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Dockworkers Asbestos Test Case: Rice and Thompson v Secretary of State for Trade & Industry and Stuntbrand Line Ltd

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Dockworkers Asbestos Test Case:

Rice and Thompson v Secretary of State

for Trade & Industry and Stuntbrand

Line Ltd

NEIL FISHER

1

Keywords to Follow

Abstract

In this article Neil Fisher of John Pickering and Partners discusses the first instance and Court of Appeal decisions inRice & Thompson v Secretary of State for Trade and Industryarising out of the Dock Labour Scheme. The case concerned the liability of the National Dock Labour Board (now the DTI) for asbestos exposure of dockers from 1947 to 1967. The exposure of many dockworkers to asbestos during this period technically occurred whilst they were employed by a myriad of private companies many of whom have disappeared and/or are uninsured. He comments on the decision which established a liability on the part of the Board to dockworkers notwithstanding they were not the actual employer responsible. In doing so he looks at the scope of the duty of care the Courts found to apply to a statutory body. ML

One of the most common difficulties in asbestos related cases involves tracing solvent employers or relevant insurers. This is none more so than in this country’s docks. This very problem gave rise to the cases ofRice and Thompson v Secretary of State for Trade and Industry. It involved the investigation of a national, statutory scheme which existed in its relevant form from 1947 until 1967. It was almost 40 years later that the issues were considered by the High Court and more recently by the Court of Appeal.

The Dock Labour Scheme was created by the Dock Workers (Regulation of Employment) Act 1946 and the Dock Workers (Regulation of Employment) Order 1947 and was based upon a similar war time scheme. At its height, in the mid 1950’s, it employed as many as 80,000 dock workers and at the time of decasualisation in 1967 there were approximately 57,000. A fifth of the total National Dock Labour workforce was employed in the Liverpool Docks.

Section 1 of the 1946 Act made provision for ‘‘ensuring greater regularity of employment for dock workers and for securing that an adequate number of dock workers are available

1Neil Fisher can be contacted at John Pickering and Partners LLP, Old Exchange Buildings, St. Ann’s Passage, 29/31

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for the efficient performance of their work’’. Such purposes were essentially economic and were to provide a pool of trained available labour. However, s.1(2) provided that the scheme could make a ‘‘satisfactory provision for the training and welfare of dock workers, insofar as such provision does not exist apart from the scheme’’. Interestingly the act used the words ‘‘A scheme may provide’’ whereas the regulations of 1947 stated that ‘‘the functions of the National Board shall include all such activities and operation’’ including those mentioned above.

The scheme established the National Dock Labour Board and, under its umbrella, various local dock labour boards for ports throughout England, Wales and Scotland. The National Board and the local boards consisted equally of representatives of employers and employees.

There was a pool of skilled labour and membership of that pool was gained by the dock worker entering onto the register. Part of the intention of the scheme was to provide not only the regular supply of labour but also the security of income for the dock worker himself. Whilst on the register, the dock worker was entitled to be paid a minimum sum by the National Dock Labour Board together with additional sums if his labour was actually required by a ship owner or stevedoring company. These additional sums were paid by the board as agent for the registered employer. The running costs of the board were paid by a levy on the wages recovered from the registered employers.

All employers in the docks had to be registered but as noted by the Devlin Enquiry in 1965 ‘‘the only qualification for entry on the register of employers is a wish to employ dock workers’’.2There were as many as 2000 registered employers in 1947 and by the mid 1960’s there was still approximately 1500. Lord Devlin noted that many of these employers ‘‘do practically no work at all and many are casual employers who do an occasional job’’.3These casual employers were unlikely to provide any equipment (typically hiring cranes from the port authority or using ships’ gear). Many did not even have any premises and were ‘‘unable to ensure proper working conditions for the men they employed and maintain a proper standard of skilled supervision’’. In general he noted that they lacked ‘‘competent personnel policies’’.4 His report led to the decasualisation of employment in the docks in September 1967. Immediately prior to decasualisation there were 1268 employers and on completion of a new licensing system after decasualisation there were fewer than 500 nationally. Many employers disappeared overnight. They had no assets and probably had never been insured. Even in the case of larger employers, such as for instance, A. & E. Smith Coggins Ltd in Liverpool, to whom many dock workers were transferred at the end of decasualisation in 1967 and which was later dissolved, there were problems with insurance cover. Payments had been made by insurers in the past but it was not until more recently that it was realised that they were not actually on risk for the relevant periods.

