Tag Archives: Mesothelioma

The Supreme Court handed down judgment in the employers’ liability policy trigger litigation on 28 March 2012. This overturns the Court of Appeal’s judgment of 08 October 2010 regarding the meaning of “disease sustained” policy wording in employers’ liability (EL) cases and reinstates the market practice that policy cover for mesothelioma claims is triggered by the date of exposure to asbestos and not by the deemed date of injury many years later.

This Adviser provides a recap on the developments leading up to this judgment and what effects the Supreme Court’s decision has on businesses.


Bolton v Municipal Mutual Insurance (MMI) set the scene in 2006. This was a public liability (PL) case in which it was held that in a mesothelioma claim, injury “occurs” when the tumour starts to develop, ten years prior to the onset of symptoms.

The EL policy trigger litigation arose because four insurers (Builders Accident Insurance, Excess Insurance, Independent Insurance and MMI) had EL wordings with ‘disease sustained’ or ‘disease contracted’ in their EL policies. Those insurers felt these were worded in a similar way to the Bolton PL policy and therefore decided to decline claims on the basis of the ruling in the Bolton case.

A group of claimants sought to reverse the stance taken by these four insurers by issuing proceedings which became known as the employers’ liability policy trigger litigation.

The High Court

The High Court reached a decision in November 2008 and found that whatever the wording was in an EL policy, the policy was to be construed as having been triggered by the date of inhalation. Therefore, it was the insurer who was on risk at the date of inhalation which was liable to indemnify in respect of the disease.

  • EL policies using disease ‘sustained’, ‘contracted’ or similar wording were to be interpreted to mean the same as ‘caused’ during the policy period.
  • The ‘caused’ date was the period of exposure to asbestos.
  • A “causation” wording was necessary in an EL policy in order to give effect to the intentions of both parties and to meet an employer’s obligations under the Employers’ Liability (Compulsory Insurance) Act 1969.
  • The observations forming part of the detailed medical views indicated that the mesothelioma tumour could first occur only five years prior to the onset of symptoms.

The Court of Appeal

The litigation was appealed to the Court of Appeal which reached a decision in October 2010. It produced a complex judgment which caused many insureds to have gaps in their EL insurance due to the different policy wordings adopted by different insurers.

The main decisions of the Court of Appeal were that:

  • Where the EL policy wording used is ‘disease sustained’, the policy which responds is the one in force when the mesothelioma tumour starts to develop.
  • Where the EL wording used is ‘disease contracted’ (deemed to be synonymous with the word “caused”) then the policy in force at the time of exposure responds.

The Supreme Court’s decision

The final appeal occupied the Supreme Court from 5 to 15 December 2011 and the judgment was handed down on 28 March 2012.

The Supreme Court held that EL policies will respond whether the wording of the operative clause is “caused”, “contracted” or “sustained”. This endorses the historical “causation” approach to policy interpretation.

The effects of the Supreme Court’s decision

  • The judgment aligns the meaning and effect of “caused”, “sustained” and “contracted” and avoids different treatments of similar EL policies.
  • The affected policyholders will no longer be forced to self-fund costly mesothelioma claims.
  • The blockage of stayed claims can now be cleared.
  • The exposure trigger applies equally to other asbestos and occupational diseases where there is a latency period between exposure and injury and therefore averts further market disruption.
  • Significant liabilities will revert back to insurers and this will have a negative impact upon their financial exposure.
  • The overall effect of the judgment is to restore clarity to the EL claims handling process.
  • There remains an issue with PL claims as to whether the trigger should be ten years or five years prior to manifestation. The Supreme Court judgment does not resolve this point.

What should you consider?

Companies should seek to assess whether they have:

  • Claims against historic EL policies with insolvent insurers.
  • A comprehensive understanding of their historic EL insurance including acquisitions.
  • Financial provisioning in place to meet the cost of future uninsured mesothelioma claims.
  • Claims which now fall within policies with these insurers.

How can we assist you?

