Ab & Ors v Small Mines - and - UK Coal [2007] EWHC 1939 (QB)

[2007] EWHC 1939 (QB)Case No 960177 (Effect of OROS Settlement)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 13/08/2007
Before
THE HONOURABLE MRS JUSTICE SWIFT DBE
Between
AB & OthersClaimantsSmall MinesDefendantsUK CoalDefendant
Mr Ivan Bowley (instructed by Irwin Mitchell) for ClaimantsMr Timothy Smith (instructed by Halliwells) for Small MinesMr Michael Rawlinson (instructed by Halliwells) for UK CoalHearing Hearing dates: 23 July 2007
Judgment

The background

[1]The issue which I am required to determine is:
“In a co-defended claim involving the Department for Business, Enterprise and Regulatory Reform (the Department) and UK Coal and/or Small Mines, once a claimant has accepted a payment under LOROS/DOROS, is he still entitled to maintain a claim against UK Coal and/or Small Mines under the CHA pursuant to the respective terms of accession by UK Coal and Small Mines to the CHA and the terms of the CHA?”
I heard submissions in relation to this issue on Monday, 23 July 2007.[2]In 1999, following the conclusion of the successful lead actions before Sir Michael Turner (or Turner, J, as he then was), the Department (then the Department of Trade and Industry (DTI)), which had inherited the liabilities of the British Coal Corporation (BCC) on 1 January 1998, entered into an agreement (the CHA) with the Co-ordinating Group of claimants’ solicitors (the CG) for handling the outstanding claims for respiratory disease. The Department engaged contractors to process the claims in accordance with the CHA and to set up the necessary arrangements for medical assessment of the claimants. The contractors now responsible for processing claims on the Department’s behalf are Capita. The medical assessment process (MAP) is run by Atos Origin.[3]The conduct of all claims registered for the purposes of the British Coal Respiratory Disease Litigation (BCRDL) scheme is governed by the CHA. In order that the claims did not proceed other than by an agreed process, the court imposed a stay, requiring all claims to be entered on the BCRDL register and thereafter to proceed through the CHA. It was agreed between the parties that no claimant should need to seek a litigated solution until after his claim had been processed through the CHA. To this end, a disputes procedure was devised to seek to resolve potential grievances. However, it was agreed that recourse to the court, by way of seeking removal of the stay (followed by conventional unitary litigation), once the claim had been processed through the CHA, was a right that could not be removed by agreement and accordingly it is preserved by an Order made by the court in July 1999.

