BETTY SOPHIA SMITH FERGUSON AND OTHERS AGAINST J & A LAWSON (JOINERS) LIMITED
EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
[2014] CSIH 82
PD904/12
Lady Paton
Lady Smith
Lord Bonomy
OPINION OF THE COURT
delivered by LADY PATON
in the cause
BETTY SOPHIA SMITH FERGUSON and others
Pursuers and respondents;
against
J & A LAWSON (JOINERS) LIMITED
Defenders and reclaimers:
Act: Anderson QC, Christine; Drummond Miller, Edinburgh
(for Peacock Johnson, Glasgow)
Alt: N R Mackenzie; Brodies LLP, Glasgow
15 October 2014
Time‑barred mesothelioma claim: section 19A of the Prescription and Limitation (Scotland) Act 1973
[1] The late Kenneth Ferguson was born on 21 May 1934. He came from Aberdeen and appears to have spent most of his working life there. It is averred that from January 1968 until January 1973, he was employed as an apprentice joiner by J & A Lawson (Joiners) Limited, Aberdeen (the defenders). In November 1973, the defenders ceased trading. From 1973 until 1980, Mr Ferguson was employed as a custodian by M & N Educational Enterprises Limited, known as the American School of Aberdeen.
[2] In early 2006 Mr Ferguson had a persistent cough. He was diagnosed as suffering from mesothelioma. In June 2006 he instructed Messrs Thompsons, solicitors, to act on his behalf. He told them that he had suffered exposure to asbestos during his employment. He named two potentially relevant employers, Lawson’s of Milltimber and the American School.
[3] Messrs Thompsons began investigating those employers, both of which had ceased to exist. Inquiries were made of HM Revenue and Customs (HMRC), and Companies House. On 7 August 2006, HMRC advised that Mr Ferguson’s employer for the period 1968/9‑1970/71 and part of 1971/2 was “J & A Lawson”. There was, formerly, a company of that name based in Edinburgh. On 18 August 2006 a Companies House report on “J & A Lawson (Joiners) Limited” was obtained. It was noted that the company had been incorporated on 9 September 1968 with a registered office at 1 East Craibstone Street, Aberdeen, and had been dissolved on 28 May 1985. On 22 August 2006 Companies House advised that the company records relating to J & A Lawson (Joiners) Limited had been destroyed.
[4] On 31 August 2006, Mr Ferguson died. His family sought to raise an action of damages in respect of his death. Messrs Thompsons, solicitors, continued to act. Investigations relating to his employers and any insurance cover continued. Inquiries were made of HMRC, Companies House, the Association of British Insurers (ABI), the National Archives of Scotland, Messrs Simpson & Marwick solicitors, Messrs J & G Collie solicitors, private investigators, the Employers’ Liability Tracing Office, and others. Defunct companies including “J & A Lawson” and “J & A Lawson (Joiners) Limited” were traced. On 1 October 2006, the ABI advised that no employers’ liability insurance had been traced, and that they could not assist further.
[5] At a later date, Messrs Thompsons sent a letter to Messrs J & G Collie, solicitors, whose address at 1 East Craibstone Street, Aberdeen, had been the registered office of J & A Lawson (Joiners) Limited prior to its dissolution. The letter was dated 12 February 2009, and was in the following terms:
“Dear Sirs
OUR CLIENT: THE LATE MR KENNETH FERGUSON
EMPLOYER – J & A LAWSON (JOINERS) LTD
We act on behalf of the family of … Mr Kenneth Ferguson in respect of his asbestos related lung disease and exposure to asbestos during the course of his employment.
The late Mr Ferguson was employed by J & A Lawson (Joiners) Ltd from 1968/69 to 1972/73 and was regularly exposed to asbestos. We note from the company records that you were the Company Secretaries of this company, although we note that it was dissolved in 1985. We are trying to trace Employment Liability Insurers for the company during our client’s employment and wonder if you are able to help with this.
Do you know the names of current or former insurers or insurance brokers? If you do not know, we wonder if you know the names of any former directors of the company that would be able to help …”
[6] Messrs J & G Collie replied by letter dated 18 February 2009 as follows:
“Dear Sirs
J & A Lawson (Joiners) Ltd
Your Client – The Late Mr Kenneth Ferguson
We refer to your letter of 12 February 2009.
Unfortunately, our files relating to this client have long since been destroyed and there is no‑one here who was around between the relevant dates who might recall any details.
We regret therefore that we are unable to assist you …”
[7] In a note dated 6 July 2009, Messrs Thompsons recorded that matters were still unclear. There was a suggestion inter alia that J & A Lawson (Joiners) Limited should be restored to the Companies Register (although not every partner in the firm agreed that this course of action was appropriate). The time bar was expressly noted to be “30 August 2009”, and emphasis was placed on the urgency of matters. By letter dated 17 July 2009 a solicitor advocate was instructed to prepare the necessary petition.
