DRAFT
ABI SUBMISSION TO THE JUSTICE COMMITTEE ON THE DAMAGES
(ASBESTOS-RELATED CONDITIONS) (SCOTLAND) BILL
The Association of British Insurers (ABI) represents the collective interests
of the UK’s insurance industry. The ABI speaks on issues of common
interest; helps to inform and participate in debates on public policy issues;
and also acts as an advocate for high standards of customer service in the
insurance industry.
1.
EXECUTIVE SUMMARY
1.1
Symptomatic asbestos-related illnesses cause a huge amount of discomfort
and anxiety for the sufferers and their families. Insurers remain committed to
paying compensation for these conditions quickly and efficiently.
1.2
In the vast majority of cases, pleural plaques are symptomless. While they
signify that a person has been exposed to asbestos, they do not themselves
increase the likelihood of developing any other asbestos-related condition,
including mesothelioma. Yet despite the medical evidence, some people with
pleural plaques are concerned about what the condition means for their longterm health.
1.3
The Scottish Government has committed to introducing legislation to make
symptomless pleural plaques and other symptomless asbestos-related
conditions compensatable, and has introduced a draft Bill to that effect.
1.4
The ABI is fundamentally opposed to paying compensation where no injury or
harm has been sustained and, therefore, to the Scottish Government’s
decision to introduce legislation to make symptomless pleural plaques
compensatable. We believe that such legislation:
 does nothing to ease the anxiety of people with pleural plaques – rather
than legislate, the Scottish Government should provide reassurance by
improving understand among the wider public as well as those
diagnosed with the condition. Insurers are happy to play a role in
helping the Scottish Government deliver this, alongside other
stakeholders such as health providers and trade unions.
 will lead to a renewed surge in the practice of scan vans to identify
cases, causing unnecessary distress to people who will go on to
believe mistakenly that they will develop a terminal cancer. Scans also
carry their own risks to health.
 will undermine confidence in the stability of Scotland’s legal framework
and impose unjustified costs on businesses, consumers and taxpayers
– the legislation will fundamentally change the law of delict, permitting
those who have suffered neither injury nor harm to claim
compensation. This will impose significant costs on defendants,
including local authorities, businesses with gaps in their insurance
cover, and insurers which will subsequently be passed onto consumers
and taxpayers.
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DRAFT


will make Scotland a less attractive place to do business – businesses
require assurance that the Government is committed to a stable legal
environment; investment and wealth-creating activity will be
discouraged if businesses perceive undue readiness on the part of
Scottish Government and legislative authorities to change the law.
Scottish consumers will suffer through reduced choice compared to
their counterparts elsewhere in the UK
contravenes Article 1 and Article 6 of the European Convention on
Human Rights
1.5
We urge the Justice Committee to highlight to Parliament the issues
associated with this Bill.
2.
INTRODUCTION
2.1
On 17 October 2007 the House of Lords, which included two Scottish Law
Lords: Rodgers and Hope, unanimously concluded that pleural plaques do not
give rise to a cause of action under the law of negligence (delict).
2.2
They reached this conclusion on the basis of medical evidence that showed
that pleural plaques:
 are, except in exceptional cases, symptomless and therefore do not
result in any pain, suffering or loss of amenity
 neither lead to, nor increase susceptibility to, any other asbestosrelated condition.
2.3
The Scottish Government is committed to introducing legislation to make
asymptomatic asbestos-related conditions compensatable.
The ABI is
fundamentally opposed to that position.
2.4
In February, the Scottish Government consulted on its partial regulatory
impact assessment of the proposed Bill. We welcomed this consultation as
opportunity for the Scottish Government to consider afresh the advantages
and disadvantages of legislative action.
2.5
More than three-quarters of the responses to that consultation opposed the
Bill. We are concerned, however, that the issues raised in those responses
have not been properly considered.
2.6
Firstly, we believe that compensating someone with pleural plaques will only
perpetuate any anxiety they might feel about the diagnosis; education, not
legislation, is the best way to reassure a person that pleural plaques does not
mean that they are going to develop mesothelioma or any other symptomatic
asbestos-related condition.
