(Stick with me, it’s a slow burner, if you can’t be bothered hit ctrl F and skip to Lord Justice Rix.)
In 1916, in the New York Court of Appeal Judge Benjamin Cardozo made good law from bad reasoning.
The background to the matter is thus. Mr Donald MacPherson, a stonecutter, was injured when one of the wooden wheels of his 1910 Buick Runabout collapsed. The defendant, Buick Motor Company, had manufactured the vehicle, but not the wheel, which had been manufactured by another party and installed by defendant. It was conceded that the defective wheel could have been discovered upon inspection. The defendant denied liability because the plaintiff had purchased the automobile from a dealer, not directly from the defendant.
The perfectly logical argument from Buick was that there was no privity of contract between the Claimant and Defendant and thus the Defendant owed no duty to the Claimant. The Claimant’s action lay against the seller of the motor vehicle and the terms of the contract on which he purchased it. It would then be for the seller to sue Buick and Buick to sue the wheel manufacturer. Of course at the time, one of rapid industrialisation of America and the early days of motor vehicles, contracts did not tend to include a warrant as to the satisfactory quality of goods purchased.
Essentially what MacPherson was trying to do was extend the duty of care owed by a manufacturer in tort to the eventual purchaser rather than the immediate purchaser/distributor. Until this point an end user was too remote to be in the contemplation of the manufacturer.
Cardozo realised the landscape had changed from a fairly simple agrarian society sort of thing with goods being made by the local blacksmith to one where mass produced, cheap, death trap, prototype cars were being punted to ill advised consumers. He therefore mashed contract and Tort together to get the result he wanted and gave the leading judgment thus.
“If the nature of a thing is such that it is reasonably certain to place life and limb in peril when negligently made, it is then a thing of danger. Its nature gives warning of the consequence to be expected. If to the element of danger there is added knowledge that the thing will be used by persons other than the purchaser, and used without new tests, then, irrespective of contract, the manufacturer of this thing of danger is under a duty to make it carefully. That is as far as we need to go for the decision of this case . . . . If he is negligent, where danger is to be foreseen, a liability will follow”Which extends the common law duty of care that a manufacturer owes to the end user and started the log slog to the formal development of Product Liability.
Now I say this, not to show that beneath my crass shouty exterior I did show up to the odd lecture at law school but rather because in the UK, at the shiny shiny new Supreme Court (formerly the House of Lords) there is currently waiting to be heard the Employers Liability Trigger litigation appeal.
This in itself takes a bit of explaining but briefly. The history of construction and manufacture, at least in the UK is one of “dunno what that stuff is but since nobody has immediately dropped death it can’t be bad”. Thus we have reams of judical comment relating to dermatitis, blindness, industrial deafness, limbs missing, extra limbs growing and asbestos related disasters. We have so many asbestos related disasters that we now have judges talking about Mesothelioma Jurisprudence!
The Employer’s Liability (EL) trigger litigation concerns mesothelioma. Broadly we have a body of claimants who were heavily exposed to asbestos in the 50s and 60s. Asbestos is naturally occurring and, good news to the reader, you’ve got some in your lungs as it is present in low level air currents. Fortunately your body fights it and you don’t tend to develop a huge malignant tumor and die. If heavily exposed to certain types however your body’s defences will eventually be overwhelmed and you die a horrible and gruesome cancerous death.
Thus it is with mesothelioma it’s about 25 years from exposure to symptoms manifesting and of that the last 5 or 10 years is where the body pretty much gives up and a tumor starts forming.
Historically, with the various firms of the 50s and 60s that let exposure happen having gone pop long ago, insurers would have to step in and would broadly accept that if an exposure took place during their policy period then they would shell out.
Eventually however, as the medical knowledge and opinion on mesothelioma became more sophisticated some insurers (I say insurers, evil lawyers like me who get paid to stop dying pensioners getting any money) began to consider whether, with the long gestation period there was in fact any injury arising during the policy period at all.
Eventually an insurer broke from the pack and ran a case (Bolton v MMI) arguing that, yes it was obliged to indemnify Bolton Council if someone was injured during it’s period of cover but the claims for mesothelioma fell outside of the policy cover so, sadly they would not be covering. MMI lost but the basis for this was the interpretation of policy wordings and whether ‘sustained’ injury and ‘caused’ injury were the same thing and if they were the same thing when did these triggers happen. MMI had “caused” in it’s public liability policies but had ‘sustained’ (which would avoid it having to pay out) in its Employer’s liability policies.
Insurers jumped on this in subsequent cases and started to decline cover. And there is possibly the bitterest litigation ever fought between Zurich and MMI which is broadly just Zurich calling MMI a dick for a few years.
There then erupted a full scale battle royale test litigation between a group of insurers declining cover and a group of claimants/local authorities/other insurers, that we are calling the trigger litigation and which involved a depressingly detailed investigation of the policy wordings focusing really on what ‘sustained’ and ‘contracted’ which were used interchangeably by insurers in their policies meant. The result being that insurers with policy wordings of ‘sustained’ would avoid their policy being triggered.
This potentially creates huge black holes in cover and while the reasoning has been broadly confirmed by the Court of Appeal Lord Justice Rix has left open the possibility of a new Tort coming into being one where there is a liability arising for increasing the risk of an injury/cancer/etc occurring when an exposure has been made.
(right, so I’ve chopped this down a lot and tried to compress but I would recommend that anyone who can should have a look at this and keep an eye out for how the Supreme Court jumps in 2012)