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Cape Asbestos Miners' Victory
Cape Judgement Text

Links to Press Coverage

 

Cape Asbestos Miners' Victory

 

 

 

Report by Greg Dropkin
Published: 02/07/00

 

Three thousand former asbestos miners and residents in South Africa's Northern Cape and Northern Province are celebrating an historic victory at Britain's highest court. By a unanimous 5-0 verdict, the Law Lords dismissed the attempt by UK multinational Cape plc, whose lawyers also act for Rio Tinto over Namibian uranium cancer claims, to shift the trial from England to South Africa.

 

 

 

The South African National Union of Mineworkers have called a press conference this afternoon.

 

Northern Cape and Northern Province community representatives are ecstatic. Asbestos claimant Audrey van Schalkwyk whooped for joy when she heard the news, but immediately asked when Cape would come to trial. She is determined to fight on until compensation is paid out.

 

Audrey's father died from mine dust exposure in Prieska, and her mother and 3 children were also affected. When she was 12, Audrey helped out at the Koegas mine. She later worked in local hospitals and saw asbestos victims pass through to the mortuary. Thousands of workers developed asbestosis and the rare cancer, mesothelioma. None have been compensated by Cape.

 

Northern Cape Provincial MP Thabo Macweya declared "we can't allow multinational companies to get away with murder. We will explore options with ACTSA (formerly the Anti-Apartheid Movement) and solicitors to ensure that Cape actually pay for what has happened. We as a government will do everything in our power to walk that extra mile with the communities."

 

Campaigner Aditi Sharma stated "ACTSA are delighted. We see this as vindication after 3 years of legal wrangling. We will now begin the battle for compensation itself, and will continue to pressure shareholders, consumers, and clients so that Cape delivers compensation as speedily as possible."

 

Today's verdict upheld the Law Lords' groundbreaking 1997 decision to allow former Rossing Uranium engineer and throat cancer patient Eddie Connelly to pursue his case in England because funding was not available for a trial in Namibia.

 

Likewise there was no funding for asbestos victims to pursue their claims in the South African courts, the Law Lords ruled. They noted that Cape had offered the Centre for Applied Legal Studies, in Johannesburg, R2.5 million to fund the case against itself! There is also no precedent for a group action (involving thousands of claims) in South Africa, but the procedure is well established in England.

 

Solicitor Richard Meeran called the decision "a victory for justice (which) has signalled a new era both in terms of the legal accountability of multinationals and the protection of human rights by the English courts. I hope Cape will now settle the claims as quickly as possible".

 

 

 

 

 


HOUSE OF LORDS

Lord Bingham of Cornhill Lord Steyn Lord Hoffmann Lord Hope of Craighead Lord Hobhouse of Woodborough

OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT

IN THE CAUSE

SCHALK WILLEM BURGER LUBBE
(SUING AS ADMINISTRATOR OF THE ESTATE OF RACHEL JACOBA LUBBE)
AND 4 OTHERS
(APPELLANTS)

AND

CAPE PLC
(RESPONDENT)
AND RELATED APPEALS

ON 20 JULY 2000

LORD BINGHAM OF CORNHILL

My Lords,

The central issue between the plaintiffs and the defendant in these interlocutory appeals is whether proceedings brought by the plaintiffs against the defendant should be tried in this country or in South Africa.

There are at present over 3,000 plaintiffs. Each of them claims damages in one of the 11 writs issued against the defendant between February 1997 and July 1999. All the plaintiffs claim damages for personal injuries (and in some cases death) allegedly suffered as the result of exposure to asbestos and its related products in South Africa. In some cases the exposure is said to have occurred in the course of the plaintiff's employment, in others as a result of living in a contaminated area. The exposure is said to have taken place in different places in South Africa and over varying, but sometimes lengthy, periods of time, ending for claim purposes in 1979. One of the plaintiffs (Mrs. Pauline Nel, suing as personal representative of her deceased husband) is a British citizen resident in England. All the others are South African citizens resident in South Africa. Most of the plaintiffs are black and of modest means. Instructions to sue have been given to English solicitors by more than 800 additional claimants.