2.7
Secondly, the Bill will undermine business confidence in the extent to which
they can rely on a stable legal framework in Scotland, and will affect the
competitiveness of Scottish businesses compared to their counterparts in the
rest of the UK.
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2.8
Thirdly, the Bill contains retrospective provisions which contravene Articles 1
and 6 of the European Convention on Human rights, which precludes any
interference by the legislature with the administration of justice designed to
influence the determination of the dispute.
3.
HELPING PEOPLE WITH PLEURAL PLAQUES
3.1
Pleural plaques are nearly always symptomless1, and they neither lead to, nor
increase susceptibility to, any other condition.
3.2
Despite the medical evidence that pleural plaques are benign (see Annex A),
there is a great deal of confusion among people with the condition and their
families about what a diagnosis of plaques really means for their health.
3.3
Some people are concerned that having pleural plaques are the first step
towards developing a more serious asbestos-related condition, such as
mesothelioma. This is not the case, as the medical evidence shows. It is not
the plaques themselves that increase a person’s risk, but rather the exposure
to asbestos.
3.4
The best way to allay the concerns of people with pleural plaques is to
improve their understanding of the condition. This can really only be achieved
through ensuring that those people and organisations who communicate with
sufferers – the Government, health providers, trade unions - distil the same
messages, namely that plaques are usually symptomless and do not increase
susceptibility to any other asbestos-related illnesses, including mesothelioma.
However, legislation to make plaques compensatable sends a very different
message – the fact that a condition is worthy of compensation suggests that it
is more serious than it really is.
3.5
This was a point made by Anthony Seaton, Emeritus Professor of
Environmental and Occupational Medicine at the University of Aberdeen:
“Confusion arises because exposure to asbestos is also associated
with the risk of serious fatal diseases, most notably mesothelioma, and
most people with this disease also have pleural plaques. It is
understandable that individuals with plaques can be worried about their
prognosis if they are given misinformation on their significance. The
change in case law that led to individuals with pleural plaques receiving
money for a non-disease caused problems in their management.
While giving appropriate reassurance and explaining the risks of other
asbestos-related diseases in relation to the risks of much more likely
diseases, we were obliged to advise them to consult a lawyer – a
mixed message with the obvious consequence of causing anxiety. The
main beneficiaries have been lawyers and expert witnesses such as
me. I believe we have better things to do, to prevent real diseases.
1
The presence of pleural plaques does not normally occasion any symptoms. Very occasionally, in fewer than 1% of cases,
the patient may be aware of an uncomfortable grating sensation on respiration (Lord Philips CJ, and Lord Justice Longmore,
Court of Appeal judgment in Rothwell, January 2006)
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DRAFT
“There is a risk that the desirability of raising awareness of the nature
of pleural plaques and allaying unnecessary concerns could be
undermined by the provision of compensation, as this could send
mixed messages about the nature of the condition and increase
concerns.2”
3.6
Rather than legislating the Scottish Government should be working with the
NHS, trade unions and sufferer support groups to ensure widespread
awareness of current medical knowledge. Insurers would be happy to play a
role in delivering this.
4.
UNDERMINING BUSINESS CONFIDENCE
A stable legal framework?
4.1
The Scottish Government has said that it is committed to creating a
competitive environment within which business can flourish; to attracting
inward investment; and to building a culture of entrepreneurship. It has also
spoken of the potential to develop Scotland as a forum for international
dispute resolution. The use of the legislative power of the state to overturn
judicial decisions is inconsistent with these stated aims and, in particular, with
their long-term achievement.
4.2
Legal certainty is extremely important to liability insurers. Liability insurance is
inextricably linked to the law of delict. Without liability insurance, it is doubtful
that delict liability as we know it would exist as those who had been wronged
would be unable to receive the appropriate compensation for their harm.
