McDonald v National Grid Electricity Transmission Plc [2014] UKSC 53

Percy McDonald was exposed to asbestos dust while visiting Battersea Power Station between 1954 and 1959 to collect pulverised fuel ash, later developing mesothelioma. The Supreme Court held, by majority, that the occupiers breached the Asbestos Industry Regulations 1931, but dismissed the section 47 Factories Act 1937 cross-appeal.

Facts

Percy McDonald was employed by the Building Research Establishment as a lorry driver between 1954 and 1959. In the course of his employment he attended Battersea Power Station, then operated by the appellant’s predecessors, to collect pulverised fuel ash. While at the station he entered areas, particularly the boiler house, where lagging operations were being carried out. This work involved mixing asbestos powder with water in drums to form a paste, sawing pre-formed asbestos sections and stripping off old lagging. Mr McDonald was diagnosed with mesothelioma in July 2012 and died in February 2014, with his widow substituted as respondent.

The trial judge (HH Judge Denyer QC) found that Mr McDonald’s exposure was “of a modest level on a limited number of occasions over a relatively short period of time” and was not thought at the time to pose any real risk to health. He dismissed all claims. The Court of Appeal allowed the appeal under the Asbestos Industry Regulations 1931 but dismissed the claims under section 47 of the Factories Act 1937 and in negligence. Both parties appealed to the Supreme Court.

Issues

The Supreme Court had to decide:

• Whether the Asbestos Industry Regulations 1931 (and particularly regulation 2(a)) applied to the mixing of asbestos-containing insulation paste by laggers at the power station, or whether they were confined to the asbestos manufacturing industry.
• Whether Mr McDonald was a person to whom the duty under the 1931 Regulations was owed, given that he was not employed by the occupier and was not engaged in the lagging process.
• Whether section 47(1) of the Factories Act 1937 applied so as to give Mr McDonald a claim, involving sub-issues as to whether lagging was a “process” carried on in the factory, whether Mr McDonald was a “person employed”, whether the quantity of dust had to be substantial at the point of generation or inhalation, and whether the evidence established a substantial quantity of dust.

Arguments

Appellant (National Grid)

The appellant argued that the 1931 Regulations applied only to the asbestos manufacturing industry, as demonstrated by their title, the terms of the Secretary of State’s certification under section 79 of the 1901 Act, the definition of asbestos in its raw mineral condition, and the qualification in paragraph (v) of the preamble. “Mixing” was said to bear a narrow technical meaning referring to preparatory processes in asbestos manufacture. Reliance was placed on the Merewether and Price Report, the Report on Conferences, a 1967 Ministry of Labour memorandum, and Parliamentary material. It was further argued that no duty was owed to Mr McDonald as a “casual visitor” or “sightseer” not employed in the process. On section 47, it was argued that the dust must be substantial at the point of inhalation.

Respondent (Mrs McDonald)

The respondent argued that the Regulations applied whenever and wherever a defined process was carried on in a factory or workshop. The preamble applied to “all factories and workshops” where listed processes took place, and the proviso would be meaningless if confined to asbestos manufacture. “Mixing” bore its ordinary meaning and included mixing asbestos powder with water for lagging. Regarding section 47, it was argued that lagging was a process, that “persons employed” included persons employed at the factory generally, and that the substantial quantity requirement was satisfied at the point the dust was given off.

Judgment

By a majority (Lord Kerr, Lady Hale and Lord Clarke; Lord Reed and Lord Neuberger dissenting), the Supreme Court dismissed the appeal. The cross-appeal was dismissed unanimously save for Lady Hale.