[8] The petition was presented to the court. The company was restored to the register on 26 August 2009. Meantime on 21 July 2009 an investigator, instructed by Messrs Thompsons, reported that no trace of any relevant insurer could be found on any database to which he had access.
[9] A witness for the pursuers (Ian Porter) had called at Messrs Thompsons’ office, and had been precognosced. He said that he and Mr Ferguson worked together “for the firm of J & A Lawson, Joiners, Beaconhill Road, Milltimber, Aberdeen”. He was able to describe the conditions in the workshop in which, according to the precognition given by Mr Ferguson, the latter did some work, although the majority of his work appeared to be out‑of‑doors. A summons was drafted. The conclusions totalled £750,000. Per incuriam, as a result of an error in the instructing letter, the first defenders were named and designed in the summons as “J & A Lawson Limited [not J & A Lawson (Joiners) Limited] 1 East Craibstone Street, Aberdeen”. The second defenders were named and designed as “M & N Educational Enterprises Limited, 28 Bury Road, Newmarket CB8 2BT” (hereafter “M & N”).
[10] Messengers at arms, Messrs Scott & Co, served the summons (referred to by counsel as “the first action”) on 28 August 2009, i.e. a few days before the expiry of the triennium. They reported by letter dated 1 September 2009 as follows:
“We thank you for your instructions in the above case and as requested we have served the summons on the first defenders [J & A Lawson Limited].
Service was effected by depositing at their registered office at 1 East Craibstone Street, Aberdeen, being the offices of Messrs James & George Collie, Solicitors. On our initial attendance at the address, Messrs James & George Collie advised that they previously acted for J & A Lawson (Joiners) Limited who were dissolved in 1985. Apparently, the directors then traded as a partnership but both have since died. They claim to have had no connection with the first defenders, whose details we were unable to find on Companies House. As we were unable to contact your office during the late afternoon on 28th August, service was effected by depositing as instructed. On advising your office of service, we understand from your Debbie Morton that the first defenders have been restored to the company register …”
[11] The error in the summons relating to the name of the first defenders went unnoticed. The named first defenders (J & A Lawson Limited) did not enter appearance. So far as the second defenders were concerned, no effective service could be made on them, as 28 Bury Road was found to be a residence occupied by an individual who knew nothing about M & N Educational Enterprises Limited. Accordingly the summons did not call against the second defenders.
[12] Continuing investigations to discover whether there was any effective insurance cover for J & A Lawson (Joiners) Limited during 1968 to 1973 proved negative. On 1 October 2009, the ABI reported to Messrs Thompsons that no employers’ liability insurance had been found. In order to preserve the position, decree in absence was taken against “J & A Lawson Limited” on 6 July 2011. Subsequently, on 30 September 2011, the Employers’ Liability Tracing Office provided Messrs Thompsons with details of insurers for “J & A Lawson (Joiners) Limited” for the period 16 May 1966 until 16 May 1977. This information was new: it had previously been unavailable (for, as counsel for the defenders explained, the database at the ELTO changed and evolved from day to day, as matters came to light and the database was up-dated). The insurers were AGF. By e‑mail dated 7 October 2011, Messrs Brodies solicitors wrote to Messrs Thompsons stating:
“We’ve received instructions from AGF in the above matter. Their records suggest that they were on cover for J & A Lawson Limited from 16th May 1966 until the end of the alleged period of employment. I understand a letter of claim has not been intimated yet. If that is to come, can you send it direct to me? Equally, if the claim isn’t proceeding, can you possibly let me know?”
[13] Messrs Thompsons intimated the claim to those insurers, and on 10 October 2011 sent a copy of the summons to Brodies. On 9 February 2012 the same solicitor from Brodies, notwithstanding her earlier reference to the insured as “J & A Lawson Limited”, e‑mailed Thompsons stating: “My client did not insure J & A Lawson Limited” and in further correspondence observed that any claim against J & A Lawson (Joiners) Limited was time‑barred.
[14] On 14 May 2012, the “second action” was raised against J & A Lawson (Joiners) Limited (as the sole defenders). The defenders took a plea of time-bar, as the triennium had expired on 30 August 2009. The pursuers accepted that the claim was time‑barred in terms of section 18 of the Prescription and Limitation (Scotland) Act 1973, but relied upon section 19A of that Act.
[15] A preliminary proof on the question of time‑bar was held before Lord Uist. There were two witnesses, namely Mrs Maureen McCulloch, a para‑legal with Messrs Thompsons, and Mrs Blane, a partner in that firm. In a judgment dated 30 August 2013 the Lord Ordinary concluded that it would be equitable to allow the action to proceed in terms of section 19A. The defenders reclaimed.
