"Full & Final" settlement may not be what it seems after High Court mesothelioma judgment
Dowdall v William Kenyon & Sons & Ors
12 August 2014
The High Court was recently asked to deal with a claimant seeking damages for mesothelioma in circumstances where he had previously settled a claim for asbestos related injuries against a number of other employers in 2003. The matter was dealt with by Andrew Edis QC sitting as a Deputy High Court Judge.
In 1998 the claimant had been diagnosed with asbestosis with a 15%-20% level of disability. He instructed solicitors and proceedings were brought against eight of his former employers arising from asbestos fibre exposure in the workplace. Provisional damages were sought so as to allow a return for further redress should he later develop malignant disease. However, the claimant decided to settle on a full and final basis in 2003 rather than on the basis of a provisional damages order. The claimant received £26,000 net of CRU.
Mr Dowdall unfortunately went on to develop mesothelioma. He was unable to seek further damages from the original defendants, having settled the previous claim on a full and final basis. However, there were three other exposing employers that he had not sued in the original action. He therefore brought a further action against those three employers and the court was asked to determine three preliminary issues:-
Whether in light of the previous action the present proceedings were an abuse of court process
Whether the claimant was estopped from bringing the second action
Whether the second action was time barred under the Limitation Act 1980
Evidence was presented to the court that consideration had been given to suing the further three defendants in the original action. One of them was not pursued because of a misunderstanding over its identity and the other two because insurance cover had not been traced at that stage.
Abuse of process
The abuse of process point arose from the underlying public interest that there should be finality in litigation and that multiple sets of proceedings arising from the same issues should be discouraged. The three defendants argued that if they had been sued in the original action they would have taken part in joint settlement with the other parties and would not now be exposed to the much larger claim. Whilst in theory they might still have the option of seeking contribution from the defendants in the original action, such contribution proceedings had an uncertain prospect of success.
It was held that the current action was not an abuse. The fact that the current defendants were not parties to the original action did not mean that the current action could not be an abuse but nevertheless, it was a factor of considerable weight against there being an abuse. Andrew Edis QC also stressed that there was no evidence that the claimant had deliberately omitted the defendants from the original proceedings so as to “have his cake and eat it”. In other words, there was no proof that the claimant had acted in the way he had so that there would be increased damages for a full and final settlement in the original action, but with the reserved insurance of being able to go against the unsued parties should malignant disease later arise.
In terms of the estoppel point, it was highlighted that there is no automatic cause of action estoppel because the parties in the original action were not the same as the current action. However, the court also had to consider whether estoppel arose because of the principle set out in Jameson v Central Electricity Generating Board (1998) HL, expanded upon in Heaton v AXA Equity & Law Life Assurance Society PLC (2002) HL. The principle arising from those cases is that where there are concurrent tortfeasors, a settlement against one extinguishes the claim against the others unless there has not been full satisfaction of the entire claim. To determine that issue Andrew Edis QC felt that he needed to ask himself a question framed by Lord Bingham in Heaton, namely:-
Has the claimant accepted a sum which was intended to represent the full measure of his estimated loss?”
The answer to that question was no. As the judge saw it, the settlement was for risk of mesothelioma and not for the actual development of mesothelioma. The claimant had suffered a loss arising from mesothelioma, a condition that had developed after the first settlement and for which the claimant had not been compensated.
Dealing with the issue of limitation, it was firstly held that the claimant had the necessary knowledge for the purposes of s.14 Limitation Act 1980 at or shortly after 1998 when he was diagnosed as suffering from asbestosis. The action that arose for the injury at that stage must include the risk of all injury arising from the exposure complained of. The current claim was statute barred subject to whether the court should exercise its discretion under s.33 Limitation Act to allow the action to proceed. The judge reminded himself that under s.33 the court should look at all factors to decide if it was fair and just to allow the action to proceed.
He felt that the 14 year delay was of no great importance, mainly because the defendants’ prospects of defending the claim had never been good from the start. Indeed, they acknowledged they would have joined in the settlement if they had been included in the original action. As far as the judge saw things, the main prejudice against the defendants was financial, and that the liability they now faced was much higher than if they had been contributing to the previous settlement. It was also argued that the current defendants faced an uncertain prospect as to whether or not they could recover contributions from the earlier defendants in respect of the mesothelioma damages.
When weighing all factors, the judge felt that the overall balance of prejudice lay in favour of the claimant. He felt there was little prejudice caused by a loss of evidence and any real prejudice was simply financial. In reaching that decision he stated that he was heavily influenced by the suggestion that the defendants’ increased liability really flowed from the development of mesothelioma:-
The fact that the defendants might have had a chance to avoid paying for that by being joined in an action which settled before it developed really means that they have lost a chance of escaping without paying the claimant the damages to which he is otherwise presumed to be entitled.”
For further information please contact Daren Charlton Partner, on 0161 603 5148.
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