Proportionate Damages in the Law of Tort
Setting the Limits of Fairchild
Barker v Corus (UK) Ltd
3 May 2006
The House of Lords has today handed down a landmark decision that is important for
insurers and for those practicing in the fields of professional and clinical negligence
and product liability. The decision clarifies the circumstances in which the Fairchild
principle operates to impose liability on defendants and, in a novel and radical move,
holds that those held liable under the Fairchild principle should only be held
severally liable and should only be liable for a proportion of the Claimants’ damage
apportioned according to that Defendant’s contribution to the risk of injury.
Lord Hoffmann gave the leading opinion. He emphasised the narrow nature of the
exception to the normal rules of causation created by Fairchild and that it could not
be used as a lever to open up a broad field of recovery (in professional negligence or
elsewhere) for “loss of a chance” in all cases where the precise cause of the injury loss
or damage could not be determined. He held that Fairchild only applies where “a
defendant has materially increased the risk that the claimant will suffer damage and
may have caused that damage, but cannot be proved to have done so because it is
impossible to show, on a balance of probability, that some other exposure to the same
risk may not have caused it instead.”1 By reference to Wilshire v Essex AHA [1988]
AC 1074 he held that “it is an essential condition for the operation of the exception
that the impossibility of proving that the defendant caused the damage arises out of
the existence of another potential causative agent which operated in the same way.”2
Of major significance for future product liability cases, he continued “I do not think
that the exception applies when the claimant suffers lung cancer which may have been
caused by exposure to asbestos or some other carcinogenic matter but may also have
been caused by smoking and it cannot be proved which is more likely to have been
the causative agent.” This represented a complete change of mind from the opinion
which he had expressed in Fairchild itself: there he had said that relying upon the
presence or absence of a single causative agent was not a principled distinction”. In
Barker he described this as “a minority opinion” and “wrong”.3
Turning to the issue of apportionment of damages, Lord Hoffmann said that the effect
of Fairchild was to treat “the creation of the risk as the damage caused by the
Defendant”. This is likely to prove to be a highly controversial analysis, and
disagreement on this fundamental point was the basic reason why Lord Roger (who
had also been party to the decision in Fairchild) dissented. However, once that
analysis is adopted, it is a short and fair step to hold that the Defendant’s liability
should be measured by reference to his contribution to that risk and should be several.
Pointing out that the justification for joint and several liability in cases where the
Claimant satisfies the “but for” test is that “if you caused harm, there is no reason why
your liability should not be reduced because someone else also caused the same
harm”, Lord Hoffmann continued “But when liability is exceptionally imposed
because you may have caused harm, the same considerations do not apply and fairness
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Paragraph 17
Paragraph 24
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Paragraph 23
2
suggests that if more than one person may have been responsible, liability should be
divided according to the probability that one or other caused the harm.”4
Adopting this approach simplifies the ramifications for contributory negligence and
contribution between tortfeasors. Where there is non-tortious exposure (whether
caused by the Claimant himself or by others) that will be reflected in a reduction of
the Claimant’s recovery but will not cause the Claimant to fail altogether. Equally,
because each Defendant’s liability is attributable to his own contribution to the risk,
there will be no scope for contribution between tortfeasors. The House of Lords did
not define precisely how relative contributions to risk should be assessed: that is to be
worked out by the lower courts in due course.
Lord Scott, Lord Walker and Baroness Hale agreed with Lord Hoffmann’s opinion
though each added a gloss of their own. Lord Roger (who, like Lord Hoffmann, had
been a party to the decision in Fairchild) dissented on the issue of apportionment of
damages.
As Lady Hale observed, all of the opinions deserve close attention. However some
things are now clear:
a)
The House of Lords has closely confined the circumstances in which the
exceptional liability under the Fairchild principle will be imposed upon
defendants;
b)
In doing so, it has resolutely set its face against creating a generalised
doctrine of recovery for loss of a chance in cases where proof of causation
is difficult or impossible;
c)
The introduction of proportionate damages in English law is a radical step
which the House of Lords justified as a fair counterbalance to the
relaxation of the normal rules of causation in Fairchild;
d)
The concept of proportionate damages has ramifications for insurers who
have provided cover for part only of a period of exposure. Previously it
has been argued that the effect of Fairchild would typically be to funnel
100% liability to an insurer who provided cover in respect of any material
period of exposure: see Phillips v Syndicate 992 [2004] Lloyds Rep IR
426. Phillips will have to be revisited after Barker where proportionate
liability is imposed.
Jeremy Stuart-Smith QC of 4 New Square (with Charles Feeny and Jayne La Grua)
represented the Defendants in the House of Lords instructed by Eversheds, Newcastle
and Berrymans Lace Mawer. David Allan QC, Allan Gore QC, and Peter Cowan
represented the Claimants, instructed by John Pickering & Partners, Robinson &
Murphy and Thompsons.
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Paragraph 43