The defenders’ grounds of appeal and the pursuers’ answers
[16] The defenders’ grounds of appeal are in the following terms:
The Lord Ordinary erred in law:
- by taking into account that the defenders and reclaimers were insured when exercising his discretion;
- by taking into account the speculative funding of Thompsons, solicitors, who were the agents for the pursuers and respondents;
- by holding that the insurers of the defenders and reclaimers are in a better position than they would have been had decree in absence been taken against the correctly designed defenders in the first action.
The Lord Ordinary erred in the exercise of discretion as follows:
- by placing excessive weight on the defenders and reclaimers being insured;
- by placing excessive weight on the speculative funding of Thompsons, solicitors, who were the agents for the pursuers and respondents;
- by comparing what might have happened had proceedings been raised against the correctly designed defenders in July 2009 with the procedural position faced by the defenders and reclaimers in the present action;
- by placing insufficient weight on the errors committed by Thompsons, solicitors, before, during and after the raising of proceedings in July 2009;and
- by placing insufficient weight on the prejudice that will be suffered by the defenders and respondents if the present proceedings are allowed to proceed.
[17] The pursuers in their answers refute the suggestion that there was any error of law, and assert that there was a proper exercise of the Lord Ordinary’s discretion.
Submissions for the defenders
[18] Counsel for the defenders submitted that the interlocutor of 30 August 2013 should be recalled, and the action dismissed. The Lord Ordinary had erred in law and in the exercise of his discretion.
I Propositions
[19] It was accepted that the Lord Ordinary had a wide unfettered discretion, and that the onus was upon the defenders to show that he had misdirected himself in law, or otherwise gone plainly wrong. The defenders advanced 11 propositions: (i) the defenders and their insurers were normally treated as a composite unit, and thus the defenders’ insurance arrangements were in general irrelevant; (ii) in the exercise of the discretion under section 19A, the defenders’ insurance arrangements were irrelevant unless the insurers’ action/inaction made it unfair to leave the conduct of the insurers out of account; (iii) in the present case, the absence of any relevant insurer during the triennium was irrelevant; (iv) the court ought to address the circumstances of the present action (in which section 19A was invoked) rather than what might have happened had an action been timeously raised against the correct defenders; (v) the issue was whether the defenders could show that, if the action were to proceed, there would be a real possibility of significant prejudice on their part in defending the action; (vi) the limitation period was not arbitrary: it represented a legislative judgment about how the welfare of society would best be served, notwithstanding that a good cause of action might not be able to proceed; (vii) once the limitation period had expired, all the prejudice suffered by the defenders by the bringing of the action should be considered; (viii) if it was established that there would be a real possibility of significant prejudice for the defenders if the action were to proceed, that usually determined the issue in favour of the defenders; (ix) in this particular case, the defenders would be exposed to significant prejudice in two ways: (a) due to the passage of time, they could not properly defend themselves; and (b) the action was now directed solely against the defenders, whereas in the first action there was also a prima facie case against M & N (which counsel for the defenders contended was a stronger case); (x) there should be a right of action based on professional negligence against the pursuers’ former agents, who were experts in industrial disease litigation; (xi) the Lord Ordinary referred to the realities of the case; but the pursuers’ interests could only be served by raising timeous proceedings against the correct defenders.
II Facts and circumstances
[20] Counsel reminded the court of the sequence of events. A solicitor advocate in Messrs Thompsons had in fact advised against restoring J & A Lawson (Joiners) Limited to the register, reflecting his view that a stronger case could be made against M & N. That was important when assessing any prejudice to the defenders, were the time-barred action to be permitted to proceed. The Lord Ordinary had erred in failing to take into account the fact that the prima facie case against M & N was as good as, if not better than, any case against the defenders. The only reason that M & N had been released from the first action was the inability to effect proper service upon them, arising from Messrs Thompsons leaving attempts at service until three days before the expiry of the triennium.
