Dust disease claims: how to protect your company from the rise in awarded damages

The case of Shaw v BHP Billiton Ltd¹ served to further consolidate the landmark decision of BHP Billiton Limited v Parker² by awarding exemplary damages against an employer. This case serves to warn companies about the recent increase in both litigation and damages awarded against employers in dust disease cases.

WHAT WAS THE ACTION?

The case involved a claim made by a former employee (Mr King) against his employer (BHP Billiton).

Mr King was born in England in 1936. He migrated to Australia in 1967 and commenced work as a fitter at the Whyalla Shipbuilding and Engineering Works (the Whyalla shipyard). Mr King worked at the Whyalla shipyard between June 1967 and September 1972.

While employed at the Whyalla shipyards, Mr King was exposed to asbestos used in ship building. He was diagnosed with pleural plaques in 1996, asbestosis in 2002 and lung cancer in 2007. Mr King died on 18 July 2007.

Mr King initiated proceedings in the Dust Diseases Tribunal of New South Wales against BHP and two companies who supplied and installed asbestos products at the Whyalla shipyards. His action against the second and third defendants was settled.

Following Mr King’s death, his daughter Ms Shaw as joint executor and trustee of his estate was substituted as the plaintiff. The action was brought by the estate for damages including exemplary damages.

WHAT WAS CLAIMED?

Ms Shaw alleged that BHPA had been negligent, in breach of its statutory duty, and in breach of its contract of employment with Mr King. It was alleged that the employment contract had an implied term that BHP would exercise reasonable care for Mr King’s safety.

A claim for exemplary damages was made on the basis that:

• Mr King was exposed to asbestos while employed by BHP;
• BHP knew that Mr King (or the class of people to which he belonged) were at risk of exposure to asbestos;
• BHP’s foreman and supervisor directed Mr King to work with such materials or in the vicinity of those materials;
• BHP had actual knowledge that exposure to asbestos could result in dust disease.

WAS MR KING EXPOSED TO ASBESTOS?

Witness evidence was produced by the plaintiff as to the use of asbestos in the engine rooms at Whyalla shipyards. The court concluded that Mr King was exposed to several potential sources of asbestos while working at Whayalla shipyards.

DID MR KING SUFFER FROM A DUST DISEASE?

Mr King’s medical records for the period of 1996 to 2003 showed the development of pleural plaques and pleural disease. In 2002, Mr King’s treating physician diagnosed him with asbestosis (an opinion shared by several medical experts who reviewed his file). The court agreed that Mr King suffered from a dust disease.

WAS MR KING’S DISEASE FORESEEABLE?

A defendant may be found negligent when it owes a duty of care to a plaintiff, breaches that duty and as a result causes injury to the plaintiff. The court considered whether a reasonable person would have foreseen that the conduct could involve a risk of injury and if so, what a reasonable person would do in response to that risk. The court concluded that the risk was foreseeable.

DID BHP BREACH ITS DUTY OF CARE TO MR KING?

The court noted that Mr King’s work was carried out in a dusty environment and BHP did not conduct any testing to determine the level of his exposure to asbestos. Further, when Mr King commenced employment with BHP, the company was aware of the risks associated with asbestos exposure.

In 1968, Dr Wilson attended at BHP and made several recommendations including the installation of dust filters, providing respirators to employees and cleaning asbestos debris with a vacuum cleaner at frequent intervals. BHP did not adopt any of these recommendations. The court concluded that BHP failed to take practical measures to protect its employees and as a result, breached its duty to Mr King. The court found BHP to be negligent.

DID BHP BREACH ITS STATUTORY DUTY?

The court found that BHP did breach its statutory duty by failing to install exhaust ventilation and later, by failing to install mechanical ventilation.

DID BHP BREACH ITS CONTRACT WITH MR KING?

The court found that the plaintiff had established breach of contract, by virtue of the finding of negligence and breach of statutory duty.

WAS MR KING’S LUNG CANCER ASBESTOS-RELATED?

Mr King was a heavy smoker for a significant period of his life. The court was not satisfied that the plaintiff had established that exposure to asbestos was the material cause of the development of Mr King’s lung cancer.

WERE EXEMPLARY DAMAGES AWARDED?

The court considered a “two prong” approach being the state of knowledge at the time as to the risks associated with exposure to asbestos and BHP’s actual knowledge at the time Mr King was employed. The court awarded the sum of $20,000 for exemplary damages but indicated that this sum had been constrained by BHP v Parker.

WAS CONSIDERATION GIVEN TO MR KING’S EXPOSURE TO ASBESTOS IN ENGLAND?

The court noted that it has been established that asbestos-related disease is divisible. The court gave consideration to Mr King’s exposure to asbestos dust while working in England in calculating their assessment of damages.

WHAT WAS THE OUTCOME?

The plaintiff was awarded $63,060.00 in damages including exemplary damages.

WHAT IS THE TAKE HOME MESSAGE?

Companies with employees that are regularly exposed to asbestos dust should:

• Keep up to date with recent research including recommended measures;
• Take practical steps to protect their employees and their families from asbestos exposure including ensuring work areas are well ventilated;
• Educate employees of the risks associated with asbestos exposure;
• Provide facilities for removal of asbestos to prevent dust disease claims by family members;
• If concerned, seek independent advice for recommendations to limit exposure.