Dowdall v William Kenyon & Sons [2014] EWHC 2822 (QB)

Case Background

John Dowdall had been exposed to asbestos through a greater part of his working life. In June 1998 he was diagnosed as suffering from asbestosis and pleural plaques and later that year started legal proceedings against seven of his former employers (the first action). At the time of the first action the only symptomatic injury which the Claimant was suffering from was asbestosis. In April 2003 the Claimant obtained a judgment against the seven Defendants to that action for the sum of £26,000 and it was accepted that this was in full and final settlement against those Defendants. The judgment related to the Claimant’s actual damage (the asbestosis) and the risk of developing mesothelioma. A claim for provisional damages, relating to the risk that the Claimant would later develop a serious disease or condition, was made but not pursued.

Unfortunately, the Claimant subsequently developed mesothelioma and sought damages against the three Defendants. The court was required to reach a decision on three issues:

1. whether the second proceedings were an abuse of process;
2. whether the Claimant was estopped from bringing the second proceedings; and
3. whether the second proceedings were barred under the provision of the Limitation Act 1980.

Ultimately, the court dismissed the Defendants’ submissions and concluded that the Claimant was entitled to bring a claim for the mesothelioma. In considering whether the claim was an abuse of process, the court followed the guidance laid down in Henderson v Henderson (1843) 3 Hare 100, as developed by Lord Bingham in Johnson v Gore-Wood (No.1) [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][2002] AC 1 (HL), and concluded that the decision not to sue the current Defendants in the first action was honestly made and that the Claimant had not manipulated the process of the court with his intention of ‘having his cake and eating it’ (see paragraph 35). The decision not to sue the Defendants in the first action was taken on the basis that they could not be located after proper enquiries had been made.

The court rejected the argument that the 2003 judgment was intended to represent the full measure of his estimated loss. The Defendants brought an argument based upon the decisions in Jameson v Central Electricity Generating Board [2000] 1 AC 455 and Heaton v AXA Equity & Law Life Assurance Society [2002] 2 AC 329 that the order included damages for the risk of contacting mesothelioma. The court rejected this and concluded, ‘it is quite clear…that the action for damages for mesothelioma is not conceptually the same as an action for the risk of mesothelioma’ (at paragraph 45) and, on that basis, said it was clear that the Claimant had not accepted a sum which was intended to represent the full measure of his estimated loss.

The judge concluded that the Claimant did have knowledge within the meaning of s.14(1)(b) of the Limitation Act 1980 Act in June 1998 as far as the second and third Defendants were concerned and 12 months later as concerned the first Defendant. However, the court considered it appropriate to dis-apply the limitation period by virtue of section 33. The court was particularly mindful of the fact that the Claimant had a substantial claim for a very serious injury and that he had a very good prospect of establishing liability agains the Defendants.

 Contributor Comments

This case raises issues which have arisen in the past decade, but this appears to be the first occasion upon which such issues have been litigated to a conclusion.

The opportunity to pursue further Defendants in these circumstances arises because of greater openness in the insurance industry, in particular through the employer’s liability tracing office.

Whilst in the circumstances the Defendant’s arguments clearly merited serious consideration, the Deputy High Court Judge’s approach was consistent with authority.  It would be difficult to argue that the second action was an abuse in the face of a clear finding that the first action had not been settled for full value and the Claimant’s conduct in relation to that action could not be criticised.

The question of whether the settlement of the first action was at full value is made more difficult by the problem in reconciling the decisions in Jameson v Central Electricity Generating Board [2000] 1 AC 455 and Heaton v AXA Equity & Law Life Assurance Society [2002] 2 AC 329, notwithstanding the attempts of the Law Lords in the latter case to achieve such reconciliation.  However, it appears reasonable to assume that Jameson will only be followed in circumstances in which there is clear evidence that the first action was settled at full value, which in most circumstances would render the second action unnecessary.

In relation to limitation, whilst the one action rule remains the law in practice it appears to be circumvented by limitation and findings; in particular, Claimants, as here, obtaining a Section 33 discretion when proceeding for a malignant condition having previously had knowledge of a benign condition.  The courts only appear willing to entertain limitation defence in asbestos cases where the Claimant is bringing an action for the same condition in respect to which he had earlier knowledge; see Buckler v Sheffield City Council [2004] EWCA Civ 920 and Collins v Secretary of State for Business Innovation and Skills [2013] EWHC 1117 (QB).

Given the nature of the application, the Deputy High Court Judge did not have to consider what might be the most difficult issue, that is whether the Claimant should give credit in his current action for the full value of the earlier Defendant’s contribution to the risk of him developing mesothelioma; in other words he had accepted an apportioned approach by his agreement to full and final damages in the earlier action.  The nature of the cause of action in these circumstances has been something of an intellectual rollercoaster ride through Fairchild, Berkeley, Section 3 of the Compensation Act 2006 and the Trigger litigation.  There may be developments or even surprises in the Supreme Court decision in IEG (International Energy Group v Zurich Insurance Plc UK).  However, it appears reasonably arguable that the Claimant should give credit in these circumstances, not just for the sums received from the Defendants in respect of the risk of mesothelioma, but for the full value of those Defendants’ contribution to the risk.  Otherwise, at least, in this respect, he is having his cake and eating it.  The Claimant, in agreeing to a full and final settlement in the earlier action, was accepting against those Defendants that he should not be entitled to further damages if he, in fact, developed mesothelioma.  It is difficult to see why he should now receive these sums via another route, in particular where he has had to rely upon the court’s discretion under Section 33 of the Limitation Act.  The modified Jameson approach could result in it being accepted that the Claimant had received full value in respect of the risk created by the earlier Defendants and have to give credit for the value of this in his current action.  Such an approach would have the result of the clear injustice of the Defendants to the first action now facing contribution claims being avoided.

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