A recent ruling in the U.K. House of Lords has resolved the extent to which an employer, and by extension its insurer, may be held liable for paying full damages to mesothelioma victims when there is more than one potential defendant. But the reprieve may only be temporary because the U.K. government plans legislation to overturn the decision.
The case, Barker v. Corus, featured a claimant that had been exposed to asbestos dust while working for two separate employers, and for a period when he was self-employed. The House upheld that each defendant should only be held responsible for the degree to which it contributed to the risk of that claimant eventually coming to harm.
“The Lords decision is good news for insurers,” says Ali Sallaway, an insurance partner in the dispute resolution group at law firm Freshfields Bruckhaus Deringer. “But the announcement from the British government that it is planning to overrule the decision by an amendment to the compensation bill is really bad news for insurers.”
Mesothelioma is a lung condition that can take up to 40 years to develop. It is therefore difficult to determine at what point the victim was exposed to an injurious substance, or if the disease was brought about by smoking. The House of Lords ruling limits the ability of mesothelioma victims to recover equal damages from multiple defendants, potentially giving insurers some much needed respite.
“The justification for the joint and several liability rule is that if you caused harm, there is no reason why your liability should be reduced because someone else also caused the same harm,” Lord Hoffman said during the case. “But when liability is exceptionally imposed because you may have caused harm, the same considerations do not apply and fairness suggests that if more than one person may have been responsible, liability should be divided according to the probability that one or other caused the harm.”
The decision brings clarity to unresolved issues from an earlier House of Lords decision in the case of Fairchild v. Glenhaven Funeral Services. There, the majority found that mesothelioma victims could hold any former employer liable for damages, even when it was unclear which defendant was to blame for exposing the claimant to asbestos.
In response to outrage from trade unions and victim support groups, the Lord Chancellor vowed on June 20 to introduce legislation that would reverse the advances made in the Barker case. It would reinstate the decision upheld in Fairchild, leaving the door open for claimants to collect full damages from employers, irrespective of whether they are to blame for the injury caused. As a result, insurers could face protracted litigation when trying to recover reinsurance, or when pursuing contributions from negligent defendants and their insurers – some of whom may be difficult to trace or even insolvent decades after the case has closed. Mesothelioma kills around 1,800 people every year in the U.K., with the average pay-out being approximately £150,000 (US$276,760), according to Freshfields.