The involvement of UK Coal and Small Mines

[4]Some deep mines which had formerly been owned and operated by BCC were subsequently acquired by UK Coal, which inherited former members of BCC’s workforce. The defendant, ‘Small Mines’, comprises a collection of approximately 430 small mines, all of which were insured by AGF. Some underground miners worked for one or more of these mines during periods of their working lives, in between periods spent working for BCC. It is alleged that miners were exposed to dust/and or fumes whilst working for UK Coal and Small Mines in addition to those to which they were exposed whilst working for BCC.[5]Within a short time of the inception of the CHA compensation scheme, it became evident that some claimants were seeking to direct claims against UK Coal and/or Small Mines (sometimes referred to in this judgment as ‘the co-defendants’), as well as against BCC. As a result, both UK Coal and Small Mines became involved in discussions about ways in which the CHA could be adapted to accommodate the handling of claims against them so as to avoid, if possible, the need for litigation. The main issue to be determined was whether it would be possible (and, if so, how) to adapt, and apply for use in claims involving UK Coal and Small Mines, the dust model/damages calculator which had been developed by the Department and the CG. By that means, it would be possible to apportion damages between the co-defendants and BCC in accordance with their relative degrees of tortious responsibility. The resolution of this issue took some considerable time. In January 2004, there was a mediation between Small Mines and the Department. Agreement between them was reached shortly after the mediation although it was not until 23 September 2005 that a consent order recording the basis of the accession of Small Mines to the CHA was made. Meanwhile, agreement had been reached between UK Coal and the Department and the consent order recording the basis of that agreement was made by the court on 24 May 2005. I shall refer to the terms of the “accession agreements” in due course.[6]In March 2003, Sir Michael Turner, with the agreement of the parties, set a cut-off date for registration of claims in the BCRDL. At that stage, 221,573 claims had been registered pursuant to the CHA. A year of lead-in time up to the cut-off date was given. Extensive publicity was conducted in an attempt to ensure that all claims outstanding were brought before the court. By the date of the cut-off on 31 March 2004, the number of claims registered had increased to 557,000. This large influx of claims gave rise to serious problems in processing claims within a reasonable period of time. This led to the development of the “fast track” or “risk offer” schemes (OROS). The fast track scheme for live claimants became known as LOROS, and the scheme for the widows and estates of deceased miners became known as DOROS.[7]The OROS schemes enabled large numbers of claims to be settled without going through the MAP. In the case of both live and deceased claims, the claimant/miner had to meet basic eligibility criteria, including minimum employment criteria (namely a requirement that the miner must have had one day’s employment underground after 4 June 1954 in England (4 June 1949 in Scotland)). Various categories of claimants qualify for LOROS offers; the largest category consists of cases where the claimant has a FEV1 of more than 90% of the predicted value, i.e. little (if any) respiratory disability. DOROS offers are made in cases where there is no mention of chronic pulmonary obstructive disease (COPD) on the miner’s death certificate.[8]Discussions about the development of the fast track schemes began in September 2004 and resulted in the launch, on 28 February 2005, of LOROS and, on 1 September 2005, of DOROS. Negotiations in relation to the OROS schemes were going on before the orders relating to the accession of UK Coal and Small Mines were made. The UK Coal accession order was made 3 months after LOROS was launched and the Small Mines order a few weeks after the inception of DOROS.[9]The OROS schemes were never formally incorporated into the CHA. There has been discussion at various times about their precise legal nature, i.e. whether or not they amount, in law, to a variation of the CHA. This has never been finally determined and the parties agree that the precise status of OROS will not affect my decision on the issue presently under consideration. It is, however, clear that neither UK Coal nor Small Mines ever “signed up” to the OROS schemes. They did not have sufficient claims against them to make the economies of scale attractive. Moreover, they were not prepared to pay damages in cases where the miner may not have suffered from a respiratory disability that would be actionable at common law. The accession agreements The UK Coal agreement[10]The UK Coal order provided:
“UK Coal shall join the BCRDL Claims Handling Agreement, dated 31 October 2003, as defined and amended by previous orders, from the date of this Order as a Defendant in accordance with the terms of the said Memorandum of Agreement as set out in Schedule 1 herein.”
[11]The UK Coal Memorandum of Agreement provided for joinder of the CHA by UK Coal: “…for the purpose of disposing of claims by Claimants whose employment history included a period or periods of employment in a mine occupied by/operated by UK Coal”.[12]The UK Coal Memorandum of Agreement went on to provide for the calculation of the components (dust levels, job factors and respirator factors) used to calculate the overall dust levels to which a claimant would have been exposed during his employment with UK Coal. It dealt also with apportionment of liability as between UK Coal and the Department, and with the payment of costs.[13]The UK Coal Memorandum of Agreement provided specifically that UK Coal would not be liable to pay damages in cases where a claimant had been diagnosed as suffering from chronic bronchitis (CB), without any corroboration in his medical records of the presence of the condition during the period of his employment with UK Coal. Under the CHA, damages for uncorroborated CB would be payable. The Memorandum of Agreement provided that claimants would be entitled to pursue their claims against UK Coal for uncorroborated CB at common law. It was agreed that, in that event, UK Coal would admit liability: the only issue to be determined by the court would be medical causation. Damages would be at large, not limited to the sums payable under the CHA.