The defendant is a public limited company. It was incorporated in England in 1893 under the name Cape Asbestos Company Limited, principally to mine and process asbestos and sell asbestos-related products. From shortly after 1893 until 1948 it operated a blue asbestos (or crocidolite) mine at Koegas and a mill at Prieska, both in the Northern Cape Province. In 1925 the defendant acquired the shares in two companies, both incorporated in 1916: these were Egnep Limited and Amosa Limited, which operated a brown asbestos mine and mill at Penge in Northern Transvaal. For practical purposes the head office of these companies was in Cape Town. In 1940 a factory was opened at Benoni, near Johannesburg, to manufacture asbestos products. It was owned by a wholly-owned subsidiary of the defendant.

In 1948 the corporate structure of the defendant's group was changed. The mine at Koegas and the mill at Prieska were transferred to a newly-formed South African company, Cape Blue Mines (Pty.) Limited. The shares in Cape Blue Mines, Egnep and Amosa were transferred to a newly-formed South African holding company, Cape Asbestos South Africa (Pty.) Limited (CASAP). The offices of all these companies were in Johannesburg. All the shares in CASAP were owned by the defendant. In 1979 CASAP sold its shares in Cape Blue Mines, Egnep and Amosa to an unrelated third party buyer, which shortly thereafter sold them on. The defendant continued to hold an interest in the South African companies which operated out of the factory at Benoni until 1989 (although the factory had been closed earlier). Since then the defendant has had no presence anywhere in South Africa, and when the first of the writs in the current proceedings was served the defendant had no assets in South Africa.

Although originating in South Africa, the defendant's asbestos-related business has not been confined to that country. From 1899 the defendant operated a number of factories in England engaged in processing asbestos and manufacturing asbestos products. A factory at Barking was run by the defendant from 1913 until 1962, and then by a wholly-owned subsidiary until the factory was closed in 1968. Another subsidiary, incorporated in Italy, operated a factory in Turin which made asbestos products from 1911 until 1968, with an intermission during the war years.

Some of the claims made in these actions date back to times when the defendant was itself operating in Northern Cape Province. But the central thrust of the claims made by each of the plaintiffs is not against the defendant as the employer of that plaintiff or as the occupier of the factory where that plaintiff worked, or as the immediate source of the contamination in the area where that plaintiff lived. Rather, the claim is made against the defendant as a parent company which, knowing (so it is said) that exposure to asbestos was gravely injurious to health, failed to take proper steps to ensure that proper working practices were followed and proper safety precautions observed throughout the group. In this way, it is alleged, the defendant breached a duty of care which it owed to those working for its subsidiaries or living in the area of their operations (with the result that the plaintiffs thereby suffered personal injury and loss). Some 360 claims are made by personal representatives of deceased victims. As reformulated during the first Court of Appeal hearing the main issue raised by the plaintiffs' claim was put in this way:

"Whether a parent company which is proved to exercise de facto control over the operations of a (foreign) subsidiary and which knows, through its directors, that those operations involve risks to the health of workers employed by the subsidiary and/or persons in the vicinity of its factory or other business premises, owes a duty of care to those workers and/or other persons in relation to the control which it exercises over and the advice which it gives to the subsidiary company?"

The first of the writs in these proceedings was issued by Mrs. Lubbe and four other plaintiffs on 14 February 1997 (and when she died the action was continued by Mr. Lubbe as her personal representative). The defendant promptly applied to stay the proceedings on the ground of forum non conveniens. This application came before Mr. Michel Kallipetis Q.C. sitting as a deputy judge of the Queen's Bench Division, who acceded to it. He sought to apply the principles authoritatively laid down by this House in Spiliada Maritime Corporation v. Cansulex Ltd. [1987] A.C. 460, and for reasons given in a lengthy and careful judgment dated 12 January 1998 he concluded that everything pointed towards South Africa as the natural forum for the trial of the action and that there was no pressing circumstance which would justify him in deciding that the interests of justice required a trial in this country instead of the natural forum in South Africa.