The 1931 Regulations

Lord Kerr held that if the Secretary of State had intended to confine the Regulations to asbestos manufacture, this could have been achieved by clear wording. Instead, the preamble made prominently clear that the Regulations applied to all factories and workshops where certain specified processes were carried out. The emphasis was on the processes, not the nature of the industry. The Merewether and Price Report, while focused on textile workers for investigative reasons, had recognised risks to workers exposed to asbestos in other industries, including insulation work. The first proviso to the preamble could not sensibly be explained if the Regulations were confined to asbestos manufacture. The Parliamentary material did not satisfy the criteria in Pepper v Hart [1993] AC 593. “Mixing” was to be given its ordinary meaning, covering the mixing of asbestos powder with water. The court approved Cherry Tree Machine Co Ltd v Dawson [2001] EWCA Civ 101.

On the scope of protected persons, following Canadian Pacific Steamships Ltd v Bryers [1958] AC 485 and Massey-Harris-Ferguson (Manufacturing) Ltd v Piper [1956] 2 QB 396, and Uddin v Associated Portland Cement Manufacturers Ltd [1965] 2 QB 582, protection was not confined to workers directly engaged in the process. The relevant test was whether the person was employed in the factory, not by the occupier, and it did not matter that he was acting outside the scope of his employment. Mr McDonald qualified.

Section 47 of the 1937 Act

Although Lord Kerr held that lagging was a “process” for section 47 purposes (disapproving Brophy v J C Bradfield & Co Ltd [1955] 1 WLR 1148), that the substantial quantity requirement referred to the point at which dust was given off rather than inhaled, and that “persons employed” was not confined to those engaged in the process (preferring the reasoning of Buxton J in Owen v IMI Yorkshire Copper Tube over that of Rose J in Morrison v CEGB), the cross-appeal failed because the trial judge had not made a finding that a substantial quantity of dust was given off, and the evidence before the Court of Appeal was insufficient to establish this. A staged approach to section 47 was required, distinguishing the qualitative first limb from the purely quantitative second limb.

Dissenting reasoning

Lord Reed (with whom Lord Neuberger agreed) considered that “mixing” in the 1931 Regulations bore a technical meaning referring to processes within the asbestos manufacturing industry, and did not extend to laggers mixing insulation paste at a power station. He also considered that Mr McDonald was not a “person employed” for the purposes of section 47, as he was working solely for the purposes of his employer, not for the purposes of the power station, applying Wigley v British Vinegars Ltd [1964] AC 307.

Implications

The decision confirms that the Asbestos Industry Regulations 1931 extended beyond factories devoted exclusively to the manufacture of asbestos products, applying wherever defined processes (including the mixing of asbestos with water) were carried on. The case approves the reasoning in Cherry Tree Machine Co Ltd v Dawson. Occupiers of factories at which lagging work was carried out during the currency of the 1931 Regulations may therefore be liable for breach of statutory duty in respect of persons exposed to asbestos dust, even those not employed by the occupier and not engaged in the process itself, provided they were employed at the factory.

On section 47 of the 1937 Act, the majority reasoning clarifies that the provision protects persons employed at the factory generally, not only those engaged in the dust-generating process, and that the substantial quantity requirement operates at the point the dust is given off. However, evidential difficulty in establishing that a substantial quantity of dust was in fact given off may defeat such claims, as occurred here.

The decision is of continuing practical importance because mesothelioma claims frequently arise decades after historic exposure. It matters particularly to claimants exposed to asbestos through incidental proximity to lagging work, to insurers of former factory occupiers, and to successor bodies (including the Government) which have inherited liabilities from nationalised industries. The court was clear that the legislation was not designed to protect against mesothelioma (which was then unknown) but must be interpreted according to ordinary principles rather than distorted to provide compensation. The dissent illustrates the genuine difficulty of the interpretive questions and the fine distinctions involved.

Verdict: Appeal by National Grid dismissed; cross-appeal by Mrs McDonald under section 47 of the Factories Act 1937 dismissed. Mr McDonald’s estate accordingly succeeded on the claim under the Asbestos Industry Regulations 1931.

Source: McDonald v National Grid Electricity Transmission Plc [2014] UKSC 53