The Small Mines agreement

[14]The Small Mines accession order provided: “Small Mines shall join the BCRDL Claims Handling Agreement, as defined and amended by previous orders, with effect from 13th July 2004 as Defendants in accordance with the terms of the said Memorandum of Agreement as set out Schedule 1 herein”.[15]The Small Mines Memorandum of Agreement provided for the joinder of the CHA by Small Mines, with effect from 13 July 2004, for the purpose of disposing of claims by claimants whose employment history included a period or periods of employment in a licensed small mine insured by AGF (or any other insurers for whose policies AGF had assumed or was in the future to assume liability).[16]The Small Mines Memorandum of Agreement also provided: “For the avoidance of doubt Small Mines agree to dispose of …claims in accordance with the terms of the CHA as it applied on 13 July 2004 and this memorandum of agreement does not relate to Fast Track offers in relation to both Live Risk Offers and Deceased Risk Offers”.[17]The Small Mines Memorandum of Agreement set out the basis for the calculation of the components (dust levels, job factors and respirator factors) used to calculate the total dust levels to which a claimant would have been exposed during his employment with Small Mines. It dealt also with apportionment of liability as between Small Mines and the Department, and with the payment of costs.[18]Unlike the UK Coal accession agreement, the Small Mines agreement did not contain any provision excluding the payment of damages for uncorroborated CB.

Provision for administrative costs

[19]The accession agreements contained no provision governing apportionment (as between the Department and UK Coal/Small Mines) of the administrative costs of investigating and processing claims directed against both the Department and one of the co-defendants. These matters were presumably the subject of separate agreements between the Department and each co-defendant. I have no information about those agreements. Events following

The accession agreements

[20]Following the making of the accession agreements, the effect of the acceptance of an OROS payment in a claim which was also directed against UK Coal or Small Mines was discussed at successive court hearings before Sir Michael.[21]Initially, the Department sought to persuade UK Coal and Small Mines that, in such a case, they should contribute to the OROS settlement. However, this was clearly inappropriate since the OROS payment would discharge only the liability of the Department, not that of any co-defendant. Thereafter, the Department’s position was that, once they had discharged their own liability, it was up to the co-defendants to put in place any necessary machinery for processing the residual claim against them. The Department indicated that they were not prepared to allow the resources that they had put in place (including the MAP process) for the purpose of determining actions against co-defendants.[22]During the summer of 2005, the CG attempted to broker an agreement with the Department and the co-defendants which would permit the co-defendants to use the MAP facilities to resolve claims against them. These efforts failed.[23]On 12 September 2005, Halliwells, the solicitors acting for both co-defendants, wrote to the CG in these terms:
“The COPD Handling Agreement (“the Agreement”) has been the subject of a significant amendment between yourselves and the DTI. The said amendment, as we understand it, is intended to accelerate payments to Claimants, but unfortunately such a system will remove the robust medical assessment process that was originally put in place for the purposes of the Agreement…. We have considered this newly negotiated LOROS-DOROS scheme with our clients and we are instructed to inform you that UK Coal will not accept any claims under the Agreement that have been the subject of the LOROS-DOROS scheme. Should any of those Claimants that have opted for payments under the LOROS-DOROS scheme wish to pursue UK Coal for an apportionment, they will have to do so, at common law. UK Coal will continue to operate the terms of the Agreement for those Claimants who do not pursue the LOROS-DOROS scheme.”
[24]A Report presented to the court at a hearing in September 2005 by Small Mines expressed considerable concern about their position. The Report observed that Small Mines had believed that they were joining a scheme whereby they would be a partner (albeit a minor partner) with the Department in investigating and processing claims made against them both, and in contributing to the costs thereof. Now, it appeared that, in many claims, their partner, the Department, was proposing to ‘abandon ship’. Small Mines complained that, if they were left to deal with claims against them without the assistance of the Department, they would have difficulty in obtaining the employment information necessary to calculate damages using the dust model and damages calculator. They would not have access to the MAP and would have to provide alternative medical facilities. They would have to bear the whole costs of these processes and of the administration associated with investigating claims, without any contribution from the Department.[25]At that September hearing, there was an interchange upon which UK Coal and Small Mines place considerable emphasis. Mr David Allan QC, for the CG, opened the discussion thus:
“The last point I was going to refer to at this stage is the case where a man has British Coal employment and either Small Mines employment or UK Coal employment. I made the legal position clear to your Lordship some months ago that, as is apparently now accepted by all parties, his claim against Small Mines and UK Coal is a separate claim, a separate tort, and the compromise of his claim against British Coal does not extinguish the separate claim against Small Mines and UK Coal.”
[26]Sir Michael Turner replied:
“But the anxiety expressed by those other parties is that they might be faced with lengthy and expensive investigation, a common law action, dealing with the residual part of his claim when he has already accepted DOROS and opted out of the MAP process. That is their position.”
[27]Mr Allan went on to say:
“The position of the claimants’ group is that they would wish to resolve the outstanding claims against Small Mines and UK Coal, and for men who accepted a LOROS payment they would wish to resolve them within the CHA but that would obviously require the agreement of the three parties involved. If the DTI take the position that they will not countenance the use of the CHA to resolve these outstanding claims then that leaves the alternative of pursuing a common law claim…”
[28]Later in that hearing, Sir Michael observed that the problems under discussion may well be “more apparent than real” and that “the circumstances in which a claimant has decided to accept an OROS offer and then bring a claim at common law against a co-defendant must be very rare”. Mr Allan reserved his position as to the numbers of claimants likely to be involved. I shall return to the effect of this interchange in due course.[29]On 17 October 2005, the CG wrote to the Department, questioning whether the Department had the power to exercise a veto denying claimants and co-defendants access to “the CHA machinery, including the MAP process”. They pointed out that, in some claims, UK Coal or Small Mines were the sole defendants. They contended that, as parties to the CHA, UK Coal and Small Mines were entitled to have access to the CHA machinery.[30]Correspondence on this topic continued and, on 13 December 2005, Halliwells set out the co-defendants’ position thus:
“The accession of both our clients to this COPD scheme necessitated years of negotiation and considerable expense. Almost immediately upon our clients’ accession you have negotiated and determined an entirely different scheme to that which both of our clients acceded. As matters stand, neither of our clients is interested in the new scheme. Any Claimant accepting LOROS/DOROS payments take themselves entirely outside the scheme negotiated by our clients…”
That remains the position of UK Coal and Small Mines today.[31]By the beginning of this year, the Department’s position had changed to the extent that it had withdrawn its objection to the use of the CHA processes, including the MAP. The latter is to be made available for the use of the co-defendants, subject to their reaching an agreement of terms with Atos Origin. However, UK Coal and Small Mines have continued to maintain their refusal to deal, under the CHA, with claims where OROS payments have been accepted. Thus, the issue has been placed before me for determination.

