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OXFORD, England -- A proposal to broaden the legal definition of psychiatric illness may open a floodgate of claims in U.K. courts, leading to greater liability exposures.

A Law Commission report issued earlier this year identified some disparities in the current legal treatment of psychiatric illnesses and has made recommendations widening the range of individuals who may claim damages, said Dr. Adela Williams, a solicitor with London-based law firm Cameron McKenna.

Speaking at the Fifth Liability Insurance Conference in Oxford earlier this month, organized by the Training Centre, Lloyd's, Dr. Williams explained that situations such as the 1989 Hillsborough football stadium disaster, where dozens of people died in a crowding incident (BI, June 10, 1996), had brought the issue of psychiatric claims to the fore.

Although relatives of people who had died or been injured at Hillsborough had witnessed the incident on live television and later identified the victims, they were not legally entitled to compensation for any consequent psychiatric illness. Police officers on duty generally did receive damages.

This was because the law currently in force for so-called secondary victims -- those not directly involved in the incident -- has evolved in piecemeal fashion. Dr. Anthony Barton, a partner at Cameron McKenna, summarized the current requirements as:

* The secondary victim must have sustained a recognized psychiatric illness.

* Psychiatric illness was reasonably foreseeable.

* The relationship between the secondary victim and the primary victim must be one of closeness based on ties of love and affection.

* There must be a shocking or traumatic event.

* There must be proximity in space and time of the secondary victim to the shocking event.

* The psychiatric illness must have been caused by the shocking events.

"Although these legal principles are readily stated, their application in fact is a matter of degree," explained Dr. Barton. "Accordingly, the application of the law in this area gives rise to massive difficulties" for both claimants and defendants.

In addition, new causes of action such as potential exposure to AIDS or Creutzfeldt-Jakob disease -- a form of the so-called mad cow disease that affects humans -- have opened up new areas of litigation where the risk of physical harm has led to psychiatric injury, though no physical injury has been sustained.

"Such claims can be potentially very wide since the concept of safety in relation to consumer products is relative rather than absolute -- any consumer product can be associated with some risk," he said.

As a result, U.K. risk managers will have to be more diligent in identifying and trying to prevent foreseeably harmful events.

These types of issues triggered the Law Commission's report this year -- and led it to advise that legislation addressing the universe of psychiatric injury claims was not the way forward, said Dr. Williams. Instead, the commission "felt it was important that the law should be able to develop incrementally to reflect medical and sociological advances," she explained. Nevertheless, the Law Commission identified certain areas where the law was "developing in an inappropriate direction," she said.

In particular, it recommended that the "shock requirement" be dropped, since in certain circumstances psychiatric illness from an event can develop over time. At the same time, the Law Commission recognized that removing the shock requirement may increase the number of claims and that in circumstances where the illness develops over a period, it may be difficult to prove it is due to the particular incident.

The Law Commission also strengthened the legal claims of secondary victims, taking the view that "there was little evidence justifying a distinction between those plaintiffs who came within the area of physical danger to justify treating them differently from those who were not within the area of physical danger but suffered psychiatric illness," she said.

It also said the proximity requirements should be removed for all secondary victims where there is a close tie of love and affection.