Scottish Appeal Court confirms local authorities' liability for exposure by predecessors in mesothelioma case
The Scottish appeal court’s decision in this case confirms that Scottish local authorities are liable for claims for wrongs done during periods of employment with the authorities’ statutory predecessors, even where the resulting injury manifests itself after the date on which the statutory predecessors ceased to exist following local government reorganisation.
Following local government reorganisation, arguments have been made on behalf of Scottish local authorities that the relevant legislative provisions transferring liability from their statutory predecessors should be interpreted in such a way as to exclude liability for a breach of obligation committed by those predecessors. That argument was unsuccessfully advanced in 2001 in the case of Downie v Fife Council when Mr Downie was allowed to proceed with a claim for compensation following exposure to asbestos while employed by Fife Council’s statutory predecessor. The Court interpreted the relevant legislation as effectively transferring liability from the statutory predecessor to Fife Council.
The argument was renewed and refined in two cases in 2012 – Anton v South Lanarkshire Council and Bavaird v South Lanarkshire Council - and two conflicting decisions were issued.
Both cases involved mesothelioma claims. In both cases the individuals had been exposed while employed by South Lanarkshire Council’s statutory predecessors, but the mesothelioma symptoms only manifested years after the local government reorganisation.
The Council argued that liability under Scots law could only arise when there was both (a) a wrong done – in this case, exposure to asbestos; and (b) a resulting loss - the development of mesothelioma. As only the first of these elements existed at the time of the local government reorganisation, there was nothing which could be transferred as a “liability” from the previous body to the local authority in terms of the relevant legislation governing the reorganisation. Consequently, as nothing had been transferred under the relevant legislation, the Council could not be liable when the loss later arose.
In both cases, the judges who heard the cases initially had to interpret the legislation which transferred the rights and liabilities from the various statutory predecessors to the current local authorities and in particular, they had to consider the meaning of the word “liabilities” as used in that legislation.
In Anton, Lady Clark decided that the exposure to asbestos created a potential liability and held that the legislation (and the word “liabilities”) was to be interpreted so as to cover potential liability which would be validly transferred to the Council. She thought that policy considerations dictated that this was the correct decision, as a claimant should not be deprived of an otherwise valid claim, simply because of local government reorganisation. She allowed the compensation claim to proceed.
In Bavaird, Lord Brailsford arrived at the opposite view, effectively upholding the local authority’s argument and deciding that an actual liability involving both elements – that is, a harm being done and a loss being incurred - had to exist at the date of transfer if a liability was to be transferred to the local authority under the legislation. On that basis, he did not allow the compensation claim to proceed.
The claimants in Bavaird appealed that decision.
Appeal Court Decision
The Scottish appeal court has overturned Lord Brailsford’s decision. It has held that local authorities are liable for claims for wrongs done during periods of employment with the authorities’ statutory predecessors and “liabilities” in the relevant legislation should be interpreted as covering potential (or contingent) liabilities. Where an employee has been exposed to asbestos while employed by the Council’s statutory predecessor, this is a potential liability which existed at the time of the reorganisation. On that basis, liability was transferred to the Council at the time of reorganisation in terms of the legislation.
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