The parties’ cases

[32]The parties are agreed that a claimant who makes a claim for damages in respect of respiratory injury caused by exposure to coal mine dust and/or fumes during the course of his employment with both BCC and either UK Coal or Small Mines has a separate cause of action against each defendant. Coal dust and/or fumes make a cumulative contribution to the relevant medical conditions, so that each period of exposure causes separate injury. The parties agree also that settlement by a claimant of his action against the Department does not extinguish his claim against a co-defendant. The issue is how that remaining claim is to be pursued.[33]UK Coal and Small Mines contend that it is not open to a claimant to proceed against them under the CHA once an OROS payment has been accepted. They contend that acceptance of an OROS offer takes a claimant outside the CHA. In those circumstances, they say, his only means of proceeding is by way of an action at common law. The CG’s position is that the effect of acceptance of an OROS offer is only to extinguish the liability of the Department in relation to the claim. It does not, they say, affect the obligation of a co-defendant, under the terms of their accession, to deal with the claim under the CHA.

The case for UK Coal

[34]UK Coal estimates that they have 1,800 claims affected by this problem. In addition they have 12 cases where they are the only defendant.[35]For UK Coal, Mr Rawlinson submitted that the court could resolve the issue in two ways. The first could be termed the “procedural” approach, by which he meant an approach based on my wide-ranging case management powers to control the BCRDL fairly and efficiently. An alternative approach would be by way of a conventional contractual analysis. In reality, Mr Rawlinson sought to persuade me to adopt a combination of the two approaches. He submitted that, if I were to adopt the “procedural” approach, I should, nevertheless, have regard to the relevant contractual principles and give effect to them within the BCRDL. If, on the other hand, I adopted the contractual approach, he suggested that I should carry out a “cross check” in order to see whether that approach would result in absurdity, anomaly or some other outcome inconsistent with the objectives of the BCRDL. He argued that, whichever way I approached the issue, it was evident that an individual claimant should not be permitted to bring a claim against UK Coal under the CHA once he had accepted an OROS payment.

