Where a disease results from an exposure or exposures that should be controlled by a duty holder, then there is a potential for that duty holder to be found liable for the loss to the victim. Liability could follow if it were shown that the appropriate duty of care was breached and that that breach was the proximate cause of the specific harm in question.

The usual test of causation is the “but for” test, i.e. but for the negligent exposure in question there would be no, less or later disease. Harm can be found to be compensable if it has been caused, made worse or accelerated by negligent exposure. However, there are situations where liability is decided on the basis of material contribution i.e. a number of duty holders were each liable for an identifiable portion of the harm done. The classic example would be noise induced deafness arising from a series of periods of employment in noisy industries. In general there are no clear standards for determining material contribution; depending as it does on a complex interplay between the:

• degree of the duty of care that should be expected,
• strength of the link between exposure and outcome,
  relevance of other potential causes of the same outcome or other exposures controlled by other duty holders,
• the need to find an appropriate means for making compensation available.

In one extreme example, Fairchild v Glennhaven Funeral Services Ltd and Others, the judgement was based on a presumption that exposure to increased risk was the equivalent of material contribution, leading to a situation where there was joint and several liability. The scientific merits of this particular presumption could be debated but no well-balance argument would give unequivocal support to this conclusion.

Asbestos Dust

Scientific evidence quite often demonstrates an increased risk of disease following an identified exposure. Most often, in the context of occupational or pollution exposures, such reports would not satisfy a but-for test or a balance of probabilities test. Strength of association between exposure and outcome is measured by risk ratios (RR) in properly conducted prospective studies. Serious consideration should be given to reports which clearly show the strength of association (RR) between exposure and outcome is greater than 2.0. Most modern published findings show RR values between 1.0 and 2.0. Do these demonstrate material contribution? If not now, then when will they?

Understanding of diseases; causes, cures and diagnosis is ever increasing through biological and medical research. As it does so, the potential for identifying direct links or material links between duty holders or potential duty holders and victims of disease also increases. Occasionally, science does show that an accepted link is not substantiated. For example many commentators including some in positions of authority still hold the ‘common’ view that stomach ulcers are caused by stress.

Each year hundreds of thousands of quality, peer reviewed scientific articles are published, any of which could have some relevance to causation, diagnosis, prognosis, rehabilitation and duty of care now or at some time in the future. In addition, there are countless editorials and journalistic articles published that could draw attention to new general liability exposures.

General liability insurers and their reinsurers do take measures to assess such emerging evidence in the context of current understandings, demographics and legal precedents. They are also mindful of potential changes in case law and the increasing use of the precautionary principal to set degrees of duty of care, both of which could interact with scientific developments to create significant changes in liability exposure.

FSA Guidelines to insurers make specific mention of the expectation that insurers will keep up to date with emerging and changing liabilities, especially those with the potential to cause a significant financial impact in the long term. The FSA Guidelines do not say haw this is to be done but state that changes in scientific knowledge and legal standards should play a part. Inspectors will be expecting to see evidence of how this monitoring and assessment is being done in each liability insurance company. They will want to see that the company’s strategy is sensitive to these issues.

Diseases can be particularly problematic for underwriting and reserving if:

• There is a long latency between exposure and manifestation. This creates problems for estimating the effects of social and medical cost inflation;
• Where harm accumulates as a result of multiple exposures.

Both mechanisms lead to difficulties in assessing the appropriate degree of the duty of care required and whether or not the duty holder meets that standard. They also lead to administrative costs, incurred in the process of deciding when the Date of Knowledge should be defined and in deciding which policy(s) should respond.

listed below are 5 potential or actual changes in liability exposure that have presented themselves in recent history and where insurers might not have been able to predict these developments at the time of underwriting the risk.

1. Where a hazard had been researched/ publicised but where examination of science still reveals significant uncertainties. The example chosen is the proposed link between exposure to emfs and diseases with long latency periods. Electro-magnetic fields of the sort produced by electrical power transmission and radio communications. The electric field component in these applications is not generally held to be a cause for concern for disease.
2. Where a new disease had been added to those that could be compensated, demonstrating the transition from no liability to accepted liability. The example being bronchitis.
3. Where a duty of care had been described for the prevention of one outcome, but which could later be applied to another, much more significant outcome. The example is the guidance on stress at work, which was developed on the back of evidence concerning mental well being but which could at some point be used as evidence in cases involving heart disease.
4. Where an agency has taken measures to establish a date of knowledge by informing potential defendants of the risk by dated letter. There is increasing conviction that passive smoking is a material cause of lung cancer, but this is not yet established by authorities. One law firm has adopted the above tactic in order to establish a date after which the duty holder could no longer claim to have no knowledge of the debate in this field.
5. Where the courts were currently re-considering an example of causation / outcome where previous decisions have found there to be no link. The example in this case being exposure to manganese fumes and the development of Parkinson’s Disease.