Undermining the fundamental principles of the law of delict starts to challenge
and undermine the whole compensation system. Ultimately, it could result in
those with genuine injuries or harm being unable to obtain satisfactory redress
and / or businesses collapsing under the weight of litigation and compensation
bills.
4.3
Further, businesses require assurance that the Government is committed to a
stable legal environment; investment and wealth-creating activity will be
discouraged if businesses perceive undue readiness on the part of
Government and legislative authorities to change the law. It is the
retrospective nature of the legislation that creates particular unease for the
future.
Unjustified costs
4.4
2
The Scottish Government has significantly underestimated the level of
unjustified costs that the Bill will impose on Scottish businesses, consumers
and taxpayers. Higher costs for insurers will be passed onto employers’
liability policyholders in the form of higher premiums , while higher costs for
local authorities will fall to taxpayers.
Professor Anthony Seaton, ‘Close scrutiny needed on asbestos-related disease’ in The Scotsman, 30 October 2007
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DRAFT
4.5
The Financial Memorandum makes assumptions about the potential number
of future claims based on the number of sisted cases. It suggests there will
be approximately 200 claims per year. However, this underestimates the
extent of the problem because:



it does not take into account the sharp fall in the number of claims
following the Court of Appeal judgment in 2006 (6,000 claims in 2005,
fell to 2,250 in 20063
Scotland has approximately 30% of total UK-asbestos liabilities. We
estimate that had the test cases not been brought, the annual number
of claims in Scotland would be closer to 1,800 than the 200 the
Financial Memorandum suggests
it does not deal adequately with the potential for forum shopping.
While the Policy Memorandum dismisses concerns about forum
shopping, it is vague about how it will do this. This creates further
uncertainty about the potential number of claims.
4.6
A number of studies support the notion that the potential for underestimation
of future claims is considerable.
Some of these are referenced in
Annex B.
4.7
The underestimation of the number of potential claims prohibits accurate
forecasting of the cost of the legislation. The Financial Memorandum
suggests that the annual cost to defendants of compensating plaques would
between £5.5m and £6.5m, however:


4.8
the annual cost to the UK is estimated to be between £252m and £2bn4
Scotland has approximately 30% of the UK’s asbestos liabilities; we
therefore estimate that a more realistic range on the annual cost of this
legislation to defenders would be £76m to £607m.
A high proportion of these costs would fall to insurers, which would be passed
on to employers’ liability policyholders in the form of higher premiums; some
insurers may even choose to exit the Scottish liability market. This could
undermine the competitiveness of Scottish businesses compared to their
counterparts elsewhere in the UK where there might be cheaper and wider
availability of cover.
[can we calculate as % of Scottish EL premium income?]
4.9
Further, many companies with gaps in their insurance cover as well as local
authorities will find themselves liable for a portion of any claims. Where the
local authority incurs costs, ultimately it will be the taxpayer who foots the bill.
[can we estimate proportion of claims that will fall to LAs?]
4.10
The Scottish Government also has a significant degree of liability for exposing
former employees to asbestos via the Ministry of Defence and the Department
3
Institute of Actuaries, presented at the GIRO conference, October 2007 (approximate figures)
ABI estimates, based on data contained in the Ministry of Justice’s consultation paper, Pleural Plaques, 9 July 2008
4
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DRAFT
for Business, Enterprise and Regulatory Reform, whose powers are devolved
to the Scottish Government who holds the residual historic liabilities for the
shipyards, docks and the steel industry. The burden of this would fall on the
Scottish taxpayer.
[can we estimate proportion of Scottish Govt liabities?]
4.11
The impact of the legislation on run-off insurance companies and their
claimants should also be borne in mind. Run-off insurance companies no
longer underwrite business in a particular line and, therefore, are effectively
closed funds with finite resources. This means that increased levels of
payments made to those with symptomless conditions will inevitably reduce
the amounts available to pay those who develop more serious conditions,
including mesothelioma.
[do we know approximately what proportion of claimants this might effect?]
5.