The procedural approach

[36]Mr Rawlinson accepted that, before UK Coal’s accession order was made on 24 May 2005, UK Coal was aware that OROS was being negotiated. In its written report to the court for a hearing in January 2005, UK Coal had sought information about how the Department foresaw the fast track procedure being implemented in claims involving UK Coal. No definitive response to that enquiry had been received by the time of accession. Indeed, at the hearing at which the accession order was made, the Department was proposing to seek a contribution from UK Coal to OROS payments: see paragraph 21 of this judgment. That proposal, as I have said, was later recognised to be inappropriate. Mr Rawlinson said that the reference in the accession order to the CHA “dated 31 October 2003, as defined and amended by previous orders” had been included deliberately by UK Coal, so as to make it plain that their accession was not to be subject to any later amendment to the CHA incorporating a fast track procedure.[37]Mr Rawlinson explained that, in claims which proceeded under the CHA and in which the Department and UK Coal were co-defendants, the Department were responsible for collecting the miner’s employment and other records and for checking his employment history. The Department bore the cost of that exercise. The costs of administering the claim generally and of the MAP were shared between the Department and UK Coal. It was on this basis that UK Coal had entered into the accession agreement. If, in claims where OROS payments had been accepted, UK Coal were to be left bearing the entire responsibility - and costs - of the process, that would represent a far greater economic burden than could have been foreseen at the time of accession.[38]Mr Rawlinson reminded me of the provision contained in UK Coal’s accession agreement which excludes the payment of damages in cases of uncorroborated CB. He estimated (and this estimate was accepted by the claimants) that, in at least 90% of claims where OROS payments have been accepted, the miner would have suffered only from uncorroborated CB. Eligibility for LOROS offers depends, in the main, on the claimant having an FEV1 of more than 90% (i.e. little respiratory disability). DOROS payments (which are relatively modest) are appropriate only for those cases involving little respiratory disability.[39]Mr Rawlinson submitted that, if a claimant who had accepted an OROS payment were permitted to pursue his claim against UK Coal through the CHA, he would have nothing to lose by doing so, even if he had little or no respiratory disability. The result would be that UK Coal would be liable to pay large amounts of costs in order to investigate and process claims which ultimately turned out to be excluded from payment under the terms of their accession agreement. Potentially, UK Coal might have to process all 1800 claims against them, of which only a very small proportion might result in a damages award. This, he submitted, would impose an unfair burden on UK Coal and would be inconsistent with the objectives of the BCRDL.[40]Mr Rawlinson emphasised that, in agreeing to join the CHA, UK Coal had given up certain rights which would have been available to them had the litigation proceeded at common law. They had surrendered those rights in return for the opportunity to participate in a managed, cost-effective scheme for compensation. They would not have done so had they known that they might be left to organise and pay for the processing of hundreds of claims.[41]Mr Rawlinson said that, insofar as I approached the case on the basis of a case management decision, I should take into account the cost/benefit analysis undertaken by UK Coal when entering the scheme. The agreement they reached excluded uncorroborated CB cases and ensured that they would only ever be liable for a proportion of the cost of processing claims. So far as they were concerned, the benefits of the CHA process outweighed the disadvantage to them of foregoing the arguments which would have been available to them at common law.

The contractual position

[42]Mr Rawlinson submitted that the contractual position was that acceptance by a claimant of an OROS payment in settlement of his claim against the Department was a breach of a fundamental implied term of the CHA as against any party who had not signed up to OROS. The implied term relied on was that, in exchange for UK Coal agreeing not to insist on common law proceedings being commenced against them, and further agreeing to abide by those parts of the CHA as applied to them which inured to the benefit to the claimant, the claimant would abide by the terms of the CHA. He submitted that the term was fundamental because it prevented the full cost of the cha process falling on UK Coal.[43]Mr Rawlinson argued that, if this analysis were correct, then it was clear that UK Coal were entitled to elect whether to accept the breach or to affirm the existence of a contract. He said that UK Coal had made it clear on many occasions that they considered any claimant who had accepted an OROS payment to be in breach of the CHA and would accept that breach, thus releasing themselves from all obligations under the CHA.