With Insolutions’s skills, resources and award-winning initiatives* in the field of disease liabilities and insurance archaeology, it is very well placed to meet the needs and requirements of any company with such liabilities; and not only in relation to short-term benefits but in relation to lasting corporate solutions.

For further information, please contact :

Ian Pelham
Marsh Risk Consulting
Insurance archaeology

Bill Kirkham
Occupational Disease Claims Practice
Marsh Global Claims

* Winner of the Manchester CII Insurance Awards 2011 – Claims Initiative of the Year

The information contained herein is based on sources we believe reliable and should be understood to be general risk management and insurance information only. The information is not intended to be taken as advice with respect to any individual situation and cannot be relied upon as such.

In the United Kingdom, Marsh Ltd. is authorised and regulated by the Financial Services Authority for insurance mediation activities only.

Asbestos: A dark Legacy.

“Knowing your company’s corporate history could help prevent future unwelcome surprises in the law courts”, says Ian Pelham.

Asbestos-related claims and in particular Mesothelioma, present a real business risk to many companies, firstly because they have still to reach a peak, and secondly because the current legislative landscape in many countries, including the UK, makes it easier than ever for individuals to bring legal action against firms that may have exposed them. For many companies the extent of this risk is still unknown.

To download a .pdf of the Article please click here.


Marsh, the world’s leading insurance broker and risk adviser, is advising organisations to examine their potential exposures to asbestos-related claims ahead of a predicted peak in 2016.  Marsh’s advice follows its publication of new research on actual mesothelioma cases before the Queen’s Bench Division of the High Court of Justice in London which highlights the range of UK occupations and industries affected by diseases such as mesothelioma.

The research reveals that only one-quarter (27.5%) of the claims analysed were found to involve organisations operating in the mechanical, electrical and process engineering industries. The rest of the cases examined emanated from claims in the chemicals industry (11%); construction (7.5%); metals and minerals (6.5%); and the electronic products, electronics and IT hardware sector (6.5%). The final settlement values in the cases reviewed ranged between £50,000 and £200,000.

Over a third (36%) of the cases examined were from 1956 to 1960, making it likely that initial exposure would have been 40 years prior to the effective start of a claim. This indicator, supported by data from the Health and Safety Executive which indicates UK mesothelioma claims are expected to peak in 2016, suggests that it is likely that affected employees will have been exposed to asbestos between the late 1960s and mid 1970s.

Marsh’s research also suggests that widespread publicity surrounding mesothelioma claims is impacting on the number being made by dependants which, at 47%, is almost as many as the number instigated by principals (53%).

Marsh’s new White Paper, Mesothelioma Claims, which was produced in conjunction with the University of East Anglia (UEA), examines 15% of the court cases commenced between September 2006 and October 2007 in the Queen’s Bench Division of the High Court of Justice in London and assigned to Senior Master Whitaker, the Senior Master of the Supreme Court of England and Wales, Queen’s Bench Division, Royal Courts of Justice, and the Queen’s Remembrancer.

Ian Pelham, who oversaw the research project with UEA and is a Managing Consultant at InSolutions, part of Marsh’s Risk Consulting Practice, commented: “Marsh’s research highlights that few, if any, industries are immune to the  possibility of mesothelioma claims arising from past employment practices.

“Mergers and acquisitions in the second half of the 20th Century, followed by a contraction back to ‘core business’, has resulted in many organisations now being unaware of their potential exposures to asbestos-related claims.

“With the fast track approach to claims, championed by Senior Master Whitaker, in place in the courts companies now have a very limited time window to locate their legacy employers’ liability coverage, once they received notice of a potential claim.

“If companies have not yet investigated their potential future liabilities, it would be prudent to do so now. They should ensure that they review and understand their corporate histories and that, where available, they catalogue copies of their old employers’ liability policies and store them safely. If a company becomes aware of a potential gap in its insurance record relating to a site that might give rise to a mesothelioma claim, it is advised to investigate whether the insurers from that period can be found.”

Terry Kendrick, MBA Programme Director, Norwich Business School at the University of East Anglia, said: “Supporting Marsh