Insurers may see increased exposure on employers' liability policies in 2010, particularly related to noise-related personal injuries, as the effects of the so-called textile deafness test litigation are felt in the industry.

In Baker v Quantum Clothing Group [2009] EWCA Civ 499 the Court of Appeal held that an employer's liability for noise-induced hearing loss could arise 12 years earlier than had previously been thought. Further, the Court held that the burden of proof fell on the employer to show that they had taken all reasonably practicable steps to ensure workplace safety, an element of the decision that could have wider ramifications beyond deafness claims.

In Baker, seven out of several hundred claims for noise induced hearing loss were selected to be litigated in the High Court in Nottingham. Most of the original claimants had worked in the Midlands' knitting and hosiery industries. They contended that liability arose under common law and under s.29(1) of the Factories Act 1961, which imposes a duty to provide a safe place of work. The trial judge held that noise levels below 85 dBA were not actionable and levels of between 85 and 90 dBA were not unsafe either under common law or under the section 29 duty with regard to the safety standards of the day. Six of the seven claims were dismissed because claimants failed to establish either hearing loss or exposure to noise levels of 85 dBA or above. The remaining claim, that of Stephanie Baker, was dismissed because of failure to establish breach of duty at both common law and under s.29.

Mrs Baker's appeal was allowed by the Court of Appeal. Smith LJ, who gave the lead judgment, said the duty under s.29 to provide a safe place of work was absolute, subject to the defence of reasonable practicability, which must be pleaded and supported by evidence. She held that if workplace safety was to be judged objectively, it could not depend on what society at that time considered to be acceptable or safe. What was reasonably practicable should not depend on consideration of an acceptable risk that justified inaction; it should depend on the quantum of risk posed balanced against the disadvantage of eliminating that risk (eg with ear protection, which in this case would have been an easy remedy). This meant that modern day standards regarding noise levels (imposed by statute in 1990) were deemed to be applicable from 1978 onwards. This is because the Department of Employment Code of Practice 1972 should have made employers aware of the problem of noise by 1973, and then safety standards published in 1976 would have made it possible to assess the quantum of the risk and subsequently establish controls.

For insurers defending such claims, it is important that reasonable practicability should be pleaded in a defence or referred to when denying liability under an employers' liability policy. The employer must do what is reasonably practicable and, importantly, has the burden of showing why any action that would minimise the risk is not reasonably practicable. This does not mean that an unforeseeable risk should be protected against as reasonable foresight will still help decide whether the duty has been discharged. Further, the judgment will only apply to claimants whose symptoms appeared within the limitation period and prove causation. In this case six of the seven claimants failed to pass this first hurdle.

The respondents in the case have been given permission to appeal to the Supreme Court and the hearing is expected to take place sometime this year.