The case of Barker –v- Corus marks an important shift on the vexed legal issue of causation, as set out in the Fairchild –v- Glenhaven Funeral Services Ltd. David Tiplady, reinsurance partner at Beachcroft, addresses the issues.

The background to this case was the House of Lords decision in Fairchild some six years earlier. Fairchild was a radical departure from the commonly held understanding of the law of causation – namely, that a defendant can only be said to have caused a particular loss or injury if the loss would not have occurred but for that defendant’s breach of duty.

In outline, the facts of Fairchild were as follows: A worker had been wrongfully exposed to asbestos dust by a succession of employers and had contracted mesothelioma from which he died. However, it could not be said during which period of employment this had occurred: in other words, it was not clear which particular employer had actually caused his death. The House of Lords decided, in the interests of justice, that each employer must be held responsible and accordingly that each was deemed to have caused the death. On this basis each defendant was potentially liable for the whole amount of the claimant’s damages. In practice, this meant that claimants could choose to pursue those employers with the deepest pockets (or of course, the greatest insurance cover), irrespective of their likely contribution to the harm suffered.

This decision has now been substantially qualified by the House of Lords in Barker. On the facts of this case, the claimant was at times self-employed, at times in the employment of others. Some of his periods of employment were extremely short. The House of Lords decided that each employer was liable only for a proportion of the claimant’s damages (calculated, presumably, according to the length and severity of the wrongful exposure). Consequently, if one (or more) of the employers is insolvent, its “portion” of the damages will now go unpaid. In contrast, under the old Fairchild principle, that employer’s “portion” would have been borne by one of the other employers, or their (re)insurers.

It should be noted that the House of Lords decision was not unanimous. One of the Law Lords took the view that Fairchild clearly laid down an exception to the orthodox rule of causation and each defendant was accordingly liable for the whole of the claimant’s damages (for which that defendant could then seek a contribution from the others). However, the clear result of the decision is that defendants (and their insurers) will now only be responsible for their “fair share” of a claim. Whether this is in fact “fair”, and, more importantly, where it leaves the law of causation in cases such as these, must now be the subject of considerable doubt.

This Viewpoint item appeared in issue 106 of JTW News - June 2006

Author: David Tiplady - Beachcroft LLP