Employers Liability Policy Trigger Litigation

Court of Appeal judgment has serious implications for mesothelioma victims (Durham v BAI and others)

The Court of Appeal has given its long awaited judgment in this case. However, unfortunately potential confusion and lack of clarity continues following the 160 page complex judgment!

In a majority judgment, the Court of Appeal partially overturned the first instance decision and decided that an insurer’s obligation to indemnify under an Employer’s Liability policy using an injury “sustained” wording is to be given the “Bolton” meaning. That is to say, the obligation is triggered by the date of injury rather than the date of exposure. However, in the case of a policy using a disease “contracted” wording, that policy is still to be interpreted as referring to the time when the disease was caused, i.e. the person was exposed to asbestos. Likewise, an EL policy with a “causation” wording is triggered by the date the disease was caused.

This essentially means that for each and every claim, the exact policy wording will need to be scrutinised.

The case looks likely to now go to the next level of appeal at the Supreme Court. Until that further appeal is heard and the matter clarified, those claimants who do not have a solvent employer to sue may continue to go uncompensated. This is clearly an extremely frustrating position for those who have been awaiting the outcome of this hearing for some considerable time.

Lord Justice Rix delivered the judgement, describing it as “an unfortunate conclusion”.

The implications of the judgment are far-reaching and impact on insurers, policyholders and claimants alike. The gaps in existing insurance policies will now need to be addressed and it will remain to be seen what disputes are likely to arise in the future between insurers in relation to the injury caused date in “sustained” policy wordings.

Further Case Law updates concerning mesothelioma claims

A further recent judgment handed down recently which receives a far warmer welcome than the last is that of Drake & Others v Foster Wheeler Ltd. This case concerned a mesothelioma claim brought by the daughters of a power station worker who died of mesothelioma. The claim included the cost of palliative care received by the deceased at a hospice. The employer was ordered to pay the sum of £10,021 directly to the hospice.

Given the limited funding provided to hospices and the invaluable care they provide or many sufferers of mesothelioma, this judgment should be applauded. It is hoped it will result in additional support for hospices and the good work that they do.

The Risks of Asbestos Exposure continue…

Whilst it may remain the view that the incidence of mesothelioma will peak in approximately 2015, this is questionable when one considers the ongoing exposure. Despite the significant risks of asbestos now being clear to all, people continue to be exposed to asbestos unnecessarily.

A company from Essex was fined a five figure sum earlier this year having failed to undertake a suitable risk assessment to determine the existence of asbestos during development work at a property. The HSE inspector Kathy Gostick said “This sends out a clear message that employers must check for the presence of asbestos and take measures to ensure its safe handling and removal to avoid its spread”.

It seems fair to say that the banning of asbestos and asbestos products in the UK will produce a decline, eventually, in the incidence of asbestos diseases and particularly mesothelioma. However, the fact remains that, on a global basis, the trend of asbestos use is thriving. This was made abundantly clear in a report carried out recently by the BBC.

The report revealed that more than two million metric tons of asbestos were mined worldwide in 2009. This was led by Russia, China and Brazil. The majority was to be turned into asbestos cement for corrugated roofing and water pipes. More than half that amount was exported to developing countries like India and Mexico.