UNINTENDED CONSEQUENCES
Changing the law of delict
5.1
The Scottish Government suggests that the Damages will ensure legal
consistency with the situation pre-Johnston. This is incorrect.
5.2
The law of delict requires that for damage to be compensatable, it must be
more than de minimis, which is to say that it is required to reach a threshold of
seriousness if it is to justify the intervention of the law. Compensation has
therefore only ever been granted where it can be shown that a claimant has
sustained damage that is more than minimal. Medical evidence now exists
which shows that pleural plaques have no effect on health at all;
consequently, the ‘more than minimal’ criterion is not met.
5.3
In their judgment, the Lords applied the existing law of delict to the latest
medical evidence about the effect of plaques on a person’s health. This – not
the proposed Bill – demonstrates legal consistency. Making benign pleural
plaques compensatable represents a fundamental change to the law.
Wider implications
5.4
Interference with the fundamental principles on which the Law Lords’ decision
was based will be used as a precedent to argue for compensation in other
situations (see Annex C), with significant cost implications for businesses,
consumers and taxpayers. For example, it is likely to lead to calls for
compensation in other circumstances where no actionable damage has yet
occurred, such as simply for exposure to asbestos, and the worry from such
exposure, regardless of whether this had resulted in any symptoms or injury.
Any such calls would be hard to resist on grounds of fairness once the Bill is
passed.
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DRAFT
5.5
It will also raise the possibility of compensation claims being made much
more widely for the risk of an illness occurring, or for worry that something
might happen, for example, in relation to the effects of passive smoking in the
workplace or exposure to the sun in the building industry or other jobs
involving outdoor work.
5.6
Anxiety is not compensatable under law (see Annex D). If developments in
the law of this nature occurred, this could considerably increase the level of
litigation and the possibility of weak or spurious claims and could have
damaging effects on business and the economy. Even if such claims were
not to succeed, the cost of resisting them would be significant.
5.7
The cost of these new claims cannot be quantified as we do not know how
many or which conditions would become actionable.
The proposed legislation would contravene defendants’ human rights
5.8
The provisions of the draft Bill have retrospective effect and apply to cases
which have not been settled, or determined by a court, before the date the
legislation comes into force. This would include all those whose cases had
been sisted pending the House of Lords’ decision, or the Court of Appeal
decision, or had been withdrawn/discontinued, or who had not commenced
proceedings because of the Court of Appeal or House of Lords’ decision.
5.9
Retrospective provisions of this nature raise issues in relation to the European
Convention on Human Rights. Article 6 enshrines the principle of the rule of
law and the notion of fair trial, both of which are precluded by any interference
by the legislature with the administration of justice designed to influence the
judicial determination of the dispute. This interference with settled
arrangements breaches the Convention. [need to insert something re Article
1]
6.
CONCLUSION
6.1
The Damages Bill fails to address the real issues for people with pleural
plaques and is based upon a belief that paying money to someone in some
deals with this condition. It does not respond to the anxieties people have
about pleural plaques; it risks damage to the Scottish economy, imposing
significant costs on the Scottish taxpayer, consumer and taxpayer; and
contravenes the European Convention on Human Rights.
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DRAFT
ANNEX A
THE MEDICAL EVIDENCE
A.1 The medical evidence on pleural plaques is uncontested by medical experts,
and undisputed by claimants and their lawyers. In Johnston, Dr Robin Rudd, a
consultant physician in medical oncology and respiratory medicine, acting for
the appellants, and Dr John Moore-Gillon, a consultant physician in respiratory
medicine and vice-president of the British Lung Foundation, acting for the
respondents, prepared a joint report5 which stated inter alia “we find that we are
in general agreement and we do not consider that there are any material
differences between our medical views regarding pleural plaques”. The
substance of their evidence was as follows:





The pathogenesis of pleural plaques, while undoubtedly involving a
response to asbestos fibres, is not entirely clear but the presence of
plaques does not necessarily imply that any damage has been caused
to the lungs
The plaques (bland fibrous tissue usually situated on the parietal
pleura) do not, save in a very rare condition where they are extensive
and confluent, impair the ability of the visceral and parietal pleura to
slide easily over each other. In almost 25 years of practising in the
field of respiratory medicine, having seen many hundreds of asbestosexposed individuals, Dr Moore-Gillon had seen ‘only a handful’ of
cases where pleural plaques were associated with any symptoms.
