Asbestos trigger-issue ruling preserves status quo

Jocelyn Dorrell | News | HSP
26.11.2008

Asbestos disease victims will still be able to bring claims for compensation under insurance policies in place at the time of their exposure, thanks to a High Court ruling on 21 November.

The test-case decision comes after a group of insurers argued that mesothelioma victims should bring claims under the policy in place at the time they became ill, not the policy in place at the time they were exposed to the substance. The insurers concerned no longer take on employers' liability insurance business.

For many years, it was the norm for insurers to pay damages on the basis that they were liable at the time of exposure. But a Court of Appeal ruling in an occupiers' liability insurance case that liability only arose when the illness emerged raised questions over the situation in mesothelioma cases and prompted the insurers to suspend "time of exposure" payouts.

Six families decided to challenge the insurers' position. The firms' defence hinged on the wording of employers' liability insurance policies. In a nine-week hearing over the summer, they argued that the policies stated the insurance would only be triggered when an asbestos disease developed, not when the victim was exposed; the so-called "trigger issue".

But the High Court rejected this argument. In a complex legal judgment, Justice Barton ruled that insurers who were "on risk" (providing cover) at the time of exposure must pay compensation. He said, "[I]f I am looking for when injury takes place/occurs, or when disease is present, I do not consider that it can be left as late as the onset of symptoms.

"It is plain that there is, albeit unknown to the sufferer, an injury and a disease present in his or her body well before it makes itself manifest by his finding difficulty in breathing."

If the insurers' case had succeeded, thousands of asbestos victims would have been denied access to damages since many insurance policies now exclude asbestos-related illnesses, and pursuing a claim against an employer directly is impossible if - as in many cases - the company no longer exists.

The union Unite brought one of the six cases on behalf of the family of Merseyside gas fitter Charles O'Farrell, who died in 2003. Unite general secretary Derek Simpson hailed the ruling as a "hugely important victory". He said the insurers had "tried and failed to use legal technicalities to escape their responsibility to pay compensation under the policies they sold to employers".