24 MAY 2016
Daniel Greenway and Others v Johnson Matthey Plc  EWCA Civ 408
Duty of care – pure economic loss – contract – employers’ liability
23 February 2016
Court of Appeal: Mr Justice Hay
The claimants sought to appeal the decision of the trial judge on the issue of liability, which found that the defendant was not liable for damages for breach of statutory duty, negligence or breach of contract arising out of their employment by the defendant. The claimants had suffered platinum sensitisation during the course of their employment and claimed significant loss of earnings due to no longer being able to work within the same environment. The appellate court dismissed the appeal, finding that the claimants had suffered no physical injury as necessary to give them a cause of action in tort, and that their claim was one for pure economic loss. Further, the losses that the claimants had suffered were held to fall outside the scope of the relevant contractual duty owed to them.
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Each of the claimants had worked for the defendant in factories making catalytic converters, the production process for which involved using platinum salts. The factories were not properly cleaned, and the claimants were exposed to platinum salts during the course of their employment to a greater extent than they should have been.
The claimants tested positive for platinum sentitisation as a result of the exposure to platinum salts and were removed from their workplace environment. Four of the claimants were dismissed or resigned, and all but one of these received the relevant ex gratia payments under the collective agreement terms. The first claimant remained employed by the defendant within a different work setting, and he claimed that he suffered financial loss through loss of promotion prospects.
The claimants brought proceedings against the defendant, arguing that they had suffered actionable physical injury because their bodies had undergone a physical change by acquiring platinum sentitisation. Further, this had adversely affected them as they had suffered significant loss of earnings as a result of losing their relatively high-paid jobs working within the areas of the factories whereby there was a known risk of exposure to platinum salts and in being unable to take up work in other environments where such exposure may arise.
An appellate court agreed with the judge's finding at trial that the claimants had not suffered an actionable injury, as in fact they were claiming damages for pure economic loss. The court relief on the reasoning in Rothwell v Chemical and Insulating Co Limited , which affirmed the conventional position that there must be a breach of duty causing material physical injury for a cause of action for damages for personal injury to arise. The court found that platinum sensitisation is not harmful in itself in any relevant sense, and that platinum sensitisation does not have symptoms, not does it create adverse effects for the individual in carrying on ordinary life.
The court then considered the claimants' claim in contract, upholding the trial judge's finding that the financial losses claimed were outside the scope of the respondent's contractual duty. The court relied upon South Australian Management Co. v York Montague  in holding that, both in contract and tort, the classical formulation of the duty owed by an employer to an employee is focused on protection from physical injury and not economic harm. Further, the defendant had already made specific provision in the collective agreement terms as to the extent of their responsibility for the financial welfare of employees, as far as it was affected by platinum sensitisation. The court found, therefore, that it was not fair, just or reasonable to hold the respondent liable for wider financial consequences.
In respect of the claimant's claim for pure economic loss, the court relied on Scally v Southern Health and Social Services Board , finding that, as there was no implied contractual term obliging the defendant to protect the claimants in relation to financial losses arising in the circumstances of the case, equally there could be no duty in tort to protect them in relation to the pure economic loss suffered by reason of those financial losses.
This judgment affirmed the importance of the requirement that actual physical injury must be suffered, which the court stated was 'deeply embedded in the law'. The court also emphasised the importance of certainty in this area of law, even if this means that the law does not provide a remedy for every harm suffered by an individual.
Kim Pryce and Victoria Brown, Anthony Gold