The plaintiffs appealed and on 30 July 1998 the Court of Appeal (Evans, Millett and Auld L.JJ.) allowed the appeal: [1998] C.L.C. 1559. Like the judge, the Court of Appeal also sought to apply the principles in Spiliada. But it reached a different conclusion, holding that the judge had failed to give weight to the fact that the negligence alleged was against the defendant company as opposed to those persons or companies responsible for running its South African businesses from time to time, and that the judge had failed to take account of the fact that the South African forum had been unavailable to the plaintiffs until the defendant offered undertakings during the hearing before the judge, the availability of the South African forum being conditional upon those undertakings being fulfilled (at page 1573). Taking those matters into account, the Court of Appeal ("the first Court of Appeal") held that the defendant did not show that South Africa was clearly and distinctly the more appropriate forum. In fairness to the judge it should be observed that the second of these points was not raised before him (it was indeed raised by the first Court of Appeal itself) and he could not therefore be reproached for failing to take it into account.

At that stage, therefore, the plaintiffs were at liberty to pursue their action in England. Before either of these decisions the sole plaintiff resident in England (Mrs. Nel) had also issued proceedings as personal representative of her husband, joining no other plaintiff. The defendant sought to challenge the decision of the first Court of Appeal but leave to do so was refused by that court and, following an oral hearing, by your Lordships' House on 14 December 1998.

After the refusal of leave by your Lordships in December 1998, writs were issued by all the remaining plaintiffs in these proceedings. It is unnecessary to summarise the detailed procedural steps which followed. It is enough to note that the defendant applied to stay all the actions, including the Lubbe action, on grounds of forum non conveniens and abuse of process, and directions were given to consolidate the various proceedings (without prejudice to the position of the Lubbe plaintiffs) into a group action.

The defendant's summons to stay came before Buckley J. who heard detailed submissions and considered copious documentary material. He gave a full judgment in writing on 30 July 1999: [2000] 1 Lloyd's Rep. 139 at 141. He concluded that South Africa was clearly and distinctly the more appropriate forum for trial of this group action and that there were no sufficient reasons for nevertheless refusing a stay (page 151). In reaching this last opinion he considered and discounted a number of objections raised by the plaintiffs, including the alleged unavailability of legal aid in South Africa. Of that submission he said (page 150):

"In all the circumstances, I cannot find that legal aid would not be granted, if applied for in South Africa. I readily accept there may be difficulties and some delay but that, at least in part, must flow from the claimants' decision not to apply for legal aid in South Africa and to issue proceedings here, when, as [the plaintiffs' solicitor] well knew, the defendant would contest jurisdiction."

The judge accordingly ordered a stay of proceedings. He considered an argument advanced by the defendant that the proceedings were an abuse. The basis of this argument was that the solicitors representing the Lubbe plaintiffs had misled the first Court of Appeal and the House of Lords by failing to disclose their intention, if jurisdiction in England was established in the Lubbe case, to launch a multi-plaintiff group action, and also that the bringing of a group action was oppressive and an abuse. The judge expressed criticism of the solicitors representing the Lubbe plaintiffs but stopped short of finding abuse of the process (page 154). The judge also considered an argument, advanced by the defendant, suggesting that there were public interest grounds for concluding that the proceedings should be tried in South Africa: the judge reached his decision independently of this argument (page 154), but considered that it reinforced his decision. He gave both sides leave to appeal.

Thus the matter came before the Court of Appeal (Pill, Aldous and Tuckey L.JJ., "the second Court of Appeal") again, and in judgments given on 29 November 1999 ([2000] 1 Lloyd's Rep. 139) the appeals were dismissed. Pill L.J. described the factors pointing towards South Africa as the more appropriate forum as "overwhelming" (page 160). The action had the most real and substantial connection with South Africa and considerations of expense and convenience pointed strongly in that direction (page 161). The public interest considerations supported that conclusion (pages 161-2). He was not persuaded by the argument that the South African High Court would be unable to handle these actions (page 162), and with reference to legal representation he said (at page 164):

"I have already referred to the high repute in which the South African courts are held. There is also in South Africa a legal profession with high standards and a tradition of public service, though I do not suggest that lawyers in South Africa, any more than those anywhere else, can be expected to act on a large scale without prospects of remuneration. While I would not be prepared to apply the second stage of the Spiliada test, so as to permit English litigation, even in the absence of evidence that legal representation will be available, I am unable to conclude that in the circumstances it would not become available for claims in South African courts. Moreover, given the accessibility to the wealth of scientific, technical and medical evidence available in this context, I am confident that it could be made available in a South African court, to the extent required to achieve a proper consideration of the plaintiffs' cases. The action would by no means be novel or speculative."

