Insurers who used a court judgment to avoid paying compensation to the families of asbestos-related cancer victims seemed to have suffered a "collective loss of memory" about why they were content to pay in the past, a High Court judge has been told.
The insurers had paid compensation for the fatal lung disease mesothelioma for years on the basis that their liability arose at the time when a worker was exposed to asbestos dust, lawyers told Mr Justice Burton.
But the Court of Appeal ruled two years ago in a different legal context that liability was "triggered" when the disease actually developed - sometimes after 40 years or more - not at the time of exposure.
Insurers then stopped paying and argued they were not liable because the risk cover they provided 40 years ago was no longer in force.
Colin Wynter QC, for three families battling to recover compensation in a test case, said the appeal court judgment resulted in "a jolt, a sea change" in the UK insurance industry, which suffered "a collective loss of memory".
Apparently no-one knew why, in the past, mesothelioma claimants had been paid on an "exposure" basis, the court was told.
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