In this particular case we represented the widow of the late Edward Rice who died of mesothelioma. He was employed under the NDLB Scheme in Liverpool from 1955 until 1967 and then was transferred to Mersey Docks and Harbour Board on decasualisation and remained working in the docks until 1982. We also represented Robert Thompson who was employed under the scheme with the NDLB from 1966 until 1967 and he too was transferred to the employment of the Mersey Docks and Harbour Board where he remained until 1983. It was alleged that their only exposure to asbestos dust was prior to 1967.

Both men had unloaded asbestos cargos from ships belonging to what was then known as the Clan Line (now Stuntbrand Ltd). This was a large shipping line regularly discharging

2Report of a Commission Appointed to Enquire into the Operation of the Dock Workers (Regulation of Employment)

Scheme, 1947 (Cmnd, 98130).

3See above fn.2. 4See above fn.2.

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cargos, including asbestos in Liverpool docks and elsewhere. However, each of their ships were separately insured by different P. & I. Clubs. Whereas in the past claims were successfully pursued against them now that one of the P. & I. Clubs is in run off, the agreement, if there was such an agreement, between those clubs behind the scenes to deal with these claims appears to have broken down. It has now proved necessary to establish the identity of the ship on which the dock worker was exposed to establish the identity of the relevant P. & I. Club. In the case of Mr Rice it was not possible to establish the names of any of those ships and the solicitors for Stuntbrand, which is in liquidation and has no assets came off the record. Another very important feature is the ‘‘pay to be paid’’ rule. P. & I. Clubs provide indemnity insurance as opposed to liability insurance which requires that a member must settle the claim against him before indemnification under the club cover. Where a member is insolvent he cannot pay the claimant and no right can therefore accrue against the club. This point was dealt with by the House of Lords in theFanti case5 where they upheld the ‘‘pay to be paid rule’’. At the same time Lord Goff warned clubs not to seek to hide behind the ‘‘pay to be paid rule’’ in the cases of personal injury or death. This however, as far as I am aware, has not been tested. In the absence of any other potential defendants it was therefore important to establish liability against the Board, its successor in title being the Secretary of State for Trade and Industry.

To understand the case it is important to appreciate the relative responsibilities of the board and the dock worker. The dock worker was obliged to attend a ‘‘call’’ twice a day at 8.00am and 1.00pm. They attended their allocated ‘‘pen’’ at their particular dock. Each group of men, porters, holdsmen, crane drivers, bogey drivers, etc stood within their own marked area. The doors were then locked and then a representative of the board and usually the registered employer selected those men that they required. They handed over their pass books and attended the relevant ship for discharge on loading. It was at the point of allocation that their employment with the board terminated and their employment with the registered employer began. They were not entitled to refuse any job for which they were selected. They were obliged to attend the call. If not selected they were obliged to attend the call in the afternoon. If necessary they were also required to travel to other nearby ports if selected. For instance in Liverpool many men had to travel to Preston or Manchester. They were obliged to following the instructions of the representatives of the board or the registered employers. Failure to do so, or failure to attend the call, or to refuse work, would lead to disciplinary action by the board which could lead to suspension or even dismissal and therefore loss of livelihood from the docks. The registered employers had no responsibility at all for discipline. If they encountered problems with the dock worker then they would refer this to the board. The board itself was, as established by statute, the employer of the dock workers save when they were hired out to the registered port employers. They carried out the allocation, paid wages, provided pensions and holiday pay and recorded accidents. Importantly they were responsible for discipline, the provision of medical services and welfare of dockers and were required to plan future labour requirements within the docks. They had their own offices, administrative employees and medical staff. They were responsible for training in the absence of training by registered port employers. From the very nature of those registered employers, as acknowledged by the Devlin Enquiry, such training was unknown. The training schools run by the board developed over time and the training was carried out over an initial three-week period. However, in periods of labour shortages, that training could be reduced

