Union takes on insurers in Supreme Court

The legal battle to determine the trigger point for employers liability cases hit the Supreme Court yesterday.  

In a landmark ruling the Court of Appeal decided last year that in some asbestos cases the employer’s liability insurance should be triggered not by the exposure to asbestos in the workplace but by the development of the fatal cancer, mesothelioma.

In the case of such cancers, they develop decades after the insurance policy is in place to respond to the claim, meaning some victims have been left without compensation.

The court of appeal was ruling on an earlier High Court decision in 2008 that all insurers who provided cover to the employer at the time of the asbestos exposure should pay. Four run-off insurers are defending the case.

The union Unite has launched an appeal to the Supreme Court against the October decision on behalf of the family of Charles O’Farrell, who died in 2003 having been exposed to asbestos while working as a steel erector from 1964 to 1967 for Humphreys & Glasgow Limited. The company was insured at the time by Excess Insurance Company Limited. The employer ceased trading in 1992.

Excess Insurance argued that it was not liable to pay out because, according to the wording of its policy, employees had to “sustain injury” at the time they were working for the employer and within 12 months of the insurance policy.

The court decided that Charles O’Farrell did not “sustain injury” until he developed mesothelioma many years later, after his employment had ended and long after the insurance policies in place at the times of his exposure to asbestos had expired

But, lodging its appeal, the union argued that because symptoms of mesothelioma only begin decades after the lethal asbestos dust is inhaled, the ruling means that thousands of British workers who develop the disease could be deprived of compensation.

Most recent Health & Safety Executive figures revealed that there were 2,321 mesothelioma deaths in 2009.

Unite general secretary Len McCluskey said: ”Unite is determined to restore justice for our members and all victims of asbestos. The court of appeal decision has left a black hole in the protection that employers’ liability insurance was intended to provide. Insurance companies sold policies to cover risk. When the risk became a reality some resorted to picking apart the words in their own policies.

”It is illogical that some victims of asbestos will receive compensation and others won’t, depending on words such as “injury sustained” or “disease contracted” used in insurance contracts written decades ago. Try explaining that to someone diagnosed with a fatal disease caused by the negligence of their employers.”

An ABI spokesman said: “Insurers remain committed to paying compensation to all mesothelioma claimants as quickly as possible. Active insurers are continuing to pay claims on a causation basis.”