III The test for the Lord Ordinary
[21] Relevant authorities were Donald v Rutherford 1984 SLT 70, Kelly v Bastible [1997] PNLR 227 at pages 234-238, B v Murray (no 2) 2005 SLT 982, AS v Poor Sisters of Nazareth 2008 SC (HL) 146 paragraphs [23]-[32], Fleming v Keiller [2006] CSOH 163, Leith v Grampian University Hospital NHS Trust [2005] CSOH 20, and an English authority Collins v Secretary of State for Business Innovation and Skills [2014] EWCA Civ 717 paragraph 65. It was accepted that the Lord Ordinary had a discretion, but there were limits (Lord Cameron at page 75 of Donald v Rutherford). There was a range of possible outcomes open to the Lord Ordinary: but if the circumstances of the case suggested that the Lord Ordinary had gone “plainly wrong”, his decision was open to challenge. The present claim was in itself a difficult one because of its age and the disappearance of evidence. Those difficulties were compounded by the release of M & N (against whom there had been a stronger case) and by the claim being a high value one. Also relevant was the fact that there was a clear claim based on negligence against the solicitors: the Lord Ordinary had erred by giving that fact insufficient weight. The actions taken by the solicitors to trace insurers were irrelevant (as the defenders and their insurers should be treated as a composite unit: Kelly v Bastible cit sup). The solicitors should have focused upon obtaining a decree against the defenders, which could subsequently be enforced if and when insurers were traced. Difficulties in tracing the insurers might conceivably have become relevant if Messrs Thompsons had intimated the claim as soon as Mr Ferguson instructed them in 2006. However they had not done so. The Lord Ordinary ought, in the circumstances, to have held that there had been no early notice and no “windfall” to the defenders or their insurers (contrast with the circumstances in Cain v Francis [2009] QB 754). There had been no actings on the part of the insurers prior to the expiry of the triennium which might have provided a basis for a decision against them. The head-note in a House of Lords authority (Horton v Sadler [2007] 1 AC 307) accurately reflected the principles applicable.
IV The test for the appeal court
[22] It was accepted that it was not the function of the appeal court to interfere with the Lord Ordinary’s exercise of discretion merely upon the basis that the appeal court would have exercised its discretion differently (G v G (Minors: Custody Appeal) [1985] 1 WLR 647 at pages 651-653). The appeal court might intervene if it was satisfied that the Lord Ordinary had not exercised his discretion at all; or in exercising it, he had misdirected himself in law; or had misunderstood or misused the evidence or the material factors before him; or the Lord Ordinary had taken into account an irrelevant consideration; or had failed to take into account some relevant consideration; or if his conclusion was such that, although no erroneous assumption of law or fact could be identified, he must have exercised his discretion wrongly. Further, the appeal court might intervene where it was satisfied that the Lord Ordinary’s conclusion was vitiated by an error in weighing the relevant considerations, by giving too much or too little weight to one or more of them. In short, the test was whether his conclusion was “plainly wrong”.
[23] It was important that, in this particular case, the decision taken by the Lord Ordinary did not depend to any material extent upon his having seen and heard the two witnesses who gave evidence.
V What the Lord Ordinary did
[24] It was submitted that the Lord Ordinary erred by taking into account the question of insurance, and the fact that there was difficulty in tracing the relevant insurers. The solicitors’ duty (whether acting speculatively or not) was to obtain a decree in absence against the correct defenders, which they could subsequently enforce against the relevant insurance company if and when traced. Thus the Lord Ordinary erred in (a) taking into account the defenders’ insurance position, a fortiori when the relevant insurer had not become visible during the triennium – for example, by acknowledging liability, or making an interim payment; (b) taking into account the fact that the solicitors were acting speculatively, on a “no win, no fee” basis; (c) comparing the current position with what would have happened if proceedings had been raised initially against the correct defenders; (d) giving insufficient weight to the errors made by Messrs Thompsons; and (e) giving insufficient weight to the prejudice suffered by the defenders if the pursuers’ action were permitted to proceed. In particular, after such a passage of time, the defenders could not properly defend themselves, as evidence was no longer available. The directors were untraceable, presumably dead. The late Mr Ferguson died before his evidence could be taken on commission. The allegation of negligent exposure was vague and almost impossible to investigate due to the passage of time, the destruction of records, and the reconfiguring of the defenders’ former premises. Also the defenders could no longer seek relief from M & N.
VI Why the action ought to be dismissed
[25] On the assumption that the appeal court accepted that the Lord Ordinary had erred, the interlocutor of 30 August 2013 should be recalled, and the action dismissed, for several reasons:
[26] Even if the pleadings disclosed a prima facie case, it was a weak case. Mr Ferguson was a joiner who worked on the construction of new houses, dealing with asbestos soffits and other items. This was not a case in which the deceased had been one of the “white mice” of the Clydeside shipyards.
[27] There was a strong case based on negligence against Messrs Thompsons. It was well within the knowledge of a competent solicitor that an action should be raised timeously against the appropriate defender in order to protect the clients’ interests (Leith v Grampian University Hospital NHS Trust [2005] CSOH 20, paragraph [12]; Fleming v Keiller [2006] CSOH 163).
[28] Importantly, the defenders would suffer considerable prejudice if the action was permitted to proceed. They had no means of properly defending themselves. Their records had been destroyed; their directors were deceased; it would not be possible to test the deceased’s evidence (either on commission, or during any proof).
