The right of a claimant to recover full mesothelioma compensation from an employer’s liability insurers following occupational exposure to asbestos at one former workplace, despite others where exposure was known to have occurred, has been upheld by a recent majority court verdict.

At the same time, the court has made it clear that a particular insurer is also entitled to seek contributions from other insurers who covered liability at a workplace where a claimant was also exposed to asbestos.

The ruling refers to a case involving a company based in Guernsey, with potentially a different view to applying the Compensation Act. Introduced in 2006, the Act allows a claimant – in relevant circumstances – to claim full compensation from, “any relevant employer” who may then claim back contributions from other employers who are also liable.

Exposed at different companies and locations

Throughout the peak period of Britain’s asbestos use from the 1950s until the first ban in the mid 1980s, it was common for men to be employed throughout their working lives in industries where they could be exposed to asbestos for extended regular periods at different companies and locations.

It was also not unusual throughout this period for there to be little or no asbestos awareness to the long term health risks. In an overwhelming number of cases, there was no safety information, protective equipment or clothing provided by employers.

When more than one former employer is traced and brought to account, a common defence is to contest whether the level of contribution to the victim’s mesothelioma was caused as a direct result of exposure to asbestos at a specific work location.

Liable for a percentage of the damages

The question of deciding the proportion of liability for an employee’s exposure to asbestos, and the subsequent mesothelioma that a former employer should be accountable for if there was a history of exposure at all of the different workplaces, has often been a central to deciding a mesothelioma claim.

In the present case, the claimant was negligently exposed to asbestos by his employer over a 27 year period, which subsequently developed into fatal, incurable mesothelioma cancer. An initial claim for compensation was settled in full and the former employer then sought to recover damages from their liability insurers.

However, the company which had later taken over ownership of the original firm could only identify a total of eight years where they had cover with former insurers. A subsequent insurance provider argued they only provided cover for a proportion of the employment period and were only liable to reimburse a percentage of the damages (and defence costs) being claimed.

The company also argued that implications of the Compensation Act 2006 no longer formed part of the common law of Guernsey and if whether the Act applied.

“Obliged to meet the whole of the liability”

An appeal court found the insurers were liable reimburse the whole of the damages and all the defence costs, against which, the insurers appealed to the Supreme Court.

The appeal case examined the wider affects of the 2006 Compensation Act, and allowing  the recovery of damages in full from a single employer or whether employers should only be liable in damages for their contribution to an employee’s asbestos exposure at different workplaces.

One of the difficulties raised was if an employer and / or insurer who provided cover for only part of a total period of exposure were to become insolvent. In response, it was stated that the Financial Services Compensation Scheme and the Diffuse Mesothelioma Payment Scheme (DMPS) could provide statutory provision.

The majority view of the court held that in the circumstances of the present case, an insurer would be “contractually required to meet the whole of the employer’s liability to a claimant” but insurers would seek “proportionate contributions” from other insurers who provided insurance cover during other periods of asbestos exposure. A contribution could also be sought from the employer itself if they were uninsured for any particular period of exposure.