Employers’ liability insurers face a multi-million pound payout following a Supreme Court decision on 28 March 2012 that insurance cover is triggered at the point of exposure to asbestos, rather than when the symptoms of the disease caused by that exposure (mesothelioma) start to develop.
It is extremely hard to pinpoint what particular exposure to asbestos caused an individual’s mesothelioma, since a single strand of asbestos can cause the disease, and it can take up to 40 years from the exposure to asbestos for the disease to develop. As a result, the Supreme Court had previously changed the causation rules just for mesothelioma cases, so that all a claimant has to prove against his employer is that the employer exposed him to asbestos, and he subsequently went on to develop the disease.
However employers’ liability insurers argued that this special rule did not apply to them, so that they did not have to indemnify employers for mesothelioma cases that developed after the expiry of the policy periods.
The Supreme Court has now held that they cannot avoid liability for such cases. It held that as a matter of construction, looking at the policies as a whole, there were several features that pointed to the policies covering such cases, so that the mesothelioma could be said to have been “sustained” by the claimant in the period when it was caused or initiated, even though it only developed or manifested itself later. Also section 1 of the Employers Liability Compulsory Insurance Act 1969, which requires every employer to insure against liability for injury or disease arising out of and in the course of their employment, supported this interpretation. The purpose of the policies was to insure the employers against liability to their employees, and so if the employers are held to be liable to the employees, it would be remarkable if the insurers were not liable under the policies.
The judgment, TRIGGER - Independent Insurance Company Limited (Appellant) v Fleming and another (Respondents) [2012] UKSC 14, is available online at www.supremecourt.gov.uk.