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Case Study

Court of Appeal overturns 'manifestly unjust' nil award for successful businessman with mesothelioma

The Court of Appeal has overturned a High Court ruling from 2019 that businessman Mike Head could not recover any loss of earnings following his diagnosis of mesothelioma simply because the successful family business he founded and ran would continue after his death.

The ruling in Head v Culver Heating Ltd comes after Mike's lawyers, Counsel Harry Steinberg QC and Kate Boakes of 12 Kings Bench Walk instructed by Peter Williams of Fieldfisher, successfully challenged an initial refusal by the Court of Appeal to hear the case.

Mike was founder and managing director of a highly successful and profitable heating and ventilation company. He contracted the asbestos cancer, mesothelioma, in 2018 at the relatively young age of 59, and was recommended to Fieldfisher by asbestos charity HASAG. Fieldfisher conducted his case on a "hurry up" basis using the mesothelioma fast track in the High Court. The case proceeded against his former employers – Culver Heating Ltd - who exposed him to asbestos. Liability was admitted at the first hearing in April 2019 and it was argued that owing to his short life expectancy, Mike had lost more than £4m of income during the years he was deprived of.

In her surprising judgment, Her Honour Justice Melissa Clarke ruled that Mike had suffered no loss of earnings at all because the business was so successful, the income stream to Mike's family would continue after his death.  He was awarded only £175,000 in damages for other items, but no loss of earnings.

Fieldfisher sought permission to appeal arguing the Judgment was clearly wrong. Loss of earnings are a personal rather than a business loss. It made no difference whether the business would continue in some form, Mike had still lost out on future earnings and someone of similar standing would need replace him and be remunerated.

The argument pleaded by the Defence and accepted by the Judge that his earnings were somehow "capital" rather than income and could be given away in his will was fanciful.  Despite this, permission to appeal was refused by HHJ Clarke and again in writing by the Court of Appeal which stated that refusal of such permission was "final".

Refusing to be dissuaded, and confident that this was wrong in law, we used a rarely used exception under the Civil Procedure Rules arguing that the Appeal should  be re-opened because of "manifest injustice". The overwhelming majority of such applications fail, but this one was granted.

Lord Justice Bean issued the main Judgment in the Court of Appeal with Lord Justice Males and Lady Justice Andrews in agreement.  Of the Claimant's application, Lord Justice Bean said:

"The overwhelming majority of these applications are entirely unfounded but this one was a rare exception perhaps the most striking one I have seen during six years' service in this Court…  I consider it was indeed necessary to reopen the determination of this appeal in order to avoid real injustice."

Lord Justice Bean then overturned the earlier nil loss of earnings ruling. He agreed with the Claimant's original case that since Mike was the driving force behind the company and the profits he generated were a product of his own labour, rather than the result of ongoing passive investment, Mike was entitled to full loss of earnings in the lost years regardless of whether his  company continued to generate profit after his death. He could not bequeath his shareholdings in the company in his will because they related to his own future earning capacity. The loss was therefore personal.

The case will be readmitted to the High Court for re-evaluation of loss of earnings which will likely result in a high award for the family.

Tragically, Mike died before the appeal was heard and will never know that the original ruling was overturned and that his family will be well provided for.

Peter Williams, Head of Fieldfisher's Asbestos Claims, acting for Mike's wife Debbie, said: "The original High Court Judgment was devastating for Mike and his family. Our view was that the Judge had made a serious mistake.  It cannot be just to award nil loss of earnings simply because somebody runs their own business which will continue without them. It was indeed, and is now proved to be, "manifestly unjust". Mike's life and work were hugely valuable to his family and the Judgment finally confirms this.

"We had to use a very rare exception in the court rules to finally bring this to appeal. It is devastating that the original ruling meant Mike didn't live to see justice served."

You can read the Judgment here.
 

HASAG

HASAG asbestos disease support provides free support guidance and information to people with asbestos diseases throughout London and the South.

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