Pill L.J. was not prepared to strike out the proceedings as an abuse of process (page 164-5). He recorded that the plaintiffs had not pursued their contention that Article 2 of the Brussels Convention deprived the English court of any discretion to stay an action brought against a defendant domiciled here, since they did not wish the proceedings to be delayed while a reference was made to the European Court of Justice (pages 164-5). He considered that the bringing of the multi-plaintiff group action entitled the Court of Appeal to reconsider the decision of the first Court of Appeal in the Lubbe action and to reach a different conclusion (page 165). He dismissed the appeal.

Aldous L.J. agreed, while recording earlier reservations about the availability of legal representation (page 166). He also expressed strong cricitism of the solicitors representing the Lubbe plaintiffs but agreed with Pill L.J. that what had happened did not mean that there was an abuse of process such that the group action and the Lubbe action should be stayed (page 167). Tuckey L.J. also agreed: he deprecated the acrimony caused by the Lubbe solicitors' failure to inform the Court of Appeal and the House of Lords of the plan to launch a group action (page 168) and attached less weight than the first Court of Appeal had done to the fact that the South African forum had only become available because of the defendant's undertaking to submit (page 168). The second Court of Appeal refused leave to appeal, but leave was given by your Lordships to the plaintiffs on 7 February 2000. On 30 March 2000 your Lordships also vacated the earlier order refusing leave to appeal in the Lubbe action and gave leave to the defendant to challenge the decision of the first Court of Appeal.

Reference should be made, finally, to an action which is not directly involved in these proceedings. On 3 October 1997 proceedings were issued by Vincenzina Gisondi and three other plaintiffs against the defendant making claims on grounds similar to those relied on by the plaintiffs in the proceedings before the House. The significant difference is that these plaintiffs complain of exposure to asbestos and asbestos products not in South Africa but in Italy. Thus the plaintiffs are resident in a state which is a party to the Brussels Convention and sue a defendant domiciled in England, another contracting state. It has not been suggested that the English court could under the Convention decline jurisdiction in favour of an Italian forum, and no application for a stay has been made by the defendant in that case. There appears to be no jurisdictional objection to the prosecution of that action here, and no application has been made to strike out the claim as disclosing no cause of action.

The applicable principles

Where a plaintiff sues a defendant as of right in the English court and the defendant applies to stay the proceedings on grounds of forum non conveniens, the principles to be applied by the English court in deciding that application in any case not governed by Article 2 of the Brussels Convention are not in doubt. They derive from the judgment of Lord Kinnear in Sim v. Robinow (1892) 19 R. 665 at 668 where he said:

"the plea can never be sustained unless the court is satisfied that there is some other tribunal, having competent jurisdiction, in which the case may be tried more suitably for the interests of all the parties and for the ends of justice."

Thus it is the interest of all the parties, not those of the plaintiff only or the defendant only, and the ends of justice as judged by the court on all the facts of the case before it, which must control the decision of the court. In Spiliada it was stated (at page 476):

"The basic principle is that a stay will only be granted on the ground of forum non conveniens where the court is satisfied that there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action, i.e. in which the case may be tried more suitably for the interests of all the parties and the ends of justice."

