Trigger ramifications

The Supreme Court ruling in the 'trigger' litigation case on 29 March, BAI (Run off) and Ors v Durham and Ors [2012] UKSC 14, put to bed a long-running issue on employers' liability insurance.

The case centred, as ever, on long-suffering asbestos victims who seem to be the subject of a never-ending list of test cases over the past decade. The sequence started with Fairchild [2003] 1 AC 32 (indivisibility and joint and several liability), followed by Barker [2006] UKHL 20 (indivisibility and apportionment), interjected by Grieves [2006] EWCA Civ 27 '“ which was followed by Johnston v NEI [2007] UKHL 39 (pleural plaques and asymptomatic conditions) '“ and followed up last year with Sienkiewicz [2011] UKSC 10 (de minimis exposure).

In Durham, the Supreme Court determined that the responsible employers' liability (EL) insurance policy to answer a claim made by a mesothelioma victim against a defendant employer, no matter the wording ('sustained' or 'contracted'), was the policy in place at the time of asbestos exposure. The insurers had argued the relevant policy was that in place at the time the disease developed; for many, a time when no defendant, and hence no policy, existed at all.

For the asbestos practitioner these cases have provided a lively playing field tarnished with the massive concern of uncertainty imposed on the victims. But what are the wider implications of the Supreme Court ruling? And will it play as heavily beyond the mesothelioma battlefield as it did for those affected directly by the trigger case?

Other insurers

While the ABI and the majority of insurers distanced themselves from the trigger litigation (pursued only by four insurers: MMI, Builders Accident, Excess and the Independent Insurance Company), anecdotally many conversations with defendant representatives of the non-participating insurers before 29 March 2012 ended with 'of course, we'll have to wait and see what happens in the trigger litigation'.

As a sceptical claimant lawyer, I find it difficult to digest the idea some insurers would have paid out on their EL cases had the Supreme Court found against the claimants. It is much more likely that we would have faced responses along the lines of 'our hands are tied by the trigger judgment'. After all, what is good for the goose is good for the gander.

Beyond mesothelioma

The parties involved were keen to stress the trigger litigation was centred on mesothelioma, but is it fair to say other asbestos claimants should have been worried by the trigger judgment? Inevitably the answer is yes.

The medical uncertainty surrounding the mechanics of mesothelioma lent itself very well to the arguments in the trigger litigation. However, take asbestosis as an alternative, where the first inflammatory response in the lungs possibly begins on inhalation but does not develop into

fibrosis until many years later, finally becoming visible on chest x-ray, and subsequently giving rise to symptoms of breathlessness. That brief layman's description already presents four possible triggers (and probably as many years' arguments in the courts). The same triggers '“ inhalation, effect on cells in the lungs, distortion of lung tissue, symptoms '“ could equally be used for mesothelioma as they could for asbestosis. It is not only mesothelioma victims welcoming the judgment.

And why stop there? To suggest the Supreme Court decision in the trigger litigation did not have ramifications across the disease landscape simply must be a fiction.

The justices' finding that employers' liability policies, whether worded 'contracted' or 'sustained', should be read as giving proper effect to the Employers' Liability (Compulsory Insurance) Act 1969 and paying out on a causation basis, must indicate the wider effect of the judgment. It must also be a welcome relief to all disease injured employees, whether cancer, deafness or other. The reassurance can be met in equal measure by the employers who purchased insurance many years ago in good faith to provide resource for compensating their injured workers.

Claimants can probably be assured that no future insurers will seek to raise these issues on other disease claims as to do so would be foolish.

Public liability diseases

It was the 2006 Court of Appeal judgment in Bolton MBC v MMI [2006] EWCA Civ 50 that set the wheels in motion for the trigger litigation (or at least put the kernel of the idea in the four maverick insurers' minds).

If the Court of Appeal in Durham felt bound by its previous judgment in Bolton, the Supreme Court fortunately felt free of those constraints, deeming public liability policies to be 'operating on different basis'. So, is Bolton still good law for the wives who washed asbestos overalls, or those who lived in the shadow of asbestos factories?

Aside from the legislative purpose of the ELCIA, which is lacking for PL policies, it is arguably not stretching the bounds of reasonableness to make the trigger judgment look favourably on future PL policies. Indeed, was not the 'underlying purpose' of PL policies purchased in the 1960s to give companies cover for the activities occurring in the 1960s '“ such as the wife who is injured after visiting her husband in the factory, or the injured non-employee sub-contractor '“ rather than potential claims decades into the future? Is there not equally as close a link between the tasks undertaken by the employer/company during the currency of the insurance policy (the year the premium was paid) for employees as visitors?

Many recent public liability policies (post-Bolton and indeed since 2002) have sought to exclude asbestos liabilities. That presents, in my opinion, exactly the same sort of insurance lacuna as the trigger litigation could have presented had it gone the insurers' way '“ a period during which a person can be negligently exposed to asbestos, develop mesothelioma and yet have no recourse to a defendant's insurance if they wish to make a claim. Take, for example, the wife who washed her husband's clothes in the 1970s, reaches angiogenesis of her mesothelioma in 2010 and symptoms manifesting in 2015, yet her husband's employer went out of business in the recession in the late 2000s. She has no recourse to claim. A case arising on these facts would be ripe for revisiting Bolton.

Lung cancer

Lastly, it is impossible to leave an asbestos case without a word on lung cancer cases: does the trigger litigation cast any further light on the dim candle lit by Lord Phillips in the Sienkiewicz judgment? The Supreme Court grappled with the question that seems to have vexed the courts in mesothelioma claims, encapsulated by the 'special rule' of material contribution to risk. The previous concepts of causation considered by the courts seemed to offer some glimmer of hope in lung cancer claims, in that asbestos 'contributes to the risk' or 'contributes to the cause' of lung cancer. But the Supreme Court justices appear to have reservations about the distinctions simplifying matters to a 'weak' or 'broad' causal link (Lord Mance).

That does not extinguish hope altogether, but the repeated affirmation of the Barker decision by the justices (and therefore implicitly the apportionment of lung cancer) seems to cast serious doubt on the possibility of advancing a joint and several liability argument for lung cancer claims. While mesothelioma claimants are saved by section 3 of the Compensation Act, sadly it seems lung cancer victims do not have the legislative support. The millions of pounds that were inevitably spent on legal fees in the trigger litigation is warning enough in itself to tread carefully where asbestos test cases are concerned.