[29] Further, the defenders had lost any right of relief against M & N. That company had been dissolved on 22 January 1991, restored to the register on 26 August 2009, and dissolved again on 5 April 2011. No contribution by M & N to any award of damages could be expected.
[30] In all the circumstances, the reclaiming motion should be allowed, the Lord Ordinary’s interlocutor dated 30 August 2013 recalled, and the action dismissed.
Submissions for the pursuers
[31] Senior counsel invited the court to refuse the reclaiming motion and to adhere to the interlocutor of the Lord Ordinary. The statute gave the Lord Ordinary an “unfettered discretion” (Donald v Rutherford at page 75). As was recognised in Forsyth v A F Stoddard & Co Ltd 1985 SLT 51 at page 3, the test in the appeal court was not primo loco whether the appeal court thought it equitable that the action be allowed to proceed, but whether the Lord Ordinary had misdirected himself in law, or transgressed in some other way. The appeal court could interfere only if the judge at first instance had gone “plainly wrong”. The defenders had failed to satisfy that test.
[32] The Lord Ordinary dealt with the question of insurance in paragraph [13] of his opinion. He was entitled to take the approach he did in the circumstances of this particular case. In a situation where the defenders were no longer in existence, the existence or non‑existence of an insurer was a relevant part of the factual background. The pursuers’ explanation giving a reason for the time when the present action was raised was part of the relevant history which the Lord Ordinary was entitled to take into account. The circumstances and ratios in Fleming v Keiller and Kelly v Bastible and others were different, and could be distinguished. The key issue was prejudice: what actual prejudice would be suffered by the defenders because of the delay in raising proceedings, above and beyond losing a cast‑iron time‑bar defence (AS v Poor Sisters of Nazareth paragraph [25]; Cain v Francis paragraph [57]; Collins paragraphs [72] and [73]). In the present case, the insurers learned of the claim for the first time in September 2011. As counsel for the defenders very properly accepted, it could not be said that there was any greater difficulty for the defenders investigating events now than in 2011 (two and a half years ago).
[33] The defenders contended that the Lord Ordinary had not dealt with the issue of a possible negligence claim against Messrs Thompsons. However a judge at first instance must be assumed to take into account the whole evidence (Thomas v Thomas 1947 SC (HL) 45 at page 61). Section 19A applications frequently involved prima facie failures on the part of solicitors. This case was no exception. Much of the evidence led during the proof concerned Messrs Thompsons’ failures. Counsel for the defenders had subjected Mrs Blane to rigorous cross‑examination concerning her firm’s conduct of the case. It was inconceivable that the Lord Ordinary had not considered the issue of the solicitors’ negligence, and he could not be said to have been “plainly wrong” simply because he had focused upon the peculiar
circumstances of the case and had not expressly mentioned a possible action for negligence against the solicitors.
[34] As for the alleged prejudice said to arise from losing a right of relief against M & N: there had been little emphasis on that matter before the Lord Ordinary. It seemed relatively plain that, for the purposes of a personal injuries claim, the company could be restored to the register: sections 1029(2), 1030(4)(f) of the Companies Act 2006 (i.e. a time‑period of 6 years from the date of the last dissolution on 5 April 2011).
[35] Nor could the Lord Ordinary’s ratio decidendi be said to rest upon the speculative funding of the action. That factor did not weigh with the Lord Ordinary in the exercise of his discretion.
[36] Finally, the Lord Ordinary had been entitled to observe that the defenders were now “in a sense” in a better position than they would have been if the first action had been directed against the correct party, for the defenders might have had to seek reduction of the decree in absence before taking any further steps.
[37] The defenders had not demonstrated that the Lord Ordinary was “plainly wrong” such that his decision was vitiated. The Lord Ordinary had an unfettered discretion, and was entitled to leave certain things out of account, and to give greater weight to certain matters. In this particular case, there was no prejudice to the defenders other than their loss of a cast‑iron defence of time-bar. The defenders had not identified such a clear error in law as to vitiate his decision. The reclaiming motion should be refused. Esto there had been any misdirection or failure to take into account a relevant factor, there could be a re-assessment by the appeal court (Donald v Rutherford at page 77).
Final reply for the defenders
[38] It was far from clear whether M & N could be restored to the register. Any right of relief against M & N was not an action of personal injuries, but rather one of contribution between wrong‑doers in terms of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1940. In making any application for restoration, the defenders would have to persuade a court that there was a valid claim against M & N, i.e. establishing on a balance of probabilities that M & N were not only negligent but that harm was caused. But there were no records, and the directors were deceased: the only possible evidence would be the late Mr Ferguson’s precognition. The task facing the defenders seeking to restore M & N to the register would be heavier than that faced by the pursuers if they were to seek such a restoration.
