In a recent significant personal injury decision, the UK Supreme Court has dismissed an appeal by insurance companies in respect of asbestos injury claims. Upholding previous judgments, the Court confirmed that the ‘liability trigger’ under employers’ liability insurance for asbestos claims is when the employee is wrongfully exposed to asbestos, not at the moment when the disease subsequently manifests in the employee’s body. The decision clarifies that insurers may have to compensate employees of companies for asbestos-related diseases ‘contracted’ during a particular policy period e.g. when still in employment, rather than after the employment when the disease has manifested itself (which can sometimes be in excess of 40 years later).
The Legal Issues
The appeals raised two main issues:
(i) First, what was the correct construction of the terms ‘sustained’ or ‘contracted’ in respect of the employers’ liability policies?
(ii) Second, there was a question regarding whether the special rule in Fairchild/Barker applied when determining whether, for the purposes of the employers’ liability policies, an employee “sustained” or “contracted” mesothelioma during a particular policy period. (The usual rule under the law of negligence is that the claimant must establish that the defendant’s negligence caused the injury or disease on the balance of probabilities. In Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22 and Barker v Corus UK Ltd [2006] UKHL 20 the House of Lords created an exception for cases insolving mesothelioma caused by exposure to asbestos. The special rule states that an employer is liable where exposure to asbestos contributed to the risk that the employee would suffer mesothelioma and where the employee in fact develops the disease.)
The Judgment
The Supreme Court dismissed the insurers’ appeal by a 4-1 majority (Lord Phillips dissenting on the second issue). In the main judgment, Lord Mance stated (at [73] and [74]) that “these considerations justify a conclusion that, for the purposes of the insurances, liability for mesothelioma following upon exposure to asbestos created during an insurance period involves a sufficient “weak” or “broad” causal link for the disease to be regarded as “caused” within the insurance period. It would, I think, have been anomalous and unjust if the law by “deeming” there to have been causation of the disease could have created policy liability (which is common ground), but the law by insisting that the liability in respect of mesothelioma was for the risk of causation achieved a quite different result…For this purpose, the law accepts a weak or broad causal link. The link is to exposure which may but cannot be shown on the ordinary balance of probabilities to have played a role in the actual occurrence of the disease. But for the purposes of the policies the negligent exposure of an employee to asbestos can properly be described as having a sufficient causal link or being sufficiently causally connected with subsequently arising mesothelioma for the policies to respond. The concept of a disease being “caused” during the policy period must be interpreted sufficiently flexibly to embrace the role assigned to exposure by the rule in Fairchild and Barker.”
Comment
The decision is welcome news for thousands of mesothelioma victims in the UK, providing them with greater legal certainty in their insurance claims.
Expert personal injury lawyer Helen Ashton from Irwin Mitchell, who represented the lead claimant in the case, said “This long awaited judgment provides clarity, consistency and comfort for mesothelioma victims and their families. As well as the people currently directly affected by asbestos related disease, this judgment means that the thousands of people who are yet to be given the devastating news that they have the deadly illness will at least know that their families can get access to justice and receive the financial security they need.
“But the sad fact is that many victims of mesothelioma who have been awaiting the outcome of this appeal may not have lived long enough to know if their families will now receive the compensation they deserve.
“Asbestos related disease is the biggest killer in the workplace in Britain, causing more than 5,000 deaths every year. The number of people affected by mesothelioma is still rising and because of the time it can take for this illness to develop it is expected to peak around 2015.
“There have been repeated challenges to the entitlement to compensation of the asbestos victims by the defendants in this case. In the six years that have passed since it started, hundreds of people suffering will have died without knowing that this result will help provide for their families.”
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