This is because they have a covering of mesothelial cells providing a
low-friction surface which, together with a lubricant of pleural fluid,
permits this easy movement. Thus the ease and freedom of the lungs’
ability to expand and contract is unaffected.
Though individual plaques may grow they do no (and cannot) multiply
or progress to one of the other recognised asbestos-related conditions.
They amount to a ‘biological cul-de-sac’. The plaques themselves are
therefore wholly benign and asymptomatic.
The association of plaques with physical symptoms such as
breathlessness is almost invariably explained by the concurrent
presence of asbestosis or other co-morbidity unrelated to asbestos
Pleural plaques are a ‘marker’ of exposure to asbestos fibres because
it is accepted from pathological and epidemiological studies that they
are associated with exposure. For that reason only, they are also
associated with a risk of serious asbestos-related disease occurring in
the future. The magnitude of that risk is assessed, however, by
reference to the age and occupational history of the patient and not by
the presence of plaques themselves.
A.2 In fact, the lifetime risk of a person who has had occupational exposure to
asbestos developing mesothelioma is low – between three and five percent. To
put this in context, the lifetime risk of a male developing prostrate or lung cancer
5
Drs Rudd & Moore-Gillon in Rothwell, 13 July 2004
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DRAFT
is seven percent and eight percent respectively; the lifetime risk of a female
developing breast cancer is 11%6.
6
UK Statistics Authority
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ANNEX B
THE PREVALENCE OF PLAQUES
B.1
In his report of 10 November 2004, Dr Moore-Gillon suggested that there are
now about 1,500 new cases of mesothelioma diagnosed in the UK each year.
There must accordingly be far more than 1,500 cases of pleural plaques
arising each year. However, because they are asymptomatic many, and
almost certainly most, are not at present diagnosed. When they are
diagnosed it is usually as an incidental finding on a chest radiograph carried
out for other reasons. For every person that develops mesothelioma in any
given period there will be 20-50 people developing plaques i.e. 30,000 to
75,000 per year7. Given that approximately 30% of the asbestos liabilities are
Scotland, between 9,000 and 22,000 of these are likely to be in Scotland.
B.2
Professor Mark Britton, a consultant physician and Chairman of the British
Lung Foundation, reported that a pathologist had estimated that 10% of the
cadavers he saw had pleural plaques8.
B.3
Professor Tony Newman Taylor (one of the most pre-eminent chest
physicians in the UK and previously chair of the Industrial Injuries Advisory
Council) states that about one-third to one-half of those occupationally
exposed to asbestos will have calcified pleural plaques thirty years after first
exposure9
B.4
A study by SJ Chapman concludes “Pleural plaques typically develop 20 to 30
years after exposure, and their incidence increases with longer duration of
exposure. They are found in as many as 50% of asbestos-exposed workers,
but may also occur after low-dose exposures. The total surface area of pleural
plaques measured via CT does not appear to be related to cumulative
asbestos exposure”10.
B.5
A study of autopsy results for males over 70 years old near Glasgow showed
a 51.2% incidence of pleural plaques. Note that this did not specifically look
at those occupationally exposed to asbestos, however a relatively high
proportion of workers in Glasgow have been exposed to asbestos due in
particular to the shipyards11.
B.6
A study by Chailleux & Letourneux cites a 25% incidence of benign pleural
lesions in population intermittently exposed to asbestos12.
7
Dr John Moore-Gillon, 10 November 2004
Quoted at a briefing in Westminster on 26 March 2008
9
3 Dec 2007 House of Commons debate, Michael Clapham (Lab): reading an email from Professor Tony Newman Taylor:
"You may be interested to know that about a third to one half of those occupationally exposed to asbestos will have calcified
pleural plaques thirty years after first exposure. After twenty years, 5 to 15 per cent. will have uncalcified pleural plaques".