The case for Small Mines

[44]Small Mines have so far identified about 120 cases in which they are a co-defendant and the claimant has accepted an OROS payment. They also have about 300 cases in which they are the sole defendant.[45]For Small Mines, Mr Timothy Smith argued that they would experience very real difficulty in obtaining and checking the information necessary to confirm a miner’s employment. There would also be difficulty in obtaining sufficient data to calculate the dust levels to which a miner had been exposed and to carry out the necessary apportionment exercise. The responsibility for, and costs of, these processes would fall entirely on Small Mines. In addition, they would have to bear the costs of the MAP.[46]Mr Smith argued that the effect of a claimant accepting an OROS payment was to change fundamentally the nature of the tri-partite agreement reached by the Department, Small Mines and the CG. If the claim were to proceed under the CHA, it would cast on Small Mines a financial and organisational burden that had not been envisaged at the time the accession agreement was made. The whole nature of the agreement would have changed and, as a result, it would not be open to a claimant specifically to enforce it. He referred to the case of Universal Cargo Carriers Corporation v Pedro Chitati [1957] 1 Lloyd’s Rep. 174 as authority for the proposition that, in order to amount to frustration, the relevant event must be so grave as to go to the root of the contract and frustrate its commercial objective. He contended that the breach in this case had this effect.[47]Mr Smith relied also on the evidence of Mr David Field, Head of the team at Capita responsible for the management of disease claims against Small Mines. Mr Field speaks of the “enormous increase” in the amount of work and expense that would be involved in processing each claim without the assistance of the Department. He also refers to the cost of the MAP which is said to be £970, excluding any associated administration costs.

The CG’s case

[48]For the CG, Mr Bowley pointed out that UK Coal’s accession agreement made no reference to the OROS process despite the fact that LOROS was already in existence at the time and DOROS was due to start shortly. This was in contrast to the Small Mines accession agreement. He said that, at the time when UK Coal entered into the agreement, their position was that they were uncertain about how claims against them were to be managed in conjunction with the proposed OROS system. They were seeking information about this from the Department. He pointed out that there was no provision within the accession agreement (as there was for uncorroborated CB claims) excluding claims where an OROS payment had been accepted. He said that these omissions suggested that, at the time of the accession agreement, UK Coal’s position as to the treatment of claims in which they were co-defendants and where an OROS payment had been accepted had not yet crystallised. As to the provision relating to OROS claims contained in Small Mines’ accession agreement (see paragraph 16 of this judgment), Mr Bowley submitted that it was significant that it provided only that Small Mines would not be offering fast track settlements. The agreement did not provide that, if a claimant accepted a fast track payment, his claim against Small Mines could not proceed under the CHA.[49]Mr Bowley submitted that the accession agreements provided a process for disposing of claims against UK Coal/Small Mines and set out the methods to be used in calculating the tortious dust levels during the claimant’s employment with UK Coal/Small Mines and for apportionment (where appropriate) between the Department and UK Coal/Small Mines. The agreements were silent about the division of responsibility as between the Department and UK Coal/Small Mines for administering the various parts of the process. Nor did they indicate how that work was to be funded. Those matters had presumably been the subject of private agreements between the relevant parties.[50]Mr Bowley pointed out that both co-defendants (Small Mines to a greater extent than UK Coal) had to deal with claims made against them as sole defendants. They are having to set up their own processes for dealing with those claims and will have to bear the costs thereof. In addition, the CHA provided for expedited payments to be made by the Department. If such a payment was made, the claim against any co-defendant would survive and have to be processed. As it happens, there have been very few cases in which this has arisen; however, that would not necessarily have been apparent when the co-defendants entered into their accession agreements. Mr Bowley submitted that there would be no essential practical difficulty in dealing with claims where an OROS payment had been accepted in the same way. Moreover, it would be more efficient and quicker for the claims to be dealt with under the CHA than by way of ordinary litigation. If the claimants had to pursue their claims in the courts, the co-defendants would have to undertake the same steps (e.g. investigation of records, apportionment and calculation of damages) as if the claims had been dealt with under the CHA.[51]Mr Bowley referred to UK Coal’s concern that they would be required to fund the process of investigation and MAP in many cases which would ultimately prove to be claims for uncorroborated CB and would, under the terms of their accession agreement, result in no award of damages. The concern is that UK Coal will have to bear the costs of processing those claims, with no means of recovering those costs from the claimants. Mr Bowley argued that this problem was unlikely to arise in reality. He said that a claimant’s solicitor dealing with a claim against a co-defendant where an OROS payment had been made would have to consider whether a continuation of the claim against the co-defendant was likely to result in an award of damages. He would have available to him some (perhaps a substantial amount of) information resulting from preparation of the OROS claim. He would moreover have a professional duty to advise his client as to the likely outcome of any claim and whether or not it was appropriate for him to proceed. It would not be in his interests to advance a claim that was unlikely to succeed. Unsuccessful claims do not result in an award of costs for claimants’ solicitors. If, as UK Coal fear, hundreds of unmeritorious claims were to be pursued at their expense, this would result in significant losses to the claimants’ solicitors concerned. Mr Bowley submitted that this was unlikely to happen.

