Mesothelioma can take over 40 years to develop, the Supreme Court said, but the appellants had argued that employers’ liability insurance policies only covered the disease if it manifested itself at some point during the relevant policy period.
The Supreme Court ruled four to one to dismiss this argument, which would have changed the basis on which mesothelioma claims were paid, so that the insurer on cover when the disease actually develops would be liable.
Instead, they said 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.
Zurich welcomed the ruling, which could pave the way for an increased number of claims in relation to asbestos exposure.
The insurance company said the judgement had averted the risk of taxpayers having to foot the bill for compensation payments. Local authorities would have been forced into ‘self-funding’ mesothelioma compensation claims from the public purse and some compensation payments would have been ‘significantly’ less’ than they should have been, it said.
Zurich’s general insurance chief executive Stephen Lewis said: ‘Zurich is pleased that mesothelioma claimants now have the clarity they need. For us at Zurich, this has always been about us fulfilling our claims promise and delivering when it matters for our customers.
‘This Supreme Court judgement reinforces the point that polices we thought we were selling; and what people thought they were buying are now to be upheld as such.’
Nick Starling, the Association of British Insurer’s director of general insurance and health, added: ‘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.’
The case had been pursued by a small group of ‘run-off’ insurers whose views were ‘at odds’ with most in the insurance industry, he said.
‘We are pleased that the Supreme Court has over-ruled the Court of Appeal’s judgment on this point as it ensures that claimants should get the compensation they reasonably expect. As such, the judgment provides clarity and certainty for both mesothelioma claimants and insurers,’ he said.
The ABI said it now hoped to see a process put in place to speed up the claims process for mesothelioma claimants.’The ABI is in favour of introducing a pre-action protocol so that claimant solicitors and insurers are held to strict timelines to ensure cases are dealt with as quickly as possible and this could be underpinned by an online mesothelioma portal to improve the efficiency of the claims process,’ Mr Starling added.
Even before yesterday’s ruling, the Actuarial Profession estimated the total cost of asbestos-related claims to the insurance market between 2009 and 2050 would be £11bn – 90% of which would relate to mesothelioma. The estimate was made by the Profession’s asbestos working party.