Discussion
[39] Section 19A of the Prescription and Limitation (Scotland) Act 1973, as amended, provides:
“Power of court to override time‑limits etc
(1) Where a person would be entitled, but for any of the provisions of section 17, 18, 18A or 18B of this Act, to bring an action, the court may, if it seems to it equitable to do so, allow him to bring the action notwithstanding that provision …”
[40] As Lord Cameron explained in Donald v Rutherford 1984 SLT 70 at page 75:
“ … No doubt the exercise of the unfettered discretion conferred on the court by s 19A(1) in favour of a pursuer does, in any particular case, in a sense drive a coach and six through the provisions of the earlier protective sections of the Act of 1973, but that is no more than expressing in a vivid and picturesque phrase what is the effect of a decision to permit a time-barred action to proceed. At the same time I must emphasise that the discretion of the court is unfettered, although in every case the relaxation of the statutory bar can and must depend solely upon equitable considerations relevant to the exercise of a discretionary jurisdiction in the particular case, having regard to the fact that it is for the party seeking relief to satisfy the court that it is, in the view of the court and in the circumstances of the case and of the legitimate rights and interests of the parties equitable to do so. I do not think that what was said by Lord Ross [in Carson v Howard Doris 1981 SLT 273] should or could properly be interpreted as implying that he was seeking to place fetters on or limit the ambit of the equitable jurisdiction conferred on the court by s 19A, or in any way to run counter to what was said in Firman v Ellis or Thompson v Brown. But the primary issue is not whether this court considers it equitable to permit the action to proceed, but whether the Lord Ordinary in the exercise of a discretion unfettered by definition, had misdirected himself in law or otherwise transgressed the limits of the discretion reposed in him so as to permit an appellate court to intervene and set aside his decision. It is only in such circumstances that this court would be entitled to intervene and on the only material available to it, of new to consider the question which the statute poses. But while the discretion is, in my opinion, unfettered, it must necessarily be exercised within certain limits and those limits must be as set by the circumstances of the particular case. The relative weight to be given to any particular circumstance must be for the court required to exercise the discretion to determine. The language of section 19A, in my opinion, plainly carries the implication that it is for the pursuer in such a time‑barred action to satisfy the court of the equity of his claim to be allowed to proceed, and consequently for the court to proceed from that point of departure. At the same time equity requires that an equitable decision should be one which proceeds on a fair balancing of the interests and conduct of the parties and their advisers, as well as the nature and circumstances and prospects of success in pursuit of the time‑barred claim itself. But the attention to be paid and the weight to be given to these various considerations are for the court vested in this jurisdiction, as well as the balancing of the degree of prejudice which either party may be expected to suffer according as the court decides …”
[41] Furthermore Lord Justice‑Clerk Wheatley noted in Forsyth v A F Stoddard & Co Ltd 1985 SLT 51 at page 53:
“ … there is no restrictive table of considerations. Each case has to be decided on its own facts, and as long as a fact or a consideration is relevant it should be considered. There may be factors that are unique to a particular case. Moreover a particular fact or factor may carry more or less weight in separate cases. It is for the judge to determine the weight to be given to a fact or factor in all the circumstances of the case. Against that background, expressions of opinion such as the power conferred on the judge by s 19A(1) should be exercised sparingly and with restraint, or should be regarded as exceptional, are inapposite, as they seem to be restrictive of the unfettered discretion granted and of the test to be applied. And when this matter is brought before the appeal court the test is not primo loco whether that court considers it equitable to permit the action to proceed but is whether the judge in the court below in the exercise of his unfettered discretion has misdirected himself in law or otherwise transgressed the limits of discretion reposed in him so as to permit an appellate court to intervene and set aside his decision. It is only in such circumstances that the appeal court is entitled to intervene and, on the material available to it, of new to consider the question which the statute poses (cf Lord Cameron in Donald v Rutherford at p 75).”
[42] In this case, the defenders contend that in all the circumstances “the Lord Ordinary was plainly wrong to hold that it was equitable to allow the present action to proceed” (paragraph 28 of the defenders’ note of argument and the oral submissions noted in paragraph [22] above). The proper meaning of a Lord Ordinary being “plainly wrong” was recently revisited in the Supreme Court in the appeal Liquidator of Letham Grange Development Co Ltd v Foxworth Investments Ltd 2014 SLT 775. At paragraphs [62] et seq Lord Reed gave the following guidance:
“[62] … there may be some value in considering the meaning of [the phrase ‘plainly wrong’]. There is a risk that it may be misunderstood. The adverb ‘plainly’ does not refer to the degree of confidence felt by the appellate court that it would not have reached the same conclusion as the trial judge. It does not matter, with whatever degree of certainty, that the appellate court considers that it would have reached a different conclusion. What matters is whether the decision under appeal is one that no reasonable judge could have reached …
[66] … Consistently with the approach adopted by Lord Thankerton [in Thomas v Thomas 1947 SC(HL) 45] in particular, the phrase can be understood as signifying that the decision of the trial judge cannot reasonably be explained or justified.
