A recent decision of Sheriff Mundy, published on 14 October, in the All-Scotland Personal Injury Court in Edinburgh has helped to clarify how the court will approach a time-barred case where an insurer is only identified after the 3 year time limit has expired.

Background

In the case of Madden v Donald Anderson Ltd, the pursuer, Paul Madden, had been diagnosed with pleural plaques in March 2007. He claimed to have been exposed to asbestos with two of his former employers, Hart Builders (Edinburgh) Ltd and Donald Anderson Ltd. He instructed solicitors, provided them with a statement on that basis and then in February 2010, raised proceedings against Hart Builders (Edinburgh) Ltd. His solicitors at the time had sought to identify policies of insurance in respect of his previous employers. No insurance could be identified for Donald Anderson Ltd which was no longer trading and in voluntary liquidation. It was understood that an enquiry had been made with the Association of British Insurers ("ABI") to no avail. In line with an internal firm policy, Mr Madden's solicitor advised that, in the absence of an insurer, they could not pursue a claim against Donald Anderson Ltd on his behalf as, with no insurance, there was limited prospect of payment. Following that advice, the pursuer provided his instructions to raise against Hart only. His claim against Hart was valued at £11,000 on a full and final basis in 2017. A deduction for unsued exposure was agreed to take account of the time that Mr Madden was employed by Donald Anderson Ltd, as per Holtby v Brigham and Cowan (Hull) Ltd [2000] 3 All ER 421 and the final damages figure paid was £8,250.

In September 2019, Mr Madden was diagnosed with a second asbestos related disease - diffuse pleural thickening.

The Pursuer's Case

Following his diagnosis of diffuse pleural thickening, Mr Madden instructed new solicitors. They conducted a search on the Employers' Liability Tracing Office (ELTO) database. This database was only introduced in 2011, after the pursuer had raised his first claim. The database revealed an insurer for Donald Anderson Ltd at the time of the pursuer's alleged exposure. Mr Madden's new solicitors raised an action against Donald Anderson Ltd in January 2020 for pleural plaques and diffuse pleural thickening. The pursuer was unable to pursue any further claim against Hart as he had already settled with it on a full and final basis. To have reserved that right against Hart, he would have required to settle his first claim on a provisional basis.

It was accepted by the pursuer that under s17 of the Prescription and Limitation (Scotland) Act 1973 ("the 1973 Act"), the action time barred in 2010, three years after his initial diagnosis with pleural plaques. However, he argued that the court should exercise its discretion to allow the action to proceed under s19A of the 1973 Act. The pursuer argued it was equitable to do so because, when the first action had been raised, Donald Anderson Ltd was in liquidation and no relevant insurance policy could be traced.

The position advanced for Donald Anderson Ltd was that the decision not to raise against them had been made based on advice following a perfectly rational assessment of prospects at the time. It was also submitted that when that decision was made, the pursuer gave up his claim and his right to claim against Donald Anderson Ltd.

Decision

Sheriff Mundy noted that, when it came to the application of the court's discretion to allow a time-barred case to proceed, much depended on the facts of each case. In coming to his decision, he did look at the prejudice to both parties - of allowing the action to proceed or not. However, a key factor was the conduct of the pursuer's solicitor, for which the pursuer must take the consequence - that being the decision at the outset of the first claim to pursue Hart Builders alone. The sheriff found this was a "deliberate, reasoned and rational decision" which amounted to an abandonment of the claim against Donald Anderson. To exercise the discretion allowed to a sheriff under s19A of the 1973 Act in this case "would be extending that discretion beyond allowable limits", and as such Sheriff Mundy granted decree of absolvitor (judgment) in favour of Donald Anderson Ltd, the defender.

Implications

This case provides an informative look at the considerations of the court when determining whether or not to exercise its discretion to allow a time-barred case to proceed. It is of particular interest in asbestos-related and other long-tail claims where a pursuer may have a number of former employers, some of whom no longer exist, and no insurance can be identified for them within the initial three-year period.

Contributors

Laura McMillan

Partner & Director of Advocacy

Ellen Andrew

Associate

Jack Barratt

Trainee Solicitor