Mesothelioma Claims: Employers Liability Insurance “Trigger” Litigation

Mesothelioma is a fatal illness caused by asbestos. Around 2000 people in the UK will be diagnosed with mesothelioma this year and tens of thousands more will die during the next ten to fifteen years. People who worked in the manufacturing industry, engineering and construction, where employers routinely failed to protect them from exposure to asbestos, are among those most at risk.

This briefing note summarises a serious threat facing those who have been exposed to asbestos in the workplace as the insurance industry mounts a new challenge to avoid paying compensation to mesothelioma sufferers and their families.

When a person claims compensation for mesothelioma the practice of the insurance industry for decades was that the insurer on cover at the time of the exposure to asbestos would pay the claim. For example, if the member was exposed to asbestos in 1965 and was diagnosed with mesothelioma in 2006 the employer's insurer in 1965 has always paid the claim.

Recently a number of insurers have refused to pay out in mesothelioma claims because they now argue that the wording of the insurance policies they sold to employers decades ago means something very different to what they previously accepted it meant. Those insurers now argue that the "trigger" for the insurance policy to respond to a mesothelioma claim is not the exposure to asbestos, but the development of the disease itself.

The obvious benefit for the insurers who are taking the "trigger" issue is that if they are successful they will escape liability completely. The problem for the victims is that there may be no other insurer to pay their claim because, by the time they develop the disease, which is often 40 years or more after they were exposed to asbestos, many employers have ceased trading and no insurance exists.

The effect of the "trigger" issue defence is to frustrate and delay the process of obtaining compensation for people who are dying from mesothelioma and for the families of those who have died. It has also created uncertainty about how policies of employers liability insurance should be interpreted in mesothelioma cases. The insurance industry and their advisors know this. Although not all insurers are presently taking the point, if the insurers who have brought the "trigger" issue test case are successful other insurance companies might try the same tactic.

Six test cases have been selected to determine the outcome of the "trigger" issue. The trial of the lead cases, which is expected to last nine weeks, will commence in the High Court in London on 3 June 2008.

Thompsons Solicitors are representing the family of Charles Michael O'Farrell, who died of mesothelioma, in the lead case backed by the trade union Unite against Excess Insurance Company Limited.