[67] It follows that, in the absence of some other identifiable error, such as (without attempting an exhaustive account) a material error of law, or the making of a critical finding of fact which has no basis in the evidence, or a demonstrable failure to consider relevant evidence, an appellate court will interfere with the findings of fact made by a trial judge only if it is satisfied that his decision cannot reasonably be explained or justified.”
[43] In this case, the Lord Ordinary heard evidence from witnesses, examined productions, heard submissions, and then, on the basis of the factual position as determined by him, carried out the balancing of the various factors in the exercise of his unfettered discretion in terms of section 19A of the Prescription and Limitation (Scotland) Act 1973 – in the course of which the question of the weight to be given to each factor was a matter for the Lord Ordinary (Donald v Rutherford, Forsyth v A F Stoddard & Co Ltd). In our view therefore the defenders face a very high test in order to satisfy this court that the Lord Ordinary went “plainly wrong”, even bearing in mind the general strictures about the effect of delay on the quality of justice, all as described by McHugh J in Brisbane Regional Health Authority v Taylor [1996] 186 CLR 541, referred to with approval in B v Murray (No 2) 2005 SLT 982, paragraph [21] et seq.
[44] We are not persuaded that the high test has been met in this case. We consider that it was necessary for the Lord Ordinary to explore and set out the circumstances leading to the raising of the action outwith the triennium. Those circumstances included the difficulties faced by the pursuers’ solicitors as a result of the passage of time since the alleged negligent exposure, the lack of any easily accessible or positive information in the course of the resultant investigations, the speculative basis of the funding for the action, and the fact that information about the identity of a relevant insurer became available only in September 2011. Without such an exploration and investigation of the background and circumstances of the case, the current application in terms of section 19A could not be accurately or properly assessed.
[45] In relation to the criticism of the Lord Ordinary for having taken into account the fact that the defenders were insured, we note that he did not rely on that fact as countering any prejudicial effect of exercising the equitable discretion. Had he done so, the criticism might have been justified. However, properly understood, the Lord Ordinary’s observations regarding insurance were in the context of considering whether or not a reasonable explanation had been provided for the delay that had occurred. That was, plainly a relevant consideration. In relation to the criticism of the Lord Ordinary for taking into account the fact that Messrs Thompsons were acting on a speculative basis, we accept that this would be an irrelevant factor. However the Lord Ordinary mentions it only in passing: no significant weight is attached to it. In relation to the criticism of the Lord Ordinary for concluding that the defenders’ insurers are in a better position than they would have been had they required to reduce a decree in absence, this is a view which it cannot be said that he was not entitled to hold. Whilst the opposite view, as articulated by counsel for the defenders, was equally valid, it cannot be said that the Lord Ordinary erred in law by viewing matters as he did.
[46] Further we do not accept that the Lord Ordinary’s exploration and setting out of the background and circumstances resulted in any error on his part such as is referred to by Lord Reed in Liquidator of Letham Grange Development Co Ltd. As was made clear in Thomas v Thomas 1947 SC (HL) 45, at page 61, the Lord Ordinary must be assumed to have taken the whole of the evidence into his consideration – including factors such as the many opportunities to correct the error in the name of the company, the possibility of an action of negligence against Messrs Thompsons, the fact that M & N were not included as defenders in the second action, and the question of prejudice to the defenders in the event that the action were allowed to proceed (which question is very much a matter for the court carrying out the balancing exercise to weigh up and assess: Collins v Secretary of State for Business Innovation and Skills, cit sup, paragraph 66). It cannot be said that the Lord Ordinary had no regard to the fault of the solicitor, but in any event the presence of such fault is never conclusive in an application under section 19A. The weight to be given to each factor is a matter for the Lord Ordinary (Donald v Rutherford at page 75). For example, as Lord Hope of Craighead noted in AS v Poor Sisters of Nazareth 2008 SC (HL) 146 at paragraph 25:
“ … [whether the defender will be exposed to the real possibility of significant prejudice] is a question of degree for the judge by whom the discretion under sec 19A is to be exercised.”
