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Asbestos Liability Triggers at Date of Exposure

Insurance companies dealing with employers’ liability and asbestos related claims may not welcome with open arms a recent decision of the UK Supreme Court.

The UK Supreme Court confirmed that insurers are obliged to pay out under employers’ liability policies where employees contracted mesothelioma following exposure to asbestos in the course of their employment, even in circumstances where the disease did not develop during the currency of the relevant insurance policy. The Court found that the liability of employers and their insurance companies is triggered where it is shown that exposure to asbestos contributed to the risk that an employee would suffer mesothelioma and where he then in fact went on to develop the disease. 

Mesothelioma is a cancer of the thin layer of cells lining the internal organs of the body, the most common form of which is pleural mesothelioma, a cancer of the lining of the lung. The cancer occurs as a result of inhalation of or exposure to asbestos materials. It has a particularly long gestation period (in some cases up to 50 years), with the result that it is usually not diagnosed until it is at an advanced stage and is inevitably fatal. 

A complete EU ban on asbestos products was introduced in 2000, although the use of blue and brown asbestos had already been banned in Ireland in 1983 and 1993/1994 respectively. Prior to any banning legislation, asbestos was commonly used in many building materials such as fire and heat insulation and cement products and it continues to be found in buildings constructed prior to the banning legislation. Because of the period of dormancy of mesothelioma, it is thought that negligence claims in this area will peak around 2015. 

The decision of the UK Supreme Court brings welcome clarity to the area. In 2006 the UK Court of Appeal held that liability under a public liability policy was only triggered in circumstances where mesothelioma developed during the relevant policy period. This decision, although dealing with public liability insurance, caused much concern that employees who had contracted mesothelioma would be left uncompensated, particularly where their employer had since gone out of business.  

While the Irish courts have yet to pronounce on the issue of whether liability is triggered at the time of exposure to asbestos or at the point when mesothelioma develops, it is likely that the UK Supreme Court decision will be of persuasive authority should the issue come before the courts in this jurisdiction.

William Fry recently acted in the defence of proceedings arising from asbestos exposure in the early 1960s where mesothelioma did not develop until some fifty years later in 2010.

Contributed by Ruth Finnerty & Sinéad Keavey.

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