Brooks v Zurich Insurance plc: Master Davison Considers Rights Against Insurers

On 20 May 2022 Master Davison handed down judgment in the case of Brooks v Zurich Insurance PLC and Aviva Insurance (UK) Ltd, dismissing the Defendants’ application for summary judgment against the Claimant on the ground that he had wrongly brought proceedings against the insurers pursuant to the provisions of The Third Parties (Rights Against Insurers) Act 2010.  A link to the judment can be found here.

Patrick Limb KC of Ropewalk Chambers represented the Defendants.

The Claimant, Peter Brooks, was a living mesothelioma victim who had been exposed to asbestos in his 20s and 30s with two employers, who had been insured by the Defendants. The companies themselves had subsequently been dissolved. Rather than restore the companies to the Companies Register, the Claimant brought his claim for damages directly against the insurers under the 2010 Act.

The predecessor to the 2010 Act is the Third Parties (Rights Against Insurers) Act 1930. It is well established that, in order to bring a claim against an insurance company under the 1930 Act it is necessary, first, to obtain judgment against the insured. In the case of a dissolved company it would thus be necessary, first, to apply to restore the company to the Register and then to obtain a judgment before bringing proceedings to enforce the Judgment against the insurance company under the 1930 Act. The 2010 Act removed the obligation to take the first two steps or, as Master Davison put it in his judgment, condensed the necessary steps into a single action.

The 2010 Act came into force on 1 August 2016 and its effect was not retrospective (Redman v Zurich Insurance plc [2017] EWHC 1919 (QB)). Section 1 imposes a right to proceed directly against an insurer upon a “relevant person” incurring a liability for which they are insured or upon a person subject to such a liability being dissolved.

The Defendant’s application was brought on the basis that the Claimant had suffered actionable damage before the 2010 Act had come into force. The nature of the disease, so it was contended, meant that physical changes had occurred, albeit without the Claimant being aware of them, before 2016. Thus the Claimant could not enjoy the advantages provided by the 2010 Act but needed to proceed under the 1930 Act instead, taking the necessary steps, first, to obtain judgment, including restoring the companies.

The question accordingly was whether the Defendants were right that the Claimant had suffered actionable damage prior to August 2016. This question, in differing forms, has vexed the Court on a number of occasions, starting with Cartledge v E Jopling and Sons Limited [1963] AC 758 which identifies damage (which is the final component of the cause of action) by asking “whether a man has suffered material damage by any physical changes in his body”. The question is one of fact, to be assessed on the evidence in each case.

In the pleural plaques test case of Rothwell v Chemical and Insulating Company Limited [2008] 1 AC 281 Lord Hoffman developed the question of damage further, describing it as “an abstract concept of being worse off, physically or economically, so that compensation was an appropriate remedy”. In that case, which involved a symptomless condition which would never deteriorate, there was no cause of action for the pleural plaques which had “no perceptible effect” on health or capability. To have suffered damage the Claimant must be “appreciably worse off”. This approach was maintained in the platinum salt sensitivity case of Dryden v Johnson Matthey plc [2019] AC 403, where Lord Hope considered that an injury which was “without any symptoms at all because it cannot be seen or felt, and which will not lead to some other event that is harmful, has no consequences that will attract an award of damages”.

The Defendant placed emphasis on the fact that mesothelioma was a progressive and invariably fatal condition. Unlike pleural plaques, in due course the physical changes, then unknown, would advance and lead to the death of the Claimant. It could not be said, it was submitted, that a Claimant who had suffered those changes was not then worse off physically or economically.

By contrast the Claimant’s submission was that physical changes alone, even if properly styled an injury, did not amount to actionable damage. The question was whether the changes were material and the Claimant was appreciably worse off at the time. Relying upon the medical evidence in the case and also upon the Judgment of Rix LJ, in the Durham v BAII Trigger Litigation [2012] ICR 574, the Claimant submitted that mesothelioma was, until its late stages, undetectable and un-diagnosable so that, by definition, it was initially incapable of measurement or assessment. The tumour, at its outset, caused no symptoms and would be undetectable. Whilst there might be a physical change in the body, neither Claimant nor doctor was aware of it so that it could not at that time be said to be something which left the Claimant materially worse off. Progression thereafter should be disregarded, because a latent injury did not sound in damages (Guidera v NEI Projects (India) Ltd (unreported, 30 January 1990)).

In any event, so the Claimant said, the presence of actionable damage was a question of fact. On the evidence in the Claimant’s case, the material changes might have come after 1 January 2016. In the absence of further medical evidence the Defendant could not discharge the evidential burden of showing that the Claimant’s damage had occurred earlier than the coming into force of the 2010 Act. Similarly, there was no evidence specific to the Claimant identifying the point in time when the progression of his disease had become inevitable.

The Master identified that the question of when the Claimant suffered actionable damage, sufficient to complete a cause of action, was a mixed question of fact and law. So far as the question of law was concerned, the point at which the process of development of malignancy gave rise to a claim for damages was medically controversial, and developing. The stance of each party, on the law, was reasonably arguable and there was no authority directly on the point, the Guidera case coming closest. That case however, pre-dated both Rothwell and Dryden and could not be regarded as authoritative. The Master noted the Australian case of Alcan Gove PTY Ltd v Zabic [2015] HCA 33, where the High Court of Australia found that compensable damage in a mesothelioma case occurred at a point in time when undetectable changes were caused to the mesothelial cells. In Australia, accordingly, the Defendant’s stance had prevailed, but that decision was not binding and none of the subsequent authorities addressed the issue.

In those circumstances, where it was unclear whether, in England and Wales, a symptomless, undetectable, physical change in the body which would inevitably progress to incurable disease marking the point of actionable damage was unclear. Thus, as the Master found, this was a classic incidence where relevant facts had to be determined so that further development of the law would not be hypothetical. That was enough to lead to the dismissal of the application and of the Claimant’s cross application, advanced orally only at the hearing, that judgment should be entered in the Claimant’s favour. The matter required a trial, for which the Master gave Directions intended to bring the issues before the Court with some speed.

It followed that the Master did not determine whether the Defendant or the Claimant’s stance was correct. A trial is likely to follow shortly, possibly in late July.