Conclusions

[52]There is no dispute that claimants who have made claims against both the Department and UK Coal/Small Mines, and who have accepted an OROS payment in settlement of their claims against the Department, have a surviving claim against the relevant co-defendant. The issue is whether they can pursue that claim through CHA or whether their only recourse lies at common law.[53]I have considered the history contained within the correspondence, court reports and transcripts of hearings. The views voiced by the parties in 2005 must be viewed in the context in which they were given. The OROS schemes had just got under way and there was uncertainty as to how they were to be reconciled with the accession agreements recently ordered. The Department was seeking a contribution from the co-defendants initially. When that was deemed to be inappropriate, it refused to allow the CHA machinery to be used to resolve outstanding claims against co-defendants, insisting that they must develop their own processes. This created an obvious practical difficulty. It was against that background that the discussions of 6 September 2005 took place. I do not invest Mr Allan’s remarks on that date (to the effect that if co-defendants’ claims were to be resolved under the CHA, this would require the agreement of the co-defendants themselves) with the degree of significance urged on me by UK Coal and Small Mines. It seems to me that I must look at the picture as a whole.

The contractual approach

[54]The accession agreement by which the co-defendants joined the CHA provided a process for dealing with claimants whose employment history included a period of employment in a mine operated by one of the co-defendants. The process (including such elements as registration, spirometry, provision of claims questionnaire (CQ) containing information on which the claim was founded, collection of employment and other records, medical assessment procedures and calculations of dust levels and damages) was set out in the CHA and was supplemented as necessary by the accession agreements.[55]I am quite satisfied that it is practical and possible for all elements of the process to be implemented satisfactorily even in a claim where the Department is no longer a party. The accession agreements were not confined to claims where UK Coal or Small Mines were co-defendants with the Department. Within the CHA itself, there was the potential for a co-defendant to be left to deal with a claim which the Department had settled by way of an expedited payment. Moreover, there are a significant number of claims where Small Mines are the sole defendant. UK Coal has rather fewer such claims. Both co-defendants are in the process of making arrangements to deal with those claims appropriately. There is no reason why arrangements cannot be made to process claims which were originally made against one of the co-defendants and the Department.[56]I accept that this will place an additional administrative and economic burden on the co-defendants. The accession agreements did not make provision for the apportionment of administrative responsibility and costs as between the Department and the co-defendants. These matters were presumably the subject of private agreements, of which the Court knows nothing. There was no provision within the accession agreements excluding the processing of claims where OROS payments had been accepted in settlement of the Department’s liability. There is nothing on the face of the agreements which would suggest that a claim where an OROS payment has been made cannot proceed to determination as against a co-defendant under the CHA.[57]UK Coal and Small Mines rely on the contention that the claimants’ action in accepting an OROS payment has the effect of fundamentally breaching the accession agreements and/or the CHA, and/or of rendering the agreements and/or the CHA impossible to perform. I do not accept that analysis. It is true that, in the event of a claimant accepting an OROS payment and proceeding against a co-defendant, the burden on the co-defendant would be greater than originally anticipated by them. But, in taking that course, it does not seem to me that the claimant would be in breach of either the CHA or the relevant accession agreement. Even if he was, the breach would not be of such seriousness as to amount to frustration of the contract by breach. Nor would it be such as to render the contract impossible to perform. Nor does it frustrate the commercial objective of the accession agreement or the CHA. In coming to these conclusions, I take into account the number of claims involved and the consequent likely burden on the co-defendants. I shall deal further with these matters in due course.