In applying this principle the court's first task is to consider whether the defendant who seeks a stay is able to discharge the burden resting upon him not just to show that England is not the natural or appropriate forum for the trial but to establish that there is another available forum which is clearly or distinctly more appropriate than the English forum. In this way, proper regard is had to the fact that jurisdiction has been founded in England as of right (Spiliada, page 477). At this first stage of the inquiry the court will consider what factors there are which point in the direction of another forum (Spiliada, page 477; Connelly v. R.T.Z. Corporation Plc. [1998] A.C. 854 at 871). If the court concludes at that stage that there is no other available forum which is clearly more appropriate for the trial of the action, that is likely to be the end of the matter. But if the court concludes at that stage that there is some other available forum which prima facie is more appropriate for the trial of the action it will ordinarily grant a stay unless the plaintiff can show that there are circumstances by reason of which justice requires that a stay should nevertheless not be granted. In this second stage the court will concentrate its attention not only on factors connecting the proceedings with the foreign or the English forum (Spiliada, page 478; Connelly, page 872) but on whether the plaintiff will obtain justice in the foreign jurisdiction. The plaintiff will not ordinarily discharge the burden lying upon him by showing that he will enjoy procedural advantages, or a higher scale of damages or more generous rules of limitation if he sues in England; generally speaking, the plaintiff must take a foreign forum as he finds it, even if it is in some respects less advantageous to him than the English forum (Spiliada, page 482; Connelly, page 872). It is only if the plaintiff can establish that substantial justice will not be done in the appropriate forum that a stay will be refused (Spiliada, page 482; Connelly, page 873).

This is not an easy condition for a plaintiff to satisfy, and it is not necessarily enough to show that legal aid is available in this country but not in the more appropriate foreign forum. Lord Goff of Chieveley said in Connelly (at page 873):

"I therefore start from the position that, at least as a general rule, the court will not refuse to grant a stay simply because the plaintiff has shown that no financial assistance, for example in the form of legal aid, will be available to him in the appropriate forum, whereas such financial assistance will be available to him in England. Many smaller jurisdictions cannot afford a system of legal aid. Suppose that the plaintiff has been injured in a motor accident in such a country, and succeeds in establishing English jurisdiction on the defendant by service on him in this country where the plaintiff is eligible for legal aid, I cannot think that the absence of legal aid in the appropriate jurisdiction would in itself justify the refusal of a stay on the ground of forum non conveniens. In this connection it should not be forgotten that financial assistance for litigation is not necessarily regarded as essential, even in sophisticated legal systems. It was not widely available in this country until 1949; and even since that date it has been only available for persons with limited means. People above that limit may well lack the means to litigate, which provides one reason for the recent legalisation of conditional fee agreements.

Even so, the availability of financial assistance in this country, coupled with its non-availability in the appropriate forum, may exceptionally be a relevant factor in this context. The question, however, remains whether the plaintiff can establish that substantial justice will not in the particular circumstances of the case be done if the plaintiff has to proceed in the appropriate forum where no financial assistance is available."

In Connelly a majority of the House held that the case before it was such an exceptional case. The nature and complexity of the case were such that it could not be tried at all without the benefit of legal representation and expert scientific assistance, available in this country but not in the more appropriate forum, Namibia. That being so, the majority of the House concluded that the Namibian forum was not one in which the case could be tried more suitably for the interests of all the parties and for the ends of justice.

The present cases

The issues in the present cases fall into two segments. The first segment concerns the responsibility of the defendant as a parent company for ensuring the observance of proper standards of health and safety by its overseas subsidiaries. Resolution of this issue will be likely to involve an inquiry into what part the defendant played in controlling the operations of the group, what its directors and employees knew or ought to have known, what action was taken and not taken, whether the defendant owed a duty of care to employees of group companies overseas and whether, if so, that duty was broken. Much of the evidence material to this inquiry would, in the ordinary way, be documentary and much of it would be found in the offices of the parent company, including minutes of meetings, reports by directors and employees on visits overseas and correspondence.

The second segment of the cases involves the personal injury issues relevant to each individual: diagnosis, prognosis, causation (including the contribution made to a plaintiff's condition by any sources of contamination for which the defendant was not responsible) and special damage. Investigation of these issues would necessarily involve the evidence and medical examination of each plaintiff and an inquiry into the conditions in which that plaintiff worked or lived and the period for which he did so. Where the claim is made on behalf of a deceased person the inquiry would be essentially the same, although probably more difficult.

