://consult.justice.gov.uk/digitalt the dust or fume,-communications/personal not merely to those -injury-discount- rate/supporting_documents/discountrateconsultationpaper.pdfMr McDonald was employees who> accessed were responsibl 30 Marche 2017. for acting within the generating the dust and fume. 3 The Damagesscope (Personal of Injury) his (Scotland) Order 2017, SI 2017/96. employment while in To be a ‘persons employed’ to engage the 4 Max Walters,the ‘SRA areas Moves In where To Shut Down Asonssubsection, As Firm Loses the £2.1m’ person ( The exposed Law Society does Ga notzette 30 March 2017)< https://www.lawgazette.co.uk/law/srapulverised fuel ash -moves-in-haveto-shut to-down be a -personasons- asinvolved-firm-loses in the-21m/5060463.article specific > accessed 30 March 2017. was collected and process generating the dust and fume. A 5 Daniel Holland,stepped ‘Asons outside Solicitors that Shut Down By claimantSolicitors Regulationwill satisfy this Authority’ requirement (Bolton as News long 30 March 2017)< http://www.theboltonnews.co.uk/news/15192991.Asons_Solicitors_shut_down_by_regulation_authority/?ref=nabscope as soon as he as their employment is essential to the > accessed 30 March 2017. crossed the threshold operations of the factory. of another room in the Next week we go on to consider the two 6 Daniel Holland,factory The is Bolton fanciful. News I (30 March 2017)
8Lord Chitty Clarke on Contracts, made (31st a similar Edition finding para 19 in-054 to 19-055). respect of the same issue raised in the 9context Thuy Ong, of ‘Slater the and 1931 Gordon: Regulations ASIC Clears at Embattled Law Firm Of Falsifying Records, Will Not Enforce Penalties’ (ABC 23 March 2017)< http://www.abc.net.au/news/2017paragraph 127 where he said: -03-24/asic-clears-slater-and-gordon-will-not-enforce-penalties/8382996> accessed 30 March 2017.
10 Anna Zhang,‘…It appears ‘Slater and to meGordon that Cleared a lorry of Accounting Violations in Australia’ (Law.com 27 March 2017)
Section 63 (1) of the FA 1961 (and its antecedent s. 47(1) of the FA 1937), consists of 5 distinct parts, all of which must be satisfied in order to establish liability.
Firstly, the dust must be given off in connection with any ‘process’ carried on in the factory. That process does not have to
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Disclaimer
This newsletter does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to provide an update on issues that may be of interest to those handling occupational disease claims. Specialist legal advice should always be sought in any particular case.
© BC Legal 2016.
BC Legal is a trading name of BC Legal Limited which is registered in England and Wales under company number 08963320. We are authorised and regulated by the Solicitors Regulation Authority. The registered office is 1 Nelson Mews, Southend-on-Sea, SS1 1AL. The partners are Boris Cetnik and Charlotte Owen. More details on the firm can be found at www.bc- legal.co.uk
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Directors: B. Cetnik, C. Owen Registered Office: 1 Nelson Mews, Southend-On-Sea, SS1 1AL PAGE | 15 BC Legal is a trading name of BC Legal Limited which is registered in England and Wales under company number 08963320 We are Authorised and Regulated by the Solicitors Regulations Authority (SRA No 617698)