There has been much attention of late on the cases of Anton v South Ayrshire Council and Bavaird v Sir Robert McAlpine & Others. Both cases raised the question of whether or not liability in respect of damages had transferred to a successor local authority from its statutory predecessor following a reorganisation in local government. The claims were brought on behalf of former employees, now deceased, on the basis that exposure to asbestos in the work place had given rise to mesothelioma which caused their deaths. In each case, the potentially negligent act had occurred some time ago and the focus was on whether or not liability had transferred to the reorganised local authority. It was not disputed that had the original local authorities still been in existence, they would likely have been found liable in negligence for the death of the former employees. The issue of transmission of liability in each case was determined with reference to the statutory provisions governing the creation of the new local authorities and the transfer of rights and liabilities to them. In each of the cases, the Judges reached opposite conclusions as to whether or not liability had indeed transferred.
Anton v South Ayrshire Council
An action was raised by the widow of the late John Anton. The deceased worked for Ayr County Council from 1948 to 1971 and it was alleged that he was negligently exposed to asbestos in the course of that employment. He developed mesothelioma in 2007. By this time, Ayr County Council no longer existed. Following various stages of local government reorganisation, certain liabilities of Ayr County Council had been transferred to South Ayrshire Council. The reorganisations were in terms of the Local Government (Scotland) Act 1973 S.1(5) (the "1973 Act") and subsequently the Local Authorities etc (Miscellaneous Provision) (Scotland) Order 1975 (the "1975 Order").
The decision in Anton centred on the interpretation of "liabilities" with reference to the 1975 Order. It was held that "liability" had to be given a wide interpretation which included potential liability and that 'liability' could encompass liability for an injury which had not materialised at the time of the transfer. Lady Clark further held that the purpose of the 1973 Act and the 1975 Order could not have been to relieve the new local authorities from legal liabilities incurred by their predecessors and so deprive members of the public of remedies. As such, the action was allowed to proceed against South Ayrshire Council as the successor of Ayr County Council.
Bavaird v Sir Robert McAlpine & Others
An action was raised by the relatives of the late Gordon Bavaird. They claimed that he had developed mesothelioma due to exposure to asbestos during his employment with East Kilbride Development Corporation ("EKDC"). Mr Bavaird was employed by EKDC sometime between 1971 and 1974 and had, it was alleged, been exposed to asbestos during this time. He died of mesothelioma in 2008, however showed no signs or symptoms of any asbestos related disease until approximately 2007. By this time, EKDC no longer existed.
South Lanarkshire Council is the statutory successor to the property, rights and liabilities of EKDC by virtue of the New Town (East Kilbride) (Transfer of Property, Rights and Liabilities) Order 1996 (the "1996 Order"). As in Anton, the Court had to determine whether or not there had been a “liability” which had been transferred from EKDC to South Lanarkshire Council under the 1996 Order. Could the term "liabilities" in the 1996 Order encompass liability for an injury which had not materialised at the time of the transfer?
Lord Brailsford held that there was no such liability – in the Scottish law of negligence, no liability could emerge without there being both a wrong and a resulting injury. As there was no such injury before 2007, there was no liability that could be transferred to South Lanarkshire Council in 1996. No contingent liability existed as at 1996 which was capable of being transferred by the 1996 Order. The claim against the Council was therefore dismissed.
Bavaird appeal decision offers some clarity
Bavaird was appealed. The appeal decision provides some certainty for pursuers and defenders alike who may have been unsettled by the conflicting opinions in Anton and Bavaird. This decision goes some way to address the uncertainty by bringing Bavaird in line with Anton.
The court re-examined the construction of the provisions of the transferring orders and allowed the appeal. Lady Paton took the view that the 1996 Order envisages and specifically provides for circumstances such as those arising in Mr Bavaird’s case and stated: "[c]onstruing the order as a whole, and adopting a purposive construction, it is my opinion that the word “liabilities” in the transfer order includes contingent liabilities and potential liabilities, such as liabilities which emerged after the date of transfer.”
It was held that on a proper construction of the 1996 Order, any liability arising from negligent exposure of the late Mr Bavaird to asbestos which might have been attributed to EKDC is now the liability of South Lanarkshire Council.
In light of this decision, there is now the possibility that, following a statutory transfer, a successor defender may be held liable for liabilities which were unknown or had not yet materialised at the time of transfer from the predecessor. It is worth noting that this case turned on the specific construction of the particular statutory provisions. How this decision will affect future cases remains to be seen, although it is likely that the courts will look at the specific wording of the relevant statutory provisions on a case by case basis.
That said, and in terms of wider implications, it is interesting that there was a clear reluctance by the Court to leave the pursuers with no remedy simply because the original employing entity had been dissolved and we may see other transferring provisions being interpreted in this vein in future.