[47] Taking into account the facts found by the Lord Ordinary, the submissions made to him (paragraphs [11] and [12] of his opinion), and the conclusion reached by the Lord Ordinary, we are not persuaded that the defenders have demonstrated that the Lord Ordinary made a material error of law, or made a critical finding of fact which has no basis in the evidence, or showed a demonstrable misunderstanding of relevant evidence, or displayed a demonstrable failure to consider relevant evidence, or reached a decision which cannot reasonably be explained or justified.
[48] We shall therefore refuse the reclaiming motion, and adhere to the interlocutor of the Lord Ordinary dated 30 August 2013.
[49] Esto we are wrong in the above approach, and esto the Lord Ordinary erred, it is our opinion that it is for this court to re-assess the circumstances of the case for the purposes of section 19A (Donald v Rutherford cit sup at page 75; Forsyth v A F Stoddard & Co Ltd cit sup at page 53). In carrying out that exercise we take into account inter alia the following factors.
[50] The most significant argument in favour of the defenders is the fact that they will be prejudiced if the action were to be allowed to proceed: they will lose a cast-iron defence to the pursuers’ claim for damages.
[51] On the other hand, arguments in favour of the pursuers include the following:
(i) The present case is a classic asbestos‑exposure case, in that the alleged negligent exposure occurred many years ago (over 30 years). Such cases are sometimes referred to as “long-tail” disease cases: cf Collins v Secretary of State for Business Innovation and Skills cit sup paragraph 65. Accordingly as at the date of Mr Ferguson’s death on 31 August 2006, there were already difficulties for everyone concerned in relation to investigations of facts, identifying the proper defender and any relevant insurance cover, finding records, tracing and precognoscing witnesses, and bringing matters to a fair and satisfactory conclusion. Those same difficulties existed in 2006, 2009, 2011, 2012, and as at today’s date. In our view therefore the defenders have failed to demonstrate a real possibility of significant prejudice caused by the delay in bringing the present proceedings (Lord Hope at paragraph [25] of AS v Poor Sisters of Nazareth 2008 SC (HL) 146).
(ii) The pursuers’ agents faced these difficulties when they undertook the case, initially on behalf of the late Mr Ferguson in person, and subsequently on behalf of his family. Their inquiries were often met with negative or limited responses. They had to persist in the face of obstacles and difficulties. They put significant effort into tracing the correct defender and the correct insurer, both of which were necessary avenues of inquiry. They were very conscious of the triennium and its expiry date. The name “J & A Lawson Limited” was, unfortunately, inserted in the summons, rather than the correct name “J & A Lawson (Joiners) Limited”. The error had major repercussions, as the triennium expired a few days after service, and it is possible that a claim against Messrs Thompsons for professional negligence might succeed. But it is of note that Messrs Thompsons were not the only persons who had used the wrong name. “J & A Lawson” was the employer’s name provided by HMRC; the witness Ian Porter used the name “J & A Lawson”; and AGF’s solicitor herself used that designation in her e‑mail of 7 October 2011 when confirming that she had received instructions in relation to this claim.
(iii) The pursuers have averred a prima facie case in statement IV of the summons. It is said that, when working for the defenders, the late Mr Ferguson was engaged in carrying, sawing, and fitting asbestos soffits to roofs, during which activities asbestos dust was given off. It is also said that he did some work in the defenders’ workshop, where asbestolux sheeting was cut using a circular saw. It is averred that no protective masks or warnings were given, and no ventilation system was provided in the workshop. There is a witness (Ian Porter) who is able to describe the working conditions in the workshop. The case against these defenders does not, in our view, seem to be any weaker than the case pled against M & N in statement IV of the summons (relating to Mr Ferguson looking after the boiler‑house in the American School).
(iv) The defenders aver in answer 6:
“ … In the event that the pursuers establish liability against the defenders, the potential value of the pursuers’ claims are higher than they would have been had the action been raised timeously. The pursuers’ claims are now based on the Damages (Scotland) Act 2011. Accordingly the second pursuer [the late Mr Ferguson’s widow] is entitled to claim 75% of the deceased’s income by way of loss of support …”
However senior counsel for the pursuers stated to this court that the pursuers gave the Lord Ordinary an undertaking that they would seek damages at the pre‑2011 Act level. In our opinion, that is a significant undertaking.
(v) Finally, it is our view that it is for the defenders to take such steps as they consider necessary to obtain relief against any another employer of the late Mr Ferguson. They have various options open to them, including seeking to have companies restored to the register. Those options have not closed as a result of the action being raised in 2012 rather than 2009.
[52] In the result, it is our opinion that it would be equitable to allow this action to proceed.
Decision
[53] We shall refuse the reclaiming motion and adhere to the interlocutor of the Lord Ordinary dated 30 August 2013. We continue the question of the expenses of the reclaiming motion.