Court of Appeal criticised for failing to provide clarity in EL asbestos cases

An “extraordinary” Court of Appeal judgement has failed to provide clarity on the liability to compensate victims of historic asbestos exposure and so the combined cases are almost inevitably destined to go to the Supreme Court, litigators said today.

In a majority judgement in the Employers’ Liability (EL) Trigger Litigation, the Court of Appeal partially overturned a High Court ruling in November 2008. As a result only some sufferers will now be able to obtain damages.

However, the three justices hearing the cases – Lord Justice Rix, Lady Justice Smith and Lord Justice Stanley Burnton – each gave different reasonings in a judgement described as confusing for insurers and victims alike.

Law firm Kennedys – which acted for two local authorities in the case – said the ruling meant that an insurer’s liability under an EL policy using an injury “sustained” wording is triggered by the deemed date of injury. Where, however, the EL policy used a disease “contracted” wording, that policy is to be interpreted as the time the disease was caused. Similarly, an EL policy with a “causation” wording is triggered by the date the disease is caused.

Partner Mark Burton said: “In an area that deserves clarity, to ensure the efficient functioning of the compensation system for the mutual benefit of claimants, employers, and insurers, the judgment poses almost as many questions as it provides answers. The policy triggers saga is unlikely to finish here.”

Henry Bermingham, public sector partner at national law firm Berrymans Lace Mawer, said: "The judgment can only be described as complex. Private companies, the public sector and their insurers hoped for clarity and certainty on who was liable to compensate victims of historic asbestos exposure. However, in the extraordinary judgment…., the waters have been muddied somewhat.”

Calling the lack of uncertainty “deeply troubling for all involved”, Bermingham – who with colleagues acted for policyholders Derby City Council, Middlesbrough Council and AMEC – said public authorities would now have to make provisions for exposure prior to 1974 and private companies would have to meet claims if they have a pre-1972 policy in place when the tumour began to develop.

He added: “Insurers and their defendants will become liable for an increasing burden of mesothelioma claims and they will no doubt need to fill the insurance black holes that this judgment has left."

In its comment on the case, Barlow Lyde & Gilbert – which acted for Babergh Council – described the Court of Appeal judgement as “fragmented”.

The firm said: “The reasoning of the three Lord Justices are all different and further in the lead judgment of Lord Justice Rix he indicates that he considers himself bound by the previous decision in Bolton v MMI and that, were he not bound by the Court of Appeal’s previous decision in that case he would have found to the contrary.

“In combination, the position is therefore wholly unsatisfactory and it appears inevitable that this matter will proceed to the Supreme Court.”