Mesothelioma: Insurers Have 2 Years In Which To Bring Contribution Claims Against Other Insurers

RSA Insurance PLC v Assicurazoni General SpA [2018]

The High Court has ordered that a contribution claim brought by RSA following settlement of a mesothelioma claim against another employers liability insurer was statute-barred. Two years, not six years, was the relevant limitation period.

Background

A painting and decorating company ("the Company") employed Mr Merritt between the years of 1975 and 1986. The Company was dissolved in 1996. The Claimant, RSA, provided employers liability cover to the Company for the final 6 months of Mr Merritt's employment.

Mr Merritt developed mesothelioma and medical evidence attributed this to asbestos exposure suffered throughout his time with the Company.

The Claimant (RSA) insured the Company's employment risk for a short period of Mr Merritt's employment, with other insurers covering the EL risk during the rest of the employment period. Nonetheless, the Claimant was obligated to indemnify the Company for the entirety of the claim per section 3 of the Compensation Act.

An offer to settle was accepted by Mr Merritt on 17 January 2011, with the claim settling for over £170,000.00. The Claimant conducted Employers Liability Tracing Office (ELTO) searches against the Company after settlement, these not having been available earlier.

The searches revealed that the Company's employment risk was additionally covered by Aviva between 1975 and 1979, and Assicurazoni Generali, the Defendant, between 1981 and 1983.

The Claimant sought contribution from both insurers on a proportional Fairchild basis, claiming it had an equitable right to contribution from them. Aviva agreed to make a 60% contribution. The Defendant refused to make the requested 32% contribution.

The Claimant made a claim against the Defendant seeking either:

Equitable contribution to the sum paid to Mr Merritt A sum the Court considered to be just and equitable The Defendant responded that the claim was statute barred on the basis that the contribution claim fell under Section 1(1) of the Civil Liability (Contribution) Act 1978 ("the 1978 Act"). Further to section 10 of the Limitation Act, the 1978 Act provides a limitation period of two years for contribution claims running from the date that the offer to settle the initial claim is accepted. This was as opposed to the six year period argued for by the Claimant.

In the alternative, the Defendant put RSA to proof as to the reasonableness of the settlement.

Outcome

HHJ Rawlinson provided judgment...