Asbestos Update

(Re)insurers will welcome recent clarification in the long-running pleural plaques and Employers' Liability 'Trigger Litigation' cases.

The House of Lords' decision in Rothwell v Chemical and Insulating Company Limited and Others (2007) that pleural plaques did not constitute compensatable damage stands following the recent announcement by the Ministry of Justice. This article considers the announcement along with the developments in the Employers' Liability Trigger Litigation.

Pleural Plaques

The issue of whether pleural plaques should be compensatable has been debated heavily during the past two years. Insurers and the public have been able to witness how different the Scottish and UK governments are in their approach to the problem. In the last week of February 2010, the Ministry of Justice issued a statement clarifying the UK Government's intentions on pleural plaques, which highlights such difference. Insurers will welcome this latest, and perhaps final, instalment in the long-running saga as to whether pleural plaques are compensatable, in the rest of the UK, at least. In Scotland, the position is currently very different.

The House of Lords, in Rothwell, decided that the existence of pleural plaques did not constitute compensatable damage. The Scottish parliament legislated to overturn this ruling and made pleural plaques a condition capable of constituting actionable and compensatable damage. The Damages (Asbestos-Related Conditions) Scotland Act 2009 is now law, notwithstanding resistance from insurers, who challenged the Act by judicial review. In January 2010, Lord Emslie in the Court of Session in Edinburgh rejected the insurers' case. However, that decision is being appealed, and it may yet end up before the Supreme Court in London.

Government Response to the Rothwell Decision

Following Rothwell, the UK Government published a consultation paper seeking views on a number of options, including whether to overturn the House of Lords' judgment or to establish a compensation regime based on a 'no-fault' basis. However, the Ministry of Justice confirmed on 25 February 2010 that "on the basis of medical evidence received during the course of this review, including authoritative reports from the Chief Medical Officer and the Industrial Injuries Advisory Council, we are unable to conclude that the Law Lords' decision should be overturned at this time or that an open-ended no full compensation scheme should be set up."

Accordingly, in...