The decision handed down by the Supreme Court today marks the end of a long-running case concerning the wording of insurance policies in relation to mesothelioma and is a victory for employers, employees and common sense.
The UK Supreme Court decided by a majority that Employers' Liability policies covered mesothelioma claims if the victim was exposed to asbestos at the time the policy was in place (this is referred to as the "causation" or "exposure" basis).
This is the latest in a long line of cases involving exposure to asbestos where novel arguments have been put forward by insurance companies to avoid liability, only to have the courts reject them and endorse the status quo.
In the leading judgement, Lord Mance was of the view that courts: "should avoid over-concentration on the meaning of single words and phrases viewed in isolation and look at insurance contracts more broadly". He was satisfied that the causation basis was the correct approach because the policies under consideration:
- required employment and injury to occur at the same time;
- there was therefore an anomaly if an employee was exposed to asbestos in one year, but by the time the effects had manifested themselves he was no longer employed by the policy holder;
- there was a close link between the number of employees and the premium paid; and
- if the insurer decided not to renew, cover for historic liabilities would evaporate.
He concluded "the natural inference to draw from references to being engaged in the employer's service and in work forming part of the employer's business is that it was envisaged that the accident or disease would and should arise out of such service and work, rather than merely occurring during it".
The complexities in this area of law were highlighted in the dissenting judgement of Lord Phillips. He took it upon himself to revisit causation issues and the "special rule" which exists in mesothelioma cases. In Lord Phillips's view, damages claimants are entitled to damages for the creation of the risk of mesothelioma. Whilst that may be a favourable interpretation of causation from the employee's point of view; this was fortunately rejected by the other four judges, as it would have meant that unless the claimants could show when the risk arose (and medically that is impossible to do in multiple exposure cases) , the polices would not have responded and the victims of mesothelioma would have gone uncompensated.
Lord Mance's judgement also provides robust analysis of the causation debate. In his view (and that of the rest of the court) the position is that in mesothelioma cases, the law accepts "weak" or "broad" causation, where exposure may have caused the disease, but it is not possible to prove a link on the balance of probabilities.
Although some uncertainly remains in Public Liability cases over when mesothelioma can be said to occur, this judgement marks a significant clarification and restatement of the law. In this case, as in others, once the music has stopped, we've found ourselves back where we started after all.