Wednesday 28 March 2012

Clarity, at last, for mesothelioma victims – but we need to keep a watch on LASPO


At last, some clarity in the fraught arena of mesothelioma litigation. Today’s judgment by the Supreme Court finally establishes a level playing field and emerges as the single most important judicial decision affecting asbestos liabilities in the UK to date.

I touched upon mesothelioma, a form of cancer caused by exposure to asbestos, last October in the context of the Legal Aid, Sentencing and Punishment of Offenders Bill (LASPO). I made the point that the government’s determination to push LASPO through would, in reducing the recoverability of success fees and after the event insurance (ATE), make it very difficult for mesothelioma victims and their families to bring claims.

This remains a live issue but meanwhile the Supreme Court has been busy. Five justices – Lord Phillips, sitting as President, and Lords Mance, Kerr, Clarke and Dyson – have unravelled a complex skein of law and fact to give judgment on an appeal from a Court of Appeal ruling in 2010. The background is undeniably obscure, for many lawyers as much as laypersons, but today’s judgment concerns the obligations of insurance companies under various contracts of employers’ liability (“EL”) insurance.

In essence, the Supreme Court was tasked with determining the scope of the insurers’ obligations to indemnify employers against their liabilities towards employees who have contracted mesothelioma following exposure to asbestos. This was complicated because of the unusually long gestation period for mesothelioma: it can take up to 40 years for between exposure to asbestos and the manifestation of the disease. The insurers’ case was that EL policies only covered mesothelioma which manifested itself as a disease at some point during the relevant policy period. In contrast, the employers argued that the insurance policies covered mesothelioma caused by exposure to asbestos during the relevant policy period but which develops and manifests itself sometime later.

Thankfully, the Supreme Court came down on the side of the victims and their families. Its analysis of the factual nexus and preceding judgments led it to conclude that it would be “remarkable if the insurers were not liable under the policies”. Crucially, then, for the purposes of the EL policies, “the negligent exposure of an employee to asbestos during the policy period has a sufficient causal link with subsequently arising mesothelioma to trigger the insurer’s obligation to indemnify the employer.”

What this means is that there is now certainty and a level playing field for those affected by asbestos-related disease – the biggest killer in the workplace in Britain. Insurers have continually tried to wriggle out of liability for mesothelioma claims but this judgment should, thanks to its clarity, render such attempts futile and, just as crucially, see off the prospect of satellite litigation on similar issues.

Hats off to the Supreme Court justices but let’s not forget that LASPO as it is currently drafted will make it difficult to get claims off the ground in the first place. We need to remain vigilant, and ensure that the government’s easy spin about battling ‘compensation culture’ does not ultimately deny the deserving the right to justice.

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