Asbestos: court ruling opens way for insurance claims

Chest X-ray Mesothelioma is a form of cancer which can take decades to develop

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The UK Supreme Court has made a ruling which could allow thousands of insurance claims by families of people who died after exposure to asbestos.

The court placed insurance liability at the time an employee was exposed to asbestos, not when symptoms appeared.

Relatives of workers who died of the cancer mesothelioma want to make claims on policies dating from the 1940s.

One insurance firm in the case said the ruling was not its "favoured outcome" but welcomed the clarity it brought.

The Association of British Insurers welcomed the ruling, and blamed a small group of insurers for the legal battle.

The Supreme Court was asked to rule on the issue after judges in lower courts failed to agree.

Families had a success in 2008, when the High Court said firms' insurers at the time workers inhaled fibres were liable.

But two years later the Court of Appeal said that in some cases liability was triggered when symptoms developed - which could be decades after exposure.

Lawyers said the appeal court ruling had left victims' families facing "confusion and uncertainty".

The new ruling by a panel of five Supreme Court justices states that the disease can be said to have been "sustained" by an employee in the period when it was caused or initiated.

Case study: Leslie Screach

Les Screach and Ruth Durham

Ruth Durham brought a claim in memory of her father Leslie Screach (above), who died of mesothelioma in 2003.

He was exposed to asbestos fibres between 1963 and 1968 while working as a paint sprayer in west London.

Mrs Durham said: "I am delighted to hear of the court's decision.

"I was determined to see this through with a positive outcome for all those who, like my dad, suffered so terribly because of someone else's negligence.

"During the Second World War, Dad learned to use sign language and when I decided to learn, we used to practise together.

"It became our special way of communicating with one another and, when he was diagnosed with cancer, he couldn't bring himself to tell me directly and just made the sign for Cancer to let me know."

One of the judges, Lord Clarke, said: "The negligent exposure of an employee to asbestos during the [insurance] policy period has a sufficient causal link with subsequently arising mesothelioma to trigger the insurer's obligation."

Unite, the largest trade union in Britain and the Irish Republic, welcomed the ruling, which it said will affect "many of the 2,500 people who are diagnosed with mesothelioma each year".

Unite's challenge was on behalf of the family of Charles O'Farrell, a retired member who died of mesothelioma in 2003.

Commenting on the Supreme Court's decision, Unite general secretary Len McCluskey said: "It is a disgrace that insurance companies went to such lengths to shirk their responsibilities."

Mr O'Farrell's daughter, Maureen Edwards, said: "This is the right decision. I am delighted for all those families who have been awaiting this result.

"My dad worked all his life and was hoping to enjoy retirement before mesothelioma took him away.

"There was never any question about who was to blame - all this long battle was about was insurers wanting to get out of paying."

Nick Starling, director of general insurance and health at the Association of British Insurers, said: "The ABI and our members are committed to paying compensation as quickly as possible to people with mesothelioma who have been exposed to asbestos in the workplace.

"We have always opposed the attempt to change the basis on which mesothelioma claims should be paid, as argued by those who brought this litigation.

"Today's ruling by the Supreme Court has confirmed what most in the industry have always understood - that the insurer on cover when the claimant was exposed to asbestos should pay the claim, rather than the insurer on cover when the mesothelioma develops.

'Financial security'

"This case has been pursued by a small group of 'run-off' insurers acting independently and at odds with the views of the majority of the UK insurance industry. [A "run-off" company is an insurance firm which is no longer accepting new business.]

One of the four insurance companies which contested the proposal to date liability back to the time of exposure was Municipal Mutual Insurance Limited.

Analysis

The small group of insurers who brought this case argued that they were not liable to pay compensation under employers' liability insurance, if the illness occurred outside the relevant policy period. The Supreme Court Justices rejected that argument.

After a six-year legal battle the relatives involved in this litigation will get their compensation, but it is likely to affect thousands of other existing and future claims.

According to specialist lawyers, each payout could amount to anything from £65,000 to several million pounds, depending on individual circumstances.

Adrian Budgen of Irwin Mitchell Solicitors, which represented one of the relatives involved, said the judgment would apply not just to those who already have asbestos-related illness but to those who will be will be diagnosed next week, next month, or in years to come.

It issued a statement saying: "Whilst the ruling does not reflect MMI's favoured outcome, we welcome the clarity this judgment brings as it enables MMI to determine the extent of its liabilities and the available options for the future of MMI and its business.

"MMI participated in the joint action in order to determine the extent of the Company's insurance liabilities under policies it wrote in the period up to September 1992 (the date the Company ceased writing new insurance business).

"MMI has continued to compensate local authority employers for Mesothelioma claims, despite not being obliged to pay out claims until the outcome of the case was known. The underlying claimants (the victims of the disease) who have received compensation from MMI have been paid in full and have not been disadvantaged in any way by the fact that this case was brought."

A lawyer representing the lead claimant, Ruth Durham, said the judgement provided "clarity, consistency and comfort" for the families of thousands of mesothelioma victims.

Helen Ashton from Irwin Mitchell said: "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."

She said asbestos-related disease caused more than 5,000 deaths every year.

The number of people affected by mesothelioma was still rising because of the time it can take for this illness to develop and was expected to peak around 2015, she added.

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