Asbestos - Asbestos litigation in the UK

Claims for damages following asbestos exposure are expected to peak in the next 10 years, write Paula Jefferson and Andrew Parker.

On 21 November 2008 judgment was given in test cases known as the EL Policy "Trigger" Litigation. The proceedings arose after six employees died from mesothelioma, having inhaled asbestos fibres at work. Their employers sought to recover from their insurers. But which insurers were liable: those insuring the employers when their employees were exposed to, or inhaled, asbestos fibres (date of inhalation) or those (if any) insuring the employer up to 40 or more years later when the tumour developed (date of tumour)?

Prior to the Court of Appeal decision in Bolton MBC v Municipal Mutual Insurance Ltd in 2006, employers' liability insurers paid mesothelioma claims based on the date of inhalation. The Bolton case concerned the interpretation of clauses in public liability policies. Bolton's PL policy with MMI provided an indemnity where "injury, illness, loss or damage occurs during the currency of the policy". The Court of Appeal held that an actionable injury arose not at the point of exposure, but a much later date. The medical evidence confirmed that this was within one year either side of 10 years prior to the symptoms appearing. MMI was held liable to indemnify Bolton, as the injury occurred within its period of cover.

In contrast to the typical "occurrence" based wording of PL policies, the conventional EL wording provides indemnity for "bodily injury or disease caused during the period of insurance". Following Bolton MMI argued that the word "sustained" in its policies was synonymous with "occurred" and hence the EL policy trigger should be 10 years +/- one year prior to the date of manifestation of symptoms.

Other insurers in run off, Builders Accident, Independent and Excess, adopted the same position. The effect was that employees (or solvent employers who had settled those employees' claims), whose claims would have been met under policies in existence at the time of inhalation, risked being unable to recover if there was no policy in place at the date of tumour.

MMI issued proceedings against Zurich Insurance Company and 10 local authorities (former MMI policyholders later transferred to Zurich), seeking a declaration that its"sustained" EL wording should be interpreted in line with Bolton. The defendants argued that the wording should be interpreted in the same way as a causation wording. Burton J. held that "sustained" and "contracted" wordings should be construed as meaning the same as a "causation" test, and that the policies should respond to claims where employers were liable for inhalation by employees during the policy period.

An innovative feature was that the medical evidence included reports by three leading respiratory consultants and two renowned biochemists. The medical knowledge was found to have moved on since Fairchild (and Bolton), with the original "single fibre theory" being discredited. Lord Rodger's view in Fairchild "that the greater the number of asbestos fibres taken into the body, the greater the chances that one of them will trigger a malignant transformation" is now fully accepted.

The medical evidence showed that no injury or disease is suffered at the date of inhalation. The judge concluded instead that actionable injury occurs only at around five years prior to diagnosis. The experts agreed that it is probable that by then, angiogenesis, where the tumour has developed its own blood supply, will have taken place.

Almost inevitably, this litigation is now the subject of an appeal, due to be heard later in 2009.