5Firma C-Trade S.A. v Newcastle Protection and Indemnity Association(The Fanti case),Socony Mobil Oil Co Inc v West of

England Ship Owners Mutual Insurance Association(London) Ltd (The Padre Island case) (No.2) [1990] 2 Lloyds Rep. 191 (H.L.).

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to one week. The training covered areas of health and safety, general knowledge of the industry and technical ability and the safe and efficient methods of cargo handling. Men were trained in preparation of cranes, bogeys and other vehicles.

The board also ran surgeries in the dock and employed medical officers. These medical officers attended annual conferences and even prepared a report on the problems men encountered working with dusty cargos. This report does not, however, appear to have covered the dangers of asbestos. They could excuse workers with bad backs from working on heavy cargos or men with bronchitis working in dusty conditions.

It had always been the Board’s approach that they had no responsibility for the dock workers when they were discharging asbestos cargo on the basis that their employment had been transferred to the registered employers. It was therefore agreed that the case should proceed to a trial on a preliminary issue. By the time the case reached the Court of Appeal that preliminary issue was: ‘‘Did the National Dock Labour Board owe a duty of care to Edward Rice and/or Robert Thompson to take reasonable steps to protect their health and safety in respect of work carried out by them as registered dock workers, whether for the second defendant (Stuntbrand) or any other registered employer for whom they had been allocated by the NDLB pursuant to the provisions of the NDLB Scheme 1947 or that scheme as subsequently amended’’.

The claimants case was that the Board, as employer of each dock worker, owed him the duty of care of an employer up to the moment of allocation and in particular when making the allocation. The statute composed a duty to employ the dockers and therefore the NDLB had duties arising from that relationship. We relied upon the employer’s non-delegable duty of care and the line authorities fromWilsons & Clyde Coal Company Ltd v English.6 We also relied upon the responsibility of an employer to employees working on the premises of a third party (Smith v Austin Lifts7andWilson v Tyneside Window Cleaning Company8) andMcDermid v Nash Dredging and Reclamation Company Ltd9). In these cases employment did not actually transfer from the original employer to another but clearly, Lord Denning inSmith v Austin’

contemplated that if an employer knew or ought to have known of a danger he ought to have taken what was reasonable care in the circumstances to safeguard the employee from it. By extension we argued that if the board knew that there was a potentially dangerous cargo being unloaded by, or under the control of, a registered employer and for the purposes of unloading that cargo the board was supplying employees, who at the time, immediately prior to allocation, were in the employment of the board, then it would have a duty to take reasonable care to see that its employees were safe in carrying out that work. This view was supported by the majority in the Australian case of Crimmins v Stevedoring Industry Finance Committee10. McHugh J. said ‘‘I find it impossible to accept, for example, that if the authority (the Stevedoring Industry Finance Committee) knew that it was sending water side workers to a ship when there was a high risk of death or injury, it owed no duty of care to those workers’’.

It is important to note that there were significant differences between the British and the Australian Dock Labour Schemes. The latter was based upon the British Scheme but with modifications. Despite the fact that the Authority paid attendance money, sick pay and long service leave and public holiday and had certain powers of discipline and also carried out

6Wilsons & Clyde Coal Company Ltd v English(1938) 1 A.C. 57. 7Smith v Austin Lifts(1959) 1 W.L.R. 100.

8Wilson v Tyneside Window Cleaning Company(1958) 2 Q.B. 110. 9McDermid v Nash Dredging and Reclamation Company Ltd(1987) A.C. 906. 10Crimmins v Stevedoring Industry Finance Committee(1999) HCA 59.