10
Chapman, SJ et al, "Benign Asbestos Pleural Disease", Curr Opin Pulm Med 2003:9(4), 266-271
11
Cugell, DW and DW Kamp, "Asbestos and the Pleura: A Review", Chest 2004:125, 1103-1117
12
Chailleux & Letourneux (Rev Mal Resp 1999)
8
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ANNEX C
ACTIONABLE DAMAGE IS MORE THAN DE MINIMIS
C.1
The law of delict requires that for damage to be compensatable, it must be
more than de minimis, which is to say that it is required to reach a threshold of
seriousness if it is to justify the intervention of the law:
“A claim in tort based on negligence is incomplete without proof of
damage. Damage in this sense is an abstract concept of being worse off,
physically or economically, so tha compensation is an appropriate remedy.
It does not mean simply a physical change, which is consistent with
making one better, as in the case of a successful operation, or with being
neutral, having no perceptible effect upon one’s health or capability.
“How much worse off must one be? An action for compensation should
not be set in motion on account of a trivial injury. De minimis non curat
lex”13.
C.2
Pleural plaques do not reach this threshold – as Holland J found in Rothwell:
“I start by rejecting any notion that pleural plaques per se can be found a
cause of action”.
C.3
As the Lord Phillips CJ found when the case was heard at the Court of
Appeal:
“It is common ground in this case, rightly in our view, that the development
of pleural plaques is insufficiently significant, of itself, to constitute damage
upon which a claim in negligence can be founded”.
C.4
As Lord Hope of Craighead found in Johnston:
“While the pleural plaques can be said to amount to an injury or a disease,
neither the injury nor the disease was in itself harmful. This is not a case
where a claim of low value requires the support of other elements to make
it actionable. It is a claim which has no value at all”.
C.5
And as Lord Uist later acknowledged in his judgment in Wright v Stoddard
International plc:
“It is not that pleural plaques cause harm which is de minimis: it is that
they cause no harm at all”.
13
Lord Hoffman in Johnston
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ANNEX D
ANXIETY IS NOT A BASIS FOR A CAUSE OF ACTION
D.1
It is uncontested by medical experts that pleural plaques are harmless. It
follows that pleural plaques do not therefore constitute actionable damage.
D.2
However, the Bill seeks to ensure that people get compensation for anxiety
that may arise about the risk of contracting a serious asbestos-related disease
as a result of a diagnosis of plaques.
D.3
But anxiety is not a basis for a cause of action, even where aggregated. The
law only compensates for anxiety where it is part of another more serious
injury or disease which would be compensatable alone and without the
presence of the said anxiety.
D.4
Johnston affirmed the principle established by the House of Lords in Hicks v
Chief Constable of the South Yorkshire Police that mere anxiety about a risk
of further damage is not itself compensatable:
“There are also cases which suggest that he may be able to recover
damages for anxiety consequent upon an actionable injury.
But
recovering is predicated upon the existence of actionably injury. There is
nothing to suggest that a claimant can rely upon the single action rule to
sue in circumstances in which he does not have a cause of action in the
first place”.
D.5
The Lords in Johnston also rejected any arguments that the condition could
be ‘aggregated’ with the risk of future asbestos disease and/or the anxiety
experienced in relation to such risk. Since neither the plaques alone, nor the
risk of future damage, nor anxiety about the risk are individually actionable, it
follows that they are not collectively actionable either:
“It would be easy to dismiss this argument by applying the simplest of all
mathematical formulae: two or even three zeros, when added together,
equal no more than zero. It is not possible, by adding together two or
more components, none of which in itself is actionable, to arrive at
something which is actionable”14.
D.6
14
Thus introducing legislation to make anxiety about pleural plaques
compensatable will require fundamental changes the law of delict.
Lord Hope of Craighead
12