The passive killer

Asbestosis killed off much of the casualty market in the US and UK and virtually brought down Lloyd's after hundreds of secure years. Is passive smoking another 'smoking gun' about to bring further serious trauma to the employers' liability and public liability markets?

The situation is being calmly ignored for the time being because of the absence of a test case on causation and connection to duty of care. Some solace was also taken from the recent case of Anne Muir who bought a claim for tonsillitis, laryngitis and nodules against her employers and lost.

It was a case of vocal cord damage allegedly caused by passive smoking. The reason this went to court is the relatively obscure prognosis. If the case had been lung cancer or heart disease based, the insurers would almost certainly have settled out of court therefore no contrary conclusion can be based on this judgment.

There are currently many claims being bought off to avoid an increase in awareness and effectively hold back the floodgates. Why? The reason is simple. If the principle of causation is established very nearly every patient with lung cancer could seek to claim passive smoking at the workplace or public place as at least a contributory cause especially but not exclusively non-smokers.

In many cases, particularly bar staff, it might well be possible to prove it as the principal cause. In addition many who suffer with heart disease and the estates of those deceased from heart disease would be able to take the same course. This adds up by some calculations to a potential exposure of billions for the casualty market.

There are a number of test cases being pressed forward currently by both unions and Ash the Action on Smoking and Health organisation. Leading defendant lawyers are pressing insurers to defend on the basis that it will be impossible to make the proven link to passive smoking. However, the medical evidence is now very strong and defendant lawyers have a reputation for preferring to defend because that is what they do.

Insurers will continue to seek to buy out claimants whenever possible. Unions are expected to force a test case out of one of the upcoming bar staff actions. One would anticipate that they will be selective and once an established precedent exists there is a clear scenario for the market to face a floodgate situation.

Just to reflect on the gravity of the potential facing insurers it is relevant to look at what is passive smoking. Simply passive smoking means breathing in other people's tobacco smoke. Sidestream which comes from the burning tip of the cigarette is the main offender

At present the NHS is running a pretty explicit poster campaign. In children's handwriting it states: "If you Smoke, I Do." Exposure to passive smoking increases the risk of chronic breathing problems in young children by at least 50% and by 300% for children under six months. This campaign follows the strong evidence that passive smokers are inclined to get the same health problems as smokers.

Women expose
They are 26% more likely to get lung cancer than those not exposed to cigarette smoke. Post mortems of non-smoking women who lived with smokers show they have a higher incidence of precancerous tissue than their cleaner living sisters.

Those suffering from asthma attacks will suffer more from passive smoking and find it harder to recover. Passive smokers are 25% more likely to develop respiratory illnesses and heart disease.

In one investigation by the London Evening Standard it was shown that non-smoking drinkers in some bars absorbed the equivalent of one cigarette's worth of nicotine every three hours.

This suggested that someone who went to smokey bars twice a week passively smoked 100 cigarettes a year. The risk for professional bar staff is of course considerably higher.

In Australia, it is claimed that five bar staff a month are killed each month by passive smoking. At present, the class action of 60,000 non-smoking flight attendants suing tobacco companies for ill health caused by passive smoking is going through the US courts.

Since the banning of smoking at the work place is relatively recent, the expectations are that many more such class action cases will appear on both sides of the Atlantic.

In a major survey by Harvard School of Public Health of over 32,000 non-smoking nurses it was shown that non-smoking women who were exposed to a smoker at home or in the work place had a 91% greater risk of a heart attack, a much higher figure than other studies, but a much larger sampling.

It is worth noting the exposure at the working place would be substantially lower for nursing care workers than bar, restaurant and hotel workers.

Widely banne

Based on the above it is easy to see why certain pub owners have been only too happy to ban smoking in their premises in advance of legislation. It is also no coincidence that it is in the US and Ireland where the compensation culture is most rooted. Cigarette smoking in most buildings open to the public has been banned widely in the US and totally in Ireland.

The grounds given by the Irish government for such a major move in a country famous for its hospitality in bars was the protection of employees at the workplace.

Trade union lawyers Thompson's claim to have 40 cases waiting to go to court and while they express confidence, cases will fail because there are other reasons for these diseases besides passive smoking.

Nevertheless, few doubt that a tidal wave is in the offing. There is now less than 40% of the adult population smoking and while more care is taken at the place of work for the majority the damage is already done and there are also the hot spots of pub bars etc where little has changed.

Insurers should have in mind that any non-smoker is a potential claimant and that is a large bucket load of potential!

What do we conclude from all of this? Do the balance sheets of insurers reflect this potential, has anyone examined the exposure on an IBNR (incurred but not reported) basis?

The market should learn the lessons of asbestosis and seek as early as possible to establish a structured strategy for meeting the genuine claims with agreed procedures for sifting the evidence and designating multi party handling agreements.

This open approach sharing expertise might help to protect the market against a looming catastrophe. IT

' Alan Speyer is a director of FitzGerald Consulting