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the allocation, it was not that the actual employer of the dock worker. The Authority was empowered to appoint inspectors who were authorised to make investigations and to report regarding matters of safety and efficiency of stevedoring operations and had the power to encourage safe working conditions and provide proper safety equipment. The safety function is therefore much more explicit.

There was a particularly unhelpful case ofVine v NDLB11where Lord Keith considered it was impossible to equate the position of a registered dock worker in relation to the NDLB with an employee under an ordinary contract of service. There were also unhelpful cases of

Gibb v United Steel Companies Ltd12 and Powell v Docks Inland Waterways Executive.13 Both these latter cases involved accidents and are perhaps distinguishable from the instant case. The case ofVinewas an employment case and the comments of Lord Keith were obiter.

Our alternative submission was that if the Board did not owe a duty of care as employer up to the point of allocation and in particular in making the allocation then the Board nonetheless owed a duty analogous to an employer. We relied upon the cases ofDonoghue v Stevenson14 andCaparo Industries v Dickman.15 The relevant tests of proximity, foreseeability and fair, just and reasonable are set out in the case ofMark Rich & Co v Bishop Rock Ltd.16

In the High Court Silber J. established several distinctive features of the scheme which remained unchallenged by the defendants in the Court of Appeal. This included the obligation of the Board to investigate whether the registered port employers had made satisfactory provision for training and welfare and, if not, to make such a provision itself. It was also obliged to supply men accustomed to the registered port employer and his operation and cargoes and therefore how to make itself sufficiently aware of those operations of cargoes to fulfil that obligation. There was also the registered dock workers obligation to accept any employment for which the board considered him suitable, refusal of which could result in the loss of pay, discipline or dismissal. This of course was at the discretion of the Board.

Silber J. concluded that the effect of the provisions in the regulations was that the dock worker was unable to protect his own interests because he was obliged to do such work for which he was considered by the board suitable and if he did not comply with its instructions he was liable to the possible loss of his livelihood. He noted the comment made by Gaudron J. in the Crimmins case where under the equivalent Australian scheme ‘‘the casual nature of his employment precluded the development of any longstanding employer/employee relationship in which he might usefully seek to secure his own health and welfare’’17(see the earlier comments concerning the nature of some of the registered employers). It is important also to note that the work carried out by the dock worker for a registered employer might be for as little as a half a day, a day, or perhaps a week at most. The dock worker not only could not refuse to do the work to which he was allocated but was not in a position to make enquiries about the cargo being unloaded. On the other hand, the local board was obliged to supply men accustomed to employers operations in its cargo which was of benefit to that registered employer. This required the Board to ascertain if the dock worker was suitable for handling the particular cargo which in turn meant that investigations had to be carried out by the Board into the nature of cargoes. It will of course be noted that the Board consisted of

11Vine v NDLB(1957) A.C. 498.

12Gibb v United Steel Companies Ltd[1957] 2 All E.R. 110. 13Powell v Docks Inland Waterways Executive(1949). 14Donoghue v Stevenson(1932) A.C. 562. 15Caparo Industries v Dickman(1990) 2 A.C. 605. 16Mark Rich & Co v Bishop Rock Ltd(1996) A.C. 211.

17Winifred Rice v (1) Secretary of State for Trade and Industry (2) Stuntbrand Ltd, Robert Thompson v (1) Secretary of State for

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employers and employees as mentioned earlier. There was also the duty to provide ‘‘training and welfare of dock workers’’ in the absence of such training and welfare being provided by the registered employer. This too required the Board to carry out inquiries to ascertain what steps were being taken by the registered employer and, if no steps had been taken, to make provision themselves. As a consequence they would have been aware of the working conditions of the claimants and the cargoes which they had to unload. The enquiries did not necessarily involve the inspection of the cargos. The judge was careful to add that the existence of the above duties did not themselves mean that there was a duty of care owed to the claimant as there were still the questions of proximity and whether it was fair, just and reasonable to impose such a duty.

