As the smoke clears

' Although we are becoming an increasingly smoke-free society, employers and insurance companies are likely to continue holding their breath for the time being.

The ban on smoking in workplaces and enclosed public spaces, enshrined in the Health Act (2006), will come into force in England on 1 July this year. The ban in Scotland took effect almost a year ago and separate measures are planned for April 2007 in Wales and Northern Ireland.

Despite the anticipated health benefits, smoke exposure over previous years may yet be problematic for employers, since publicity of the issue is expected to cause a rise in legal cases about passive smoking.

The common belief, increasingly backed by scientific evidence, is that secondhand smoke is damaging to the health of non-smokers. The government's advisers, the Scientific Committee on Tobacco and Health, reported in November 2004 that exposure to secondhand smoke was a serious health risk to non-smokers, increasing their chance of contracting lung cancer and heart disease by about a quarter.

Data published by the British Medical Journal in 2005 showed that passive smoking is responsible for an estimated 617 deaths per year in the workplace, including 54 deaths a year among people employed in the hospitality industry.

Perhaps more significant from a claims viewpoint is the estimated three million people in the UK exposed to secondhand smoke at work.

While there is no specific legislation dealing with passive smoking in the workplace, it is doubtless covered by an employer's general duty to provide a safe place of work under the Health and Safety at Work Act (1974).

As with all industrial disease cases, employees would first have to show that they had become ill as a result of inhaling secondhand smoke at work. They would then need to prove that the exposure took place at a time when their employer knew (or should have known) that it could be harmful - the concept of "guilty knowledge".

In 1998, the Action on Smoking and Health (ASH) obtained a legal opinion which suggested that the date of guilty knowledge in respect of secondhand smoke would be likely to be held by the courts as sometime in the early 1990s.

There has yet to be a test case on the principle of causation and this is expected to be a key issue - and perhaps a strong defence - given that cited illnesses could have various causes and claimants may have been exposed to smoke in numerous environments.

Although there has not been a successful case, there are many more in the pipeline and both ASH and a number of unions are seeking to set a precedent. Some claims have already been settled out of court, including an award of £50,000 to a London casino worker who developed asthma.

Is illness related to passive smoking the next 'long-tail disease'? Parallels have already been drawn with asbestosis claims, and is a clear warning of the potential size of this issue and of the need to develop a robust claims handling process.

Employers have a duty of care and should be assessing, and consulting over, the liability risk. Particularly in the hospitality and leisure industries, employers should be mindful of the growing links between secondhand smoke and ill health and ensure that reasonable steps are taken to protect employees. For example, adequate ventilation, staff rota systems and strict policing of non-smoking areas - especially at the bar in pubs and clubs.

It is becoming apparent that the potential liability for employers is considerable. As the smoke clears, employers need to be well prepared to face this prospect. IT

' Gavin Dollings is casualty manager at Allianz Cornhill Commercial