In his review of the Lubbe case, which was alone before him, Mr. Kallipetis considered that the convenience of trying the personal injury issues in South Africa outweighed any benefit there might be in trying the parent company responsibility issue here. That was in my opinion a tenable though not an inevitable conclusion on the case as then presented. The two reasons given by the first Court of Appeal for disturbing that exercise of judgment are not to my mind convincing. Mr. Kallipetis' judgment does not suggest that he overlooked the way in which the plaintiffs put their case, although he did not express it very clearly (perhaps because the pleading was not very clear). The first Court of Appeal thought it undermined the defendant's application for a stay that the South African forum only became available as a result of the defendant's undertaking to submit, but for reasons given by my noble and learned friend Lord Hope of Craighead (with which I fully agree) this was not a factor which should have weighed in the balance either way. I would not accept the argument advanced by the plaintiffs on this point. I question whether the first Court of Appeal was justified in disturbing Mr. Kallipetis' conclusion and substituting its own. But its own assessment of the balance between the parent company responsibility issue and the personal injury issues is not shown to be unreasonable or wrong. On the case as then presented there was room for the view that South Africa was not shown to be a clearly more appropriate forum. This is a field in which differing conclusions can be reached by different tribunals without either being susceptible to legal challenge. The jurisdiction to stay is liable to be perverted if parties litigate the issue at different levels of the judicial hierarchy in the hope of persuading a higher court to strike a different balance in the factors pointing for and against a foreign forum.

The emergence of over 3,000 new plaintiffs following the decision of the first Court of Appeal had an obvious and significant effect on the balance of the proceedings. While the parent company responsibility issue remained very much what it had always been, the personal injury issues assumed very much greater significance. To investigate, prepare and resolve these issues, in relation to each of the plaintiffs, would plainly involve a careful, detailed and cumbersome factual inquiry and, at least potentially, a very large body of expert evidence. In this changed situation Buckley J., applying the first stage of the Spiliada test, regarded South Africa as clearly the more appropriate forum for trial of the group action and the second Court of Appeal agreed. Both courts were in my view plainly correct. The enhanced significance of the personal injury issues tipped the balance very clearly in favour of South Africa at the first stage of the Spiliada exercise, and no effective criticism has been made of that conclusion. The brunt of the plaintiffs' argument on these appeals to the House has been directed not against the decisions of Buckley J. and the second Court of Appeal on the first stage of the Spiliada test but against their conclusion that the plaintiffs had not shown that substantial justice would not be done in the more appropriate South African forum.

Funding

The plaintiffs submitted that legal aid in South Africa had been withdrawn for personal injury claims, that there was no reasonable likelihood of any lawyer or group of lawyers being able or willing to fund proceedings of this weight and complexity under the contingency fee arrangements permitted in South Africa since April 1999 and that there was no other available source of funding open to the plaintiffs. These were, they argued, proceedings which could not be effectively prosecuted without legal representation and adequate funding. To stay proceedings in England, where legal representation and adequate funding are available, in favour of the South African forum where they are not would accordingly deny the plaintiffs any realistic prospect of pursuing their claims to trial.

The defendant roundly challenged these assertions. Reliance was placed on the facts that the plaintiffs had not applied for legal aid in South Africa before its withdrawal and had made no determined effort to obtain funding in South Africa. Even if legal aid was no longer available in South Africa, contingency fee agreements were now permissible and it was unrealistic to suppose that South African counsel and attorneys would be any less ready to act than English counsel and solicitors if the claims were judged to have a reasonable prospect of success. If contingency fee arrangements could not be made in South Africa because South African counsel and attorneys did not judge the claims to have a reasonable prospect of success, that did not involve a denial of justice to the plaintiffs. In any event there were other potential sources of assistance available to the plaintiffs in South Africa.


Links to Press Coverage

Cape Asbestos Miners' Victory
Report by Greg Dropkin
Published: 20/07/00
http://www.labournet.net/world/0007/cape1.html

Cape Campaigners in London Photo
Report by Mick Holder, NUJ London Hazards Centre
Published: 14/07/00
http://www.labournet.net/images/cape/london/capelon1.htm

Cape Dust Forgotten
South African asbestos victims demand justice
photographs by Hein du Plessis
http://www.labournet.net/images/cape/layout4.htm

 


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