21 April 2022
Mesothelioma: By the time a proceedings are issued on the asbestos list, much of the work is already done.
Photo: Radiopedia.org https://radiopaedia.org/cases/mesothelioma-23
Ever since Thompsons won the first asbestos case to come before the House of Lords, back in 1972, the insurers we face (and for whom as a matter of principle Thompsons has never acted) have through a series of test cases sought to chip away at both liability and costs. The most recent attack was on the long-established principle that budgeting should be disapplied when it comes to asbestos cases in Smith v Ford Contractors [2021] EWHC 1749 (QB).
The rules (CPR 3.12(1), paragraph 2(f) of PD3E) dictate that cases involving claimants with a limited life expectancy are exempt from the budgeting process. Exposure to asbestos can have fatal consequences and as a result asbestos personal injury claims often involve issues of limited life expectancy and a poor medical prognosis. But in Smith, our client had passed away in the early stages of the claim and thus the urgency of limited life expectancy had fallen away. There are other claims involving non-malignant asbestos conditions where the same could be said.
Although the decision in Smith confirms that budgeting remains inappropriate in all asbestos matters, the asbestos masters undertook a careful analysis of whether it mattered if ‘life expectancy’ was not an issue, as well as whether asbestos cases should be differentiated and what the process should be in asbestos cases to ensure (in the absence of budgeting) they are appropriately case-and-costs managed.
The established asbestos list in the masters’ corridor
The asbestos list in the Royal Courts of Justice (RCJ) carefully and proactively manages claims brought following negligent exposure to asbestos during the life of a client. They all invariably involve urgency and sensitivity that, in a decent society, comes with limited life expectancy. The dedicated case management process appropriately manages such cases smoothly and effectively from issue, through allocation, a show cause process and to a final assessment of damages hearing – saving both the time and expense of a standard court process.
Rather than differentiate between types of exposure or outcomes which would be administratively cumbersome, the directions follow a universally accepted procedure with a time frame that essentially fast-tracks them. To navigate the fast-paced directions, cases have to be almost entirely formulated before the assessment of damages hearing, which, even in a very high-value mesothelioma case or where liability is disputed, last no more than a day or two.
The emphasis of the well-oiled procedure is on case progress, with some cases lasting less than a year from start to finish and benefitting from dedicated and experienced lawyers on both sides all familiar and working regularly within the asbestos list court process. It enables living clients to see justice within their lifetime and avoids years of protracted litigation for those with non-malignant conditions or the widows and family of the deceased.
If it works, why change it?
In Smith, the defendant argued that, given the victim had already died, life expectancy was not an issue and therefore the case was appropriate for costs budgeting. The application, made in March 2021, argued that the case fell within a category to which costs management applied pursuant to CPR 3.12(1) and paragraph 2(f) of PD3E. The defendant submitted that none of the exceptions applied.
The master’s view
Master Davidson’s ex tempore written judgment carried the approval of all the asbestos masters. Having set out the expedient timetable for cases admitted to the asbestos list, it explained how distinguishing between living or deceased claimants was an “unmanageable suggestion” which would only hinder other cases in the list.
Master Davidson highlighted that cases within the list are far from straightforward and that it was not unusual for them to both involve complex medical and engineering evidence, and to be “heavily contested”. There was, in his view, “no evidence that the process of detailed assessment is not adequately controlling costs in asbestos cases” and further that “QB masters, Chancery masters and costs judges do not necessarily share this defendant’s expressed confidence that costs budgeting controls costs better, or more effectively, than detailed assessment’.
Application to appeal
Having had their application to appeal dismissed by Master Davidson, the defendant applied to appeal, maintaining that he was wrong not to order costs management of the case – it satisfied the criteria of CPR 3.12(1) and budgeting was the only way that costs could be controlled before they were incurred, it was argued.
Permission to appeal refused
On 14 December 2021, Mrs Justice Collins refused permission to appeal. Her succinct two-page decision reinforced that Master Davidson’s decision had been reached with consideration paid to all cases in the asbestos list, set out the asbestos convention, why it came about and why budgeting was disapplied, and noted that all of the asbestos masters had approved the ruling.
Mrs Justice Collins was not persuaded that there were in the circumstances any other compelling reasons to impose the “administrative burdensomeness” associated with distinguishing between deceased and living cases.
