Landmark Mesothelioma Claim Ruling

Zurich v International Energy Group [2015] UKSC 33

Facts

International Energy Group (IEG), a solvent Guernsey company, employed Mr Carre for 27 years. Mr Carre was exposed to asbestos dust during the whole of his employment and he contracted mesothelioma. IEG took out insurance with Zurich, for six of those 27 years. Other than a two year period when another insurer was on risk, IEG did not have any other insurance cover during the remaining period of Mr Carre's employment (compulsory employers' liability insurance only having come into force in Guernsey in 1993).

IEG reached a settlement with Mr Carre shortly before his death and sort to recover the full amount of that payment from Zurich. Zurich argued that it was only required to pay an amount proportionate to the relationship between the policy period and the total period of Mr Carre's exposure by IEG (i.e. 6/27ths).

First instance

At first instance, Zurich won, with the judge emphasising that the Compensation Act 2006 which had reversed the decision of Barker v Corus did not apply in Guernsey.

Barker had held that an employer was only liable for his proportion of loss where more than one employer had exposed an employee to asbestos.

Court of appeal

The Court of Appeal allowed the appeal from that decision, the majority finding that mesothelioma had been "sustained" during the period of the policy issued by Zurich (because mesothelioma requires a "weak" or "broad" causal link for the disease to be caused during a policy period) and that Zurich was therefore liable in full (regardless of the fact that exposure during the other 21 years was also an effective cause of the disease).

Supreme court

The Supreme Court has now unanimously allowed the appeal from that decision. It did so on the basis that Barker continues to represent the common law position in Guernsey.

Of more general interest was the court's discussion of what the position would have been had the 2006 Act applied, i.e. the position where an insurer has insured an employer for part only of...