Supreme Court goes against insurers in Trigger litigation ruling

Today’s ruling, given by a majority of four to one with Supreme Court president Lord Phillips dissenting, establishes that all employers’ liability (EL) insurance cover is triggered at the point of exposure to toxic materials rather than when the disease starts to develop.

The insurers argued that an employer’s liability was restricted to when cancerous tumours started to develop, instead of when victims were exposed to asbestos dust.

The decision in part overturns a controversial Court of Appeal ruling and reinstates the historic practice that all EL policies respond to the exposure of an employee to asbestos by their employer during the period of insurance.

Devereux Chambers’ Colin Wynter QC, who has represented five of the claimants throughout the legal battle, drove forward the case despite resistance from the insurance defendants, some of whom were represented by Wynter’s set mate Colin Edelman QC.

It has been estimated that hundreds of millions of pounds worth of insurance and reinsurance liabilities turn on the outcome of the case. 

DLA Piper partner Leon Taylor, who represented PricewaterhouseCoppers in its capacity as administrators to defunct insurance companies BAI and Independent Insurance Company, commented: “In a clear and comprehensive majority decision the court has reintroduced certainty in relation to how certain types of EL policies should respond to asbestos-related mesothelioma claims and ordered that the insurance companies involved must pay out to their policyholders and claimants.”

The court said that the Rainy Sky principal “where a term of a contract is open to more than one interpretation, it is generally appropriate to adopt the interpretation which is most consistent with business common sense” should apply (3 November 2011).

Giving the leading judgment, Supreme Court Justice Lord Mance ruled: “The  fundamental focus of the policies is on the employment relationship and activities during the insurance period and on liability arising out of and in course of them, then the liability for mesothelioma imposed by the rule in my opinion fulfils precisely the conditions under which these policies should and do respond.”

The legal line-up:

BAI (Run Off) Limited (In Scheme of Arrangement) (Appellant) v Durham (Respondent)

Appellant: 4 New Square’s Roger Stewart QC; South Square’s Stephen Robins DLA Piper partner Leon Taylor

Respondent: Devereux Chambers’ Colin Wynter QC; Outer Temple’s Alison McCormick; Irwin Mitchell partner Helen Ashton

BAI (Run Off) Limited (In Scheme of Arrangement) (Appellant) v Thomas Bates and Son Limited (Respondent)

Appellant: 4 New Square’s Roger Stewart QC; South Square’s Stephen Robins DLA Piper partner Leon Taylor

Respondent: Exchange Chambers’ Edward Bartley Jones QC; Exchange Chambers’ Digby Jess; Weightmans associate Eddie Watts

Excess Insurance Company Limited (Respondent) v Akzo Nobel UK Ltd  (Appellant)

Appellant: Blackstone Chambers Michael Beloff QC; Devereux Chambers’ Richard Harrison; Hill Hofstetter partner Jonathan Hofstetter

Respondent: Devereux Chambers’ Colin Edelman QC; Crown Office Row’s David Platt QC; Plexus Law partner Stephen Phillips

Excess Insurance Company Ltd (Respondent) v Amec plc (Appellant)

Appellant: Blackstone Chambers Michael Beloff QC; Devereux Chambers’ Richard Harrison; Berrymans Lace Mawer partner Henri Bermingham

Respondent: Devereux Chambers’ Colin Edelman QC; Crown Office Row’s David Platt QC; Plexus Law partner Stephen Phillips

Excess Insurance Company Ltd (Respondent) v Edwards (Appellant)

Appellant: Devereux Chambers’ Colin Wynter QC; Devereux Chambers’ Andrew Burns; Thompsons Solicitors partner Joanne Candlish

Respondent: Devereux Chambers’ Colin Edelman QC; Crown Office Row’s David Platt QC; Plexus Law partner Stephen Phillips

Independent Insurance Company Ltd (Appellant) v Fleming & Anr (Respondents)

Appellant: 4 New Square’s Roger Stewart QC; South Square’s Stephen Robins DLA Piper partner Leon Taylor

Respondent: Devereux Chambers’ Colin Wynter QC; Deans Court Chambers’ Timothy Smith; John Pickering and Partners partner Carolann Hepworth

Municipal Mutual Insurance Company (Appellant) v Zurich Insurance Company & Ors (Respondents)

Appellant: Two Temple Gardens’ Howard Palmer QC; Two Temple Gardens’ Andrew Miller; Two Temple Gardens’ Sonia Nolten; Watmores partner Jon Grunewald

1st respondent: 4 New Square’s Jeremy Stuart-Smith QC; 4 New Square’s Leigh-Ann Mulcahy QC; 4 New Square’s Clare Dixon; Buller Jeffries partner Derek Adamson

2nd respondent: Blackstone Chambers’ Michael Beloff QC; Crown Office Chambers A John Williams; Kennedys partners Kieron West and Mark Burton

Municipal Mutual Insurance Limited (Respondent) v Zurich Insurance Company and Adur District Council and others (Appellants)

Appellant: Blackstone Chambers’ Michael Beloff QC; Crown Office Chambers A John Williams; Kennedys partners Kieron West and Mark Burton and BLM partner Brian Goodwin

Intervener

5 Essex Court’s Jeremy Johnson QC instructed by the Treasury Solicitor for  Department of Work & Pensions /DH Legal Services