The claimants case was that they had an enduring relationship with the NDLB broken by many short periods of employment with many registered port employers for a day or days at a time in circumstances where they were dependant upon the Board to exercise its powers and authority to protect their safety and health where they were unable to do so themselves. Silber J. was not attracted by our submissions with regard to the relationship of employer/employee between the Board and the claimants but found for us on the neighbour principle as set out clearly in the case of Donoghue. The judge had to consider the tests of proximity, reasonable foreseeability and whether it was fair, just and reasonable. The issue of proximity and the extent of the defendants’ measure of control and responsibility for a potentially dangerous situation was considered in Sutradhar v Natural Environment Research Counsel.18Here we relied upon the control and responsibility in the Board’s allocation of its employees and the dock workers vulnerability. There was support for this in the comments of the judges in the Australian case of Crimmins19. Silber J. also noted that ‘‘in order to determine if there is proximity, it is critical if not crucial to show that the persons to whom the duty is alleged to be owed falls within an identifiable or ascertainable group of people’’.20 In this instance he had no hesitation in finding here that there was such an identifiable and ascertainable group. All dock workers had to be registered and the numbers were finite. A point addressed by the Court of Appeal itself.

The defendants conceded the issue of reasonable foreseeability in the appeal. The judge at first instance had no hesitation in accepting that in the circumstances it was ‘‘fair, just and reasonable’’21to find that the defendants did have a duty to the claimants. He went on to list some of the actions which the defendants could have taken. He considered that they could have requested that the port employers provide masks and respiratory equipment, extraction plant or equipment, made arrangements to dampen the asbestos during handling, or required asbestos to be transported in sealed pallets or impermeable packaging. They could have also warned the port employers of the risks of exposing their employees to asbestos and warned the registered dock workers themselves and/or trained them in how to avoid and minimise such risks. They could have also informed dock workers and employers that workers would not be disciplined for refusing to unload asbestos in unsafe conditions.

The defendant’s grounds of appeal were that the judge had given an unduly wide meaning to the words ‘‘training and welfare’’ in the regulation and that the Board had no relevant control of operations. They also stated that the judge had wrongly imposed a common law duty of care on a statutory body to take a positive action and that a statutory body could not be made liable for any breach of statutory duty. On the latter point the defendants relied

18Sutradhar v Natural Environment Research Counsel(2006) UKHL 33. 19See above fn.10.

20See above fn.18. at [84]. 21See above fn.18. at [92B].

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upon the following cases on the common law duty of care on the statutory bodies: East Suffolk Rivers Catchment Board v Kent;22 Stovin v Wise v Norfolk CC;23 Gorringe v Calderdale MBC;24andX (Minors) v Bedfordshire CC.25

The defendants argued that the Board was a body established by statute whose powers and duties were defined and confined by statutory provisions. There was no statutory duty to take steps to protect dock workers when working for and employed by port employers. Their statutory powers did not extend to enable them to take or require protective measures. They had a statutory duty to allocate dock workers to ships of registered port employers and no power to refuse to do so because cargos were unhealthy. They had no power to require port employers to protect their employees, that is the dock workers, and no power to remove port employers from the register if they did not protect the dock workers. In effect they had no control over the dock workers employment when they were working for a registered employer. They argued that the law should not recognise a common law duty of care within this context of a statutory structure and submitted that an omission to exercise statutory powers did not give rise to a claim in negligence. May L.J. however pointed to the obligatory terms of the regulations which created a duty not a mere power. The Board had to make ‘‘satisfactory provision for the training and welfare of dock workers including port medical services, insofar as such provision does not exist apart from the scheme’’.26 The defendants tried to argue, perhaps not surprisingly, that the word ‘‘welfare’’ was concerned more with providing canteens, social clubs and such like relying upon the distinction between ‘‘welfare’’ and ‘‘health’’ and ‘‘safety’’ in the Factories Acts. The fact that the scheme included ‘‘port medical services’’ within the scope of the welfare enabled May L.J. to go on to state:

