Mesothelioma litigation

In April 2012, the Supreme Court delivered its judgment in long-running asbestos litigation brought by four insurance companies that had been disputing their liability to pay compensation to victims (Durham v BAI (Run Off) Ltd [2012] UKSC 14). This case turned on the wording of employers’ liability insurance contracts in place when the victims were exposed to asbestos fibres at work several decades ago. The policy wording required the worker to have “sustained” or “contracted” mesothelioma during the term of the policy in order to trigger the insurance cover. The insurers argued that the disease was not “sustained” or “contracted” when the fibres were inhaled, but instead when the disease appeared, which is typically some thirty years after inhalation. Mesothelioma is a “long latency” disease which can lie dormant for decades.

The Supreme Court rejected the insurers’ arguments. The Court said that a broad approach is needed in interpreting policy terms. Rather than simply looking at the literal meaning of words like “sustained” or “contracted”, a Court should consider the whole language and purpose of the insurance contract.

The basic purpose of the policy was to insure, amongst other things, against the risk of workers developing an industrial disease, through exposure to contaminants during the cover period. This meant that the only possible conclusion was that when the policy talked about a disease being “sustained” or “contracted”, it must have been referring to the employee’s exposure to the fibres, because it was this exposure that led, albeit much later, to the development of the full-blown disease. As Lord Clarke noted, any other result would be “remarkable”. Although the case concerned mesothelioma, it also has implications for sufferers of other long-latency industrial diseases.