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the second time around…

12 June 2015

Whether or not it is an abuse of process to bring a second claim was the question for Mrs Justice Laing in the case of Lloyd v Humphreys & Glasgow Ltd [2015] EWHC 525.

Mr Lloyd had been a welder who had been exposed to asbestos fibres during his employment with a number of different employers.

X rays showed the presence of pleural plaques from as early as 1983 but it was not until 1993 that Mr Lloyd suffered any respiratory disability, although at that time he remained without a formal diagnosis.

An attempt was made in 2005/6 to claim against 2 previous employers on the basis of rare symptomatic pleural plaques. Those employers agreed a moratorium to see if Mr Lloyd’s condition would develop. Mr Lloyd’s condition did in fact deteriorate in 2005 and so the claims were again intimated against the two defendants and also against a third employer, Humphreys & Glasgow Ltd, in 2008. The claim was again brought on the basis of symptomatic pleural plaques/pleural thickening. In late 2008/early 2009 an asbestosis diagnosis was made.

Humphrey & Glasgow Ltd were insured by Excess. Excess were at this time involved in the Trigger litigation and refused indemnity on the basis of insurance policy coverage, arguing that it was the insurer who was on risk at the time the mesothelioma developed which should be liable to compensate. Excess therefore refused to engage with the claimant in settlement of his claim pending the outcome of the Trigger litigation.

Mr Lloyd issued proceedings in September 2011 owing to limitation. He issued against two defendants only, but did not issue against Humphreys & Glasgow Ltd – the claimant’s solicitors at that time having apparently forgotten that Humphreys & Glasgow’s insurers had been traced. A full and final settlement was achieved with those two defendants in November 2011.

Mr Lloyd’s condition further deteriorated and a diagnosis of mesothelioma was made in March 2012. In April 2012 Mr Lloyd instructed his solicitors to issue proceedings against Humphreys & Glasgow. Sadly Mr Lloyd died in May 2012. In June 2012 a formal letter of claim was sent to Humphreys & Glasgow but the claim was not pursued further on advice from counsel.

In November 2013 Mr Lloyd’s wife instructed new solicitors to pursue the claim against Humphreys & Glasgow on behalf of the estate. A new letter of claim was sent and proceedings were issued in January 2014.

The issues before the court were whether the issuing of a second claim was an abuse of process; and, on the basis that the claim was statute barred, whether the court’s discretion under s33 of the Limitation Act should be exercised so as to allow the claim to be pursued.

In respect of the first issue, Humphreys & Glasgow’s insurers, Excess, argued that the court should apply robust rules with regard to abuse of process especially in industrial disease cases where, given the nature of the claims, there are long latency periods.

In Dowdall v Kenyon & Sons Ltd, Beca, and Greenield & Payne Ltd [2014] a claim was allowed to be brought against three employers despite the fact that the claimant had previously brought successful claims against eight of his other former employers. A claim against the three employers were not brought with the earlier proceedings because those employers were not identifiable at the time of the initial claim – in one instance because of a misspelling of the employer’s name, and in the other cases because the insurers could not be traced using the usual channels that existed in the late 1990s. The court however considered that the bringing of a second action did not amount to an abuse of process as the three defendants had not been parties to the first action. Similarly in Lloyd, no earlier proceedings had been brought against Humphreys & Glasgow.

A claim could however amount to an abuse if it could be showed that the claim involved harassment or oppression of a defendant. Again however the court were not persuaded that the claim brought on behalf of the Lloyd estate amounted to either.

The court were persuaded by the fact that Excess had been well aware of Mr Lloyd’s claim from 2008 but had refused to contribute to Mr Lloyd’s lifetime claim pending the outcome of the Trigger litigation. Excess’ stance on the issue was well known in the insurance industry. Lady Justice Laing said that:

“Inconvenient as it may be for the Defendant to be facing a bigger claim now [mesothelioma] than the claim [for asbestos related disease] it fended off while Trigger was pending, I do not consider that it has suffered any injustice. It took a calculated risk and the gamble didn’t pay off. It presumably took that risk with its eyes open, because it was significantly commercially advantageous to do it”

The court therefore held that the claim brought on behalf of the Lloyd estate was not oppressive.

The Lloyd claim was however clearly statute barred and so the court still had to consider whether to exercise its discretion under s33 of the Limitation Act 1980.

Mr Lloyd suffered a significant injury for the purposes of the Limitation Act in 2008. This was also his date of knowledge. Mr Lloyd had acted promptly in bringing his claim but Excess chose not to engage with the claim. Mr Lloyd’s mesothelioma had only developed shortly before the delayed decision in which the Supreme Court held that it was in fact the insurer on risk at the time of exposure who would be responsible for compensating a claimant. Even if Mr Lloyd had issued the claim within his lifetime, given Excess’ stance they would not have altered their position or tested his evidence in any event and so they were in no worse position. Lady Justice Laing therefore held there were no compelling factors that weighed against granting the discretion and so the claim was allowed to proceed.

Similarly in the Dowdall case, the three employers who had not been sued as part of the initial claim because they could not be traced, in opposing the exercise of the limitation discretion, argued that they were at that time faced with a mesothelioma claim where it was going to be difficult or impossible to seek a contribution from the other defendants who had been party to the settlement of Mr Dowdall’s claim in 2003. The court however found this argument unattractive saying:

“The financial consequences of what has occurred do not justify preventing the Claimant seeking compensation for the harm which this very serious condition involves.”

In Lloyd the court were persuaded by the fact that the defendant’s insurers had been on notice of the claim for many years. From Dowdall however it seems that even if a defendant is not put on notice, a later claim will be allowed. Whilst the defendant in Lloyd was entitled to stand their ground on the indemnity position pending the outcome of the Trigger litigation, Lady Justice Laing does not appear to have been troubled in finding that in essence, what goes around comes around. The claim did eventually come back to bite the defendant and the claim was a bigger claim than the original one they faced but evidently the court is more likely to weigh moral consequences more highly than financial ones. The defendant insurers in Dowdall quite rightly raised an argument in terms of prejudice at not being able to obtain a contribution through no fault of their own when, had they been brought in originally, they probably would have achieved this. It seems that even if blameless the balance is likely to fall in favour of the claimant in these cases.

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