What would costs budgeting achieve?
The case management hearing in a case in the asbestos list usually involves the parties agreeing draft directions and a short hearing to set the directions to trial. There is no pre-trial review and even in the most contested of matters where liability is denied, the process remains streamlined in that directions can still be agreed or finalised at a case management hearing which often deal with all directions, including a date listed for the assessment of damages hearing.
Both the asbestos masters and the Court of Appeal recognised a costs budgeting hearing would extend the assessment of damages hearing. This includes the detailed process of budget preparation, which involves a Costs Lawyer and fee-earner coordinating and liaising on the incurred costs and working through anticipated future possible costs., as well as the process of the Precedent R negotiations required seven days before any case and costs management hearing. This would delay listings considerably – something the asbestos list avoids.
Given that, by the time of a case and costs management conference, most of the costs in an asbestos case have already been incurred, there is the question of whether the hurdle of a costs hearing with its inherent time and expense (the 1% and 2% standard budget fees for a start) could be justified. The historical evidence-gathering will have taken place, the liability position (denial or admit) will be determined and the ‘only’ consideration is whether there is a need for a show cause hearing or a list of directions for the case to proceed to assessment of damages, which is often less than six months away.
The prize presented by the asbestos list for those of us committed to act only for claimants and with efficient case-handling procedures is to see a case to liability trial or disposal within a victim’s lifetime. That calls for front-loading claims to ensure that, on issue of proceedings, the claim is as ready as possible to be subject to the rigours of timetabling in the asbestos list.
It is built into Thompsons’ representation of those who have had the misfortune of being exposed to asbestos and have, years later, succumbed to an asbestos-related condition, of whatever severity, that on issue we have a fully particularised schedule of loss and witness evidence upon which reliance is to be placed. This means fact-finding exercises are all complete, evidence is largely complete and all that usually remains is to follow the procedural timeline of directions and preparing for a trial. There is little left to budget.
Budgeting suits multi-track cases where the direction of a case could drift and the trial timetable is a couple of years away – but in the asbestos list, the process is so carefully managed that the budgeting will not add anything other than time and delay.
So why was the paying party so keen for budgeting?
Was this an attempt to force more cases through the budgeting process in a bid to further limit claimant costs? But budgeting would add an additional layer of expense and only serve to increase costs.
Was this solely aimed at cases where there is no issue of a limited life expectancy? As Master Davidson pointed out, imposing a budgeting process on those would hinder the progress of cases in a ‘living list’ too as the court became embroiled in matters other than case progression. To be ultra cynical, this could ultimately save insurers payments for post-trial ongoing treatment.
Conclusion
The jury is out on costs budgeting amongst both practitioners and the judiciary. There are arguments that it can slow litigation and change the focus to one of costs during the case management phase of a case. It involves a significant amount of time and expense in the preparation of the costs budget and the costs management hearings themselves are long and detailed requiring significant court time in an already severely pressured list. It is a very costly and contentious additional layer to any personal injury claim and can see three or more representatives from each side attend.
Budgeting can ‘add value’ if the costs in a case are likely to run off course and need close management, and some argue it makes the detailed assessment process easier resolving costs more quickly following settlement of the main action. At the same time, the high-profile cases of Merrix v Heart of England NHS Foundation Trust [2017] EWHC 346 (QB), Harrison v University Hospitals Coventry & Warwickshire NHS Trust [2017] EWCA Civ 792, Barts Health NHS Trust v Salmon (unreported) (17 January 2019) (HHJ Dight) and Utting v City College Norwich [2020] EQHC B20 (Costs) all demonstrate that arguments in fact continue at detailed assessment despite this and that costs are still subject to intense scrutiny whether budgeted or not.
Asbestos cases are distinguishable from a multi-track case of similar value. They have different issues and priorities and the asbestos list recognises this and deals with them appropriately. Budgeting just simply is not appropriate in every case and here, thankfully, the clients’ needs have been put before those of defendant insurers.
The ultimate irony of this matter was that, by the time Mrs Justice Collins was putting pen to paper, it had long since settled.
Charlotte Stainton is a Costs Lawyer and Associate at Thompsons Solicitors