Legal Update
Summer 2011

Article 1 - Mesothelioma: The Die Has Been Inexorably Cast - David Pugh

Sole defendants and their insurers in "low level" asbestos exposure cases now face full liability for damages, despite other potential causes.

In the conjoined appeal of Sienkiewicz (Costello Deceased) v Greif (UK) Ltd; Willmore v Knowsley MBC [2011] UKSC 10, a seven-judge bench of the Supreme Court decided that where culpable exposure to airborne asbestos fibres is proved, it will be rare for a defendant to be able to escape liability: Only if it can be shown that such culpable exposure was de minimis and irrelevant as regards the mesothelioma would there be a defence.

Sienkiewicz further relaxes the burden of proof upon the claimant, following on from the House of Lords decision in Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22. Before Fairchild, the conventional ‘but for' test for causation applied and many claims failed because the Claimant was unable to establish which fibre or fibres triggered his mesothelioma.

The Fairchild exception, which was made in the context of claims against multiple employers, provides that defendants breaching their duty of care "materially increase the risk" of mesothelioma, and should therefore be jointly and severally liable. Fairchild was refined in Barker v Corus [2006] UKHL 20, to the effect that each party was only liable for the proportion of damages correlating to their contribution to the risk of the claimant. However Section 3 of the Compensation Act 2006 ("Section 3") which is specific to cases of mesothelioma, overturned the decision in Barker, and provides that a "responsible person" will be liable for the whole of the damages caused, and the liability will be joint and several with any other liable party.

As a consequence of the combined effect of Fairchild, Barker and Section 3, by the time their Lordships considered the appeal in Sienkiewicz, as Lord Brown said, "the die was inexorably cast". The control measure provided by Barker, the principle of aliquot liability, had been removed by Section 3, restoring the principle that any tortfeasor is liable in full for an indivisible injury. In Sienkiewitz, the claimant was employed by the defendants in the capacity of an office worker in a factory. Her duties took her to all areas of the factory, including areas that were, from time to time, contaminated by asbestos. The defendants were found liable because their actions had caused an increase in risk of mesothelioma by 18%. This was found to be so despite the probable cause being background environmental exposure (24 cases per million as opposed to occupational exposure 4.39 cases per million).

As observed by Lady Hale, the result was the logical consequence of Fairchild. Speaking obiter of any attempt to reverse Fairchild, "even if we thought it right to do this, Parliament would soon reverse us." The Supreme Court was also reluctant to allow the appeal however, due to the "rock of uncertainty" of the medical cause of mesothelioma. In this respect the court has left the way clear for reversion to the conventional causation test, should advancements in medical science enable clinicians to clearly distinguish the different causes of mesothelioma. In the meantime, unless it can be shown that a claimant has negligently contributed to their exposure, defendants' should consider mesothelioma cases all but a lost cause.

Article 2 - Separation Agreements After Radmacher - Simon Lillington

Radmacher (formerly Granatino) v Granatino [2010] UKSC 42, was not about separation agreements (post-nuptial agreements) but about ante-nuptial agreements. MacLeod v MacLeod [2008] UKPC 64 had been about a post-nuptial agreement, but, further categorisation of agreements is needed:-

(1) Ante-nuptial agreements: Made before marriage;

(2) Post-nuptial agreements regulating the parties' financial rights both during the marriage and on divorce, e.g. MacLeod and NA v MA [2006] EWHC 2900 (Fam) (these are quite rare);

(3) Separation agreements: Post-nuptial but made, not during the relationship as in (2), but at the point of, or after, separation;

(4) Agreements to compromise a claim for ancillary relief or "Xydhias agreements" after Xydhias v Xydhias [1999] 2 All ER 286.

Radmacher was only concerned with ante-nuptial agreements but that did not stop the majority of the Supreme Court saying: (i) there was no material distinction between ante-nuptial agreements and post-nuptial agreements [para 57] and (ii) "...the ancillary relief court should apply the same principles when considering ante-nuptial agreements as it applies to post-nuptial agreements."

So, given that a separation agreement is a postnuptial agreement it ought to be dealt with in ancillary relief on the same principles as apply to an ante-nuptial agreement. Unfortunately, it is not that simple. In MacLeod the Board had held that the correct approach to post-nuptial agreements was the same approach as the court took with regard to variation of maintenance agreements in s35, MCA 1973.

However, the Supreme Court in Radmacher said [para 65]: "These tests [i.e. the Board's tests] are appropriate for a separation agreement. They are not necessarily appropriate for all post-nuptial agreements." [My emphasis]. So, there may be a subtle difference in approach depending on whether the post-nuptial agreement was made just after marriage or later in the marriage perhaps when it is rocky (NA v MA and MacLeod) or at the point of separation. For separation agreements, therefore the MacLeod test may still be important: Look for a significant change in circumstances to justify a departure from the terms of the agreement.

One thing is clear: A separation agreement will not carry full weight unless both parties entered into it of their own free will, without undue influence or pressure and informed of its implications. All the circumstances surrounding the agreement are relevant and must be considered. The "Edgar principles" are still important. The court should take account of the standard vitiating factors, duress, unconscionable conduct, a party's emotional state, pressures to sign, the parties' maturity and whether they had been married before. Any of these findings may eliminate / reduce the weight to be attached to the agreement. Absent any of the above the court should give effect to the agreement "unless in the circumstances prevailing it would not be fair to hold the parties to their agreement." [para 75]. This is the acid test and it is bound to lead to argument. The Supreme Court gave guidance of factors which may render agreements unfair, but only aimed at ante-nuptial agreements, so are of limited application. A separation agreement that does not meet needs or address compensation is more likely to be unfair than one that does not apply the sharing principle as a court would have done on an ancillary relief application, so that if a party enters into a separation agreement that meets his / her needs and where there are no compensation issues it is almost certainly not going to be regarded as unfair simply because the division of capital does not accord with how the court would have applied the sharing principle to the capital.

The approach to challenging the terms of a separation agreement is unclear. The standard vitiating factors will reduce or eliminate its weight. If there are no vitiating factors and it was entered into freely with a full understanding of its implications then it will only be departed from if the circumstances prevailing mean it is unfair (to hold the parties to the agreement). This may depend on showing a change of circumstances (MacLeod) or a failure to meet need or compensation, but there is scope for many arguments to be run here. An unequal application of the sharing principle to the capital is very unlikely to be sufficient to persuade a court to depart from its terms.

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