The Damages (Asbestos-related Conditions) (Scotland) Act 2009 (“ 2009 Act”) came into force on 17 June 2009 in response to the October 2007 House of Lords decision in Rothwell v Chemical Insulating Co Limited. In that case, the House of Lords held by majority that “pleural plaques, either of themselves or "aggregated" with the risk of developing other asbestos-related diseases and the consequent anxiety, did not cause damage and did not therefore constitute an injury giving rise to an action in tort”, this notwithstanding the previously generally understood position that pleural plaques were sufficient in their own right as a basis for a personal injury claim for compensation.
Although that decision was not binding on the Scottish courts (being a decision in an English case), there was concern that it might impact upon similar claims north of the border and, indeed, the decision was followed in at least one Scottish case in late 2007. As a matter of policy (and somewhat controversially), the Scottish Government passed the 2009 Act to ensure those suffering from pleural plaques would "continue to be able to raise an action for damages."
Concerned with the financial and commercial impact of the 2009 Act, which the insurance industry estimates could cost into the £billions and lead to “upwards pressure” on premiums in Scotland, a group of major insurers challenged the validity of the 2009 Act. They sought a judicial review of the legislation on two main grounds:-
- That it infringed their rights under Article1 of Protocol 1 of the European Convention on Human Rights (which provides protection against interference with property); and
- That the legislation was irrational and therefore subject to review by the Court on the basis of its common law powers of review.
The insurance companies were initially ruled against and, on 12 April 2011, a panel of judges at the Court of Session in Edinburgh refused both grounds of appeal. The Court refused to overturn the legislation as it found that “it cannot be said that the decision to place financial responsibility on the insurers was one which lay outside the margin of appreciation which the legislature enjoys in this sphere”. The Scottish Government's actions in passing the 2009 Act, even if contentious, were neither irrational or unjustifiable.
Insurers have indicated an intention to appeal to the Supreme Court. Meantime, many pleural plaques claims remain on hold.
To view the Court of Session decision click here