Employer's Liability Trigger Issue – Decision due for Mesothelioma Victims

Mesothelioma compensation and employer's liability

31/10/2008

The outcome of a trial which could have serious implications for a substantial number of mesothelioma sufferers across the U.K, both now and in the future, is expected to be announced in November.

Earlier this year Mr Justice Burton, sitting at the High Court in London, was asked to decide what triggered an employer’s liability insurance policy to pay compensation to a mesothelioma victim, whether it was the wrongful exposure to asbestos or the emergence of the disease.

Mesothelioma is a cancer of the lining of the lung or, less commonly, the abdomen. On average it takes 30 – 40 years to develop from the date a person is exposed to asbestos and the annual number of mesothelioma deaths rose to 2056 in 2006. Previous projections suggest they will peak somewhere between this figure and 2450 deaths in about 2015.

In many cases by the time the disease has developed the employer has gone out of business and the only access victims have to compensation is from the employer's liability insurers at the time of the exposure. Historically this is how the insurance industry as a whole has dealt with such claims. If the Court now decides that the insurance policy is only triggered by the development of the disease, many claimants will not get any compensation because the companies will no longer be around to sue, and there will be no insurance policy in place.

Employers typically have two types of insurance cover. Insurance to protect them against claims for injuries or illnesses suffered by their employees and insurance to protect them against claims from the public, e.g visitors to their premises. These two types of insurance have developed very differently over time.

Up until 2006, there was never any doubt about the meaning of the insurance policies and the practice of the insurance industry in paying out compensation in either a claim on an employer's liability policy or a claim on a public liability policy but when the Court was asked to consider which insurer had to pay out in respect of a public liability insurance policy claim the industry became involved in a dispute.

The case in question, the Bolton Metropolitan Borough Council v Commercial Union and Municipal Mutual Insurance, involved the two named insurers arguing which of them had to pay. In February 2006, the Court decided that the mesothelioma had "occurred" (this was the word used in the particular policies) at the onset of malignancy and that this, according to the medical experts, was about 10 years before the onset of symptoms.

Following the Court of Appeal decision in Bolton, certain insurers/their representatives tried to allege that this principle should apply to employer's liability policies which provided cover for injuries "sustained" or diseases "contracted" in the policy period, arguing that this only happened when the mesothelioma emerges in line with the medical evidence in the Bolton case.

Irwin Mitchell had been consulted by Leslie Screach back in April 2003, when he was diagnosed with mesothelioma. When he died, in November 2003, at age 73, his daughter, Ruth Durham, continued the claim on his behalf. Mr Screach had worked for G & C Whittle Ltd from 1963 – 1968 and had been exposed to asbestos during the course of his work as a paint sprayer. His work had taken him in to all kinds of commercial and industrial premises and he recalled having to brush down asbestos sheets, asbestos ceiling tiles or corrugated roofing prior to spray painting them. He often applied Artex which contained asbestos which he mixed from dry powder then sprayed onto ceilings and walls in new office blocks.

Mr Screach's breathing had started to deteriorate in February 2003. By March that year he was finding it so difficult to breathe that he could not even bend down to put on his own socks. He went to his GP and was sent for various tests at the local hospital, in Bassetlaw. He was diagnosed with mesothelioma in April 2003, not long after celebrating his Golden Wedding Anniversary with his wife Rosemary.

He deteriorated rapidly and his family had to look after him by helping him get out of bed, go to the bathroom, wash, and dress and get around the house. He lost a substantial amount of weight and was on medication to try and control the chest pain he was suffering. He sadly died from his mesothelioma on November 1 2003, the Coroner subsequently finding his death was due to an industrial disease. His wife Rosemary and his daughter Ruth were devastated. Rosemary's own health deteriorated and she was later diagnosed with Alzheimers disease. Ruth ultimately decided to continue the claim for the benefit of her father’s estate and her mother.

Ruth commenced court proceedings against her father's former employer and the employer's liability insurer, (the former Builders Accident Insurance Company - now in run off and scheme of arrangement) in October 2006 in order to recover compensation.

In February 2007, the Court found that Mr Screach's employer, G & C Whittle, had been negligent and in breach of their duty to him when they exposed him to asbestos, and that his mesothelioma had been caused by that exposure. Compensation was agreed at £92,500.00 but Ruth has not received any of this money and will never do so if the Court agrees with the insurer's interpretation of the policy words.

Ruth is still raw from having watched her father's health deteriorate. She said: "All daughters will say they have a special relationship with their dad but we were like peas in a pod and were the best of friends. Dad had learnt to use sign language during the war and when I decided to learn we used to practise together. It became our special way of communicating with one another and, when he was diagnosed with cancer, he couldn’t bring himself to tell me directly and just made the sign for Cancer to let me know the terrible news. I miss him every day and no sum of money will ever compensate for the terrible suffering that mesothelioma victims and their families go through. If this case can help others in future, it will make his death more bearable."

Helen Ashton, who is representing the lead claimant, Ruth Durham in the EL Trigger Litigation and who specialises in asbestos related issues said: "This has been a long and complex trial during which the Court heard evidence from medical experts from this country and abroad about the development of mesothelioma and from a number of people involved in the insurance industry from the 1960's onwards.

"Whilst, for claimants and their families, no amount of money can compensate for the terrible suffering and loss caused by mesothelioma, for the insurance industry this litigation is all about money. One of the Directors of the Municipal Mutual Insurance Company told the Judge that in losing the Bolton case it enabled the Municipal Mutual Insurance Company to release 8.3 million pounds of its claims revenue in respect of public liability claims and that the money it had previously set aside to pay employer's liability claims (between 70 – 90 million pounds), would be released if the Court found in their favour.

If the insurers involved in this litigation are successful, then a large number of claimants will not receive any compensation for effectively losing their lives to this insidious disease. There is likely to be a domino effect with other insurers reviewing their policy words and denying insurance cover. This could spread to asbestos related diseases other than mesothelioma, in fact even before judgment has been handed down Excess Insurance Company is rejecting claims in respect of pleural thickening and asbestosis.

Employers who remain in business but who now find themselves uninsured, despite having purchased insurance and paid premiums every year, will have to pay compensation to victims directly, which could cause them to go out of business. Local Authorities will face huge bills because of gaps in their insurance cover and some insurers will find they now have liabilities which they had not previously accounted for.

The whole process of compensating mesothelioma victims in a timely fashion will be undermined and thrown into mayhem."