The procedural approach

[58]In considering the issue from the perspective of my case management function, I have regard to the contractual background. However, my prime concern is for the efficient and effective conduct of these claims within the context of the BCRDL, balanced – as it must be – with the need to do justice as between the parties. It seems to me that this is the approach which I should adopt when considering the issue although the outcome would be the same whichever approach I took.[59]The position is that the MAP facilities are now available to the co-defendants through the auspices of ATOS Origin. The other facilities developed in support of the CHA (record collection, dust calculation and damages calculation) will be available to them also. Small Mines will have to develop the necessary systems to deal with those cases in which they are the sole defendant. Although UK Coal have far fewer claims where they are the sole defendant, they too will have to develop appropriate systems. This exercise will no doubt be facilitated by the sharing of systems between the two of them, given that the two co-defendants are represented by the same firm of solicitors.[60]The co-defendants are concerned about the additional cost to them of processing claims where an OROS payment has been accepted. However, were those claims to proceed by way of litigation at common law, the same processes of information gathering, disclosure of documents, medical assessments and apportionment would have to be undertaken. In the event of a claim being successful, the costs incurred by the relevant co-defendant would be likely to be substantially higher than they would be under the CHA. Under the CHA, the co-defendants enjoy the benefit of knowing that both damages and the level of claimant’s costs are constrained by its terms. Of course, it may well be that, if claims have to be pursued by means of common law litigation, funding will not be forthcoming or there may be reluctance on the part of a claimant to pursue a claim for other reasons. But, in a case where a claimant has a meritorious claim against a co-defendant, that would frustrate the stated purpose of the CHA, namely to provide for the fair, consistent and expeditious assessment of claims and for the payment of damages where appropriate. Moreover, it would not achieve justice for that individual claimant.[61]The same considerations do not apply in respect of unmeritorious claims. Here, co-defendants may be faced with the costs of processing a claim which ultimately proves unsuccessful without the prospect (that would exist at common law) of recovering their damages. This is of particular concern to UK Coal which, as I have said, believe that at least 90% of claims against them are cases of uncorroborated CB for which no damages are payable under their accession agreement.[62]I fully understand the concerns expressed by UK Coal and have considered them with care. Having done so, however, I have concluded that it is highly unlikely that they will be faced with a large number of wholly unmeritorious claims. Claimants’ solicitors have a professional duty to review these cases and to give responsible and careful advice as to whether they should proceed. It would be entirely contrary to their own financial interests to pursue claims that are virtually bound to fail. It would in my view be very surprising if they advocated pursuing large numbers of claims that were likely to be unsuccessful.[63]In all the circumstances, I consider that the most efficient, effective and expeditious means of dealing with the claims in question is within the CHA. I am satisfied also that this course will result in the greatest degree of justice and fairness as between the parties. It will, as I have said, involve a greater burden on the co-defendants than they had envisaged. However, that burden is unlikely to be as great as they fear. It may be less than would be the case if they faced multiple common law claims. They have the benefit of the limitation of damages and costs under the CHA. The claimants will have the benefit of having their claims determined under the agreed scheme, within a reasonable time and without the need to find funding before the claim can proceed.[64]I therefore answer the question posed in paragraph 1 of this judgment in the affirmative.[65]I am prepared to consider making directions designed to provide further protection for the position of the co-defendants. For example, in a case involving CB alone (if it is possible to identify such a case pre-MAP), it may be appropriate to require a claimant to obtain the miner’s medical records, and to provide evidence of corroboration, before the MAP (which is likely to be the most expensive part of the process) is undertaken. If no corroboration was provided, then the MAP would not go ahead. I emphasise that this is only a preliminary thought on my part and may prove unworkable; however, it may be worthy of consideration. I suggest that the parties give careful thought to any directions which they believe would be helpful, both in this regard and in order to progress the claims generally. The directions can then be considered at the October hearing. In any event, I shall be ordering that claimants wishing to pursue their claims against UK Coal or Small Mines should serve a CQ and I shall be setting a time limit within which this must be done.