The English court will consider how employers’ liability policies (compulsory in England & Wales since 1972) should respond to mesothelioma claims. Traditionally, EL policies have responded (been ‘triggered’) on the basis that the policies on risk are those for the period of the asbestos exposure. This is despite the fact that there are a number of standard wordings expressing the ‘trigger’ in apparently different ways. The Court of Appeal in Bolton Metropolitan Council v. Municipal Mutual and Commercial Union [2006] EWCA Civ 50, (a case concerning public liability policies) highlighted this issue by deciding that ‘injury’ did not ‘occur’ at the point when the asbestos fibres were inhaled (ie during exposure), but rather at some later point. A number of EL insurers (prompted by their reinsurers) are arguing that this decision should apply equally to the significant proportion of EL policies which are expressed to indemnify liability for injury or disease that is ‘sustained’ or ‘occurs’ during the policy period; this would overturn decades of market practice.
The vast majority of asbestos claims in the UK are brought by employees. EL cover is ‘ground up’ and effectively unlimited and will therefore have to respond to most claims. The UK’s future asbestos liabilities are estimated to be in the £10-20 billion range. The ‘trigger’ litigation will decide which EL policies should respond to mesothelioma claims. Further test cases are likely to be needed to resolve other ‘trigger’ issues in the context of asbestos claims.
