Following a hearing on 5 October 2016, the Court of Appeal refused the Claimants' request for permission to appeal the first instance decision of Mr Justice Jay dismissing all 16,626 claims.

After hearing detailed arguments, Lord Justice Tomlinson and Lord Justice Lindblom emphatically concluded that the appeals had no real prospect of success and should go no further.

Hugh Mullins at Clyde & Co who led the defence team comments:

"The first instance decision was hugely significant and we are delighted that the Court of Appeal has robustly endorsed it".

Last year, in a hugely significant judgment for the insurance industry, Clyde & Co successfully defended the damages claims of 16,626 claimants alleging personal injuries and other losses from smoke exposure, following a fire in June 2011 at the premises of Sonae Industria (UK) Limited in Kirkby, Merseyside.

The Court at first instance rejected the claims of local residents and found that levels of smoke exposure were not sufficient to endanger health. The judgment followed a four-week trial in Liverpool in June 2015, in which the court considered extensive scientific and medical evidence and 20 representative test claims.

Mr Justice Jay found in favour of Sonae Industria on all issues. The judge described ‘serious weaknesses in the claimants’ overall case, and said: “Human beings are naturally susceptible and suggestible, particularly if they are made to believe that they form part of a coherent group with shared experiences, and if they risk none of their own resources in bringing a claim… Many of the questionnaires examined in the context of the test claimants were shown to be inaccurate and exaggerated, calling into question the objectivity and integrity of the whole process.” The damages and costs if the claimants were successful had been estimated by their lawyers to be in the order of £100 million.

Documents submitted in support of two of the 20 test cases were found by Mr Justice Jay to “bear forged signatures”. The two firms of solicitors acting for those claimants, GT Law and Walter Barr Solicitors, were reported by the judge to the Solicitors Regulatory Authority in connection with this. In another test case the judge found that the claim was brought fraudulently. GT Law went into administration after being referred to the SRA following this case.

The judge said that some clients had been signed up to claim on the basis of misleading information, which had the “obvious tendency to encourage the bringing of claims, on the basis that the defendant was a soft target and this was easy money... Whole families have been signed up, apparently willy-nilly, to the group”. He strongly deprecated the practice: “Not merely does it sail close to the wind in terms of its professional propriety, it is severely counterproductive as and when the case comes to trial”.

The practical challenge in this case was to present to the Court a scientific analysis as to what occurred and the potential consequences to counter the anecdotal and elaborate evidence of exposure given by the claimants. Where statements have clearly been drafted by claimant solicitors, issue should be raised with this in cross-examination. If the sections manufactured by the claimant solicitor are central to the issues in dispute this can significantly undermine the claimant’s case. A robust approach is vital in such cases. The costs potential was extraordinarily high, but a message has been sent to claimant lawyers and indeed the decision has been welcomed by a number of claimant lawyers.