‘‘port employers shipping asbestos, in particular Clan Line, did not make satisfactory provision for dock workers health. Accordingly the NDLB had a general statutory duty to do so which was capable of profoundly effecting the existence and scope of a common law duty of care. . .. Furthermore the NDLB had a training obligation of which it is alleged they were in breach. I would not regard the provision of training necessary to alleviate known hazards to health as a matter of policy which is not justiciable as Mr Kent (the defendants counsel) submits. The bald proposition that a body created by statute cannot be recognised as owing a common law duty of care is untenable. . .. The question depends upon the statutory framework, the relationship between the claimant and the statutory body, the kind of injury or loss for which the claimant claims damages, and whether the injury or loss was caused by a negligent act or omission by or on behalf of a statutory body.’’ He went on to say ‘‘sometimes as I think in the present case, the concurrent common law duty would not impose an additional burden, in the sense of requiring an authority to act differently from the course already required by these public law obligations’’.27 The Court of Appeal was also not attracted to the argument put forward by the claimants with regard to the relationship of employer/employee. They too referred to the fact that the relationship was not ‘‘an ordinary unvarnished relationship as between an employer and

22East Suffolk Rivers Catchment Board v Kent(1941) A.C. 74 HL. 23Stovin v Wise v Norfolk CC(1996) A.C. 923 HL.

24Gorringe v Calderdale MBC(2004) UKHL 15. 25X (Minors) v Bedfordshire CC(1995) 2 A.C. 633.

26Winifred Rice v (1) Secretary of State for Trade and Industry (2) Stuntbrand Ltd, Robert Thompson v (1) Secretary of State for

Trade and Industry (2) Stuntbrand Ltd[2007] EWCA Civ 289 at [15].

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employee. It was hybrid, but it had close affinities with such a relationship and for some purpose and for part of the time the NDLB was the employer of the dock workers’’.28 Finally, May L.J. concluded:

‘‘since the statutory duty required the NDLB to make satisfactory provision for the training and welfare, including health, insofar as this did not exist apart from the scheme, the NDLB had a clear and explicit obligation to find out, insofar as they did not already know, what provision was necessary and to what extent this did not exist apart from the scheme. With Clan Line and the unloading of asbestos in Hessian sacks, there was no satisfactory provision apart from the scheme, so that the NDLB were themselves obliged to provide it as part of their relationship with the dock workers, which was akin to one of employment and in part was actual employment. The NDLB knew or ought to have known that unloading asbestos in Hessian sacks carried a serious risk of serious injury to the dock workers health, to put it no higher for the years in question. In these circumstances and on these quite startling facts, in my judgment the policy of the statute can only be seen as enabling the relationship such that the law should impose a common law duty of care. This was not a broad target power or duty directed at the public at large. It was on the facts a specific duty requiring the NDLB to protect their individual employees against a known serious risk to their health and which, in my judgment and in agreement with the judge, it is fair, just and reasonable to impose. The scope of the duty is yet to be determined. This court can at least agree that to do nothing was not on the evidence an option available to the NDLB if they were to perform a duty which in my judgment they owed to the claimants. Although the NDLB were a body created by statute to whom the principles discussed in Stovin v Wise and Gorringe applied they would in my view have undertaken an equivalent common law duty if they had been a private organisation in an equivalent relationship with the dock workers in performing an undertaking equivalent functions’’.29

The defendant’s appeal was dismissed and they were refused leave to appeal to the House or Lords. The case has been referred back to the High Court to consider the issue of whether there was a breach of the duty which can now been established.

The benefit of this case is that claimants will no longer have the problems of tracing the different employer and insurer which has been particularly important in the visible cases such as asbestosis and pleural thickening. They can pursue a claim against the Secretary of State for Trade and Industry successor in title to the National Dock Labour Board for relevant negligent exposure during their employment when registered with the board. Many cases which until now could not be pursued should, subject to the final decision on breach of duty in the High Court, be capable of being pursued.

28See above fn.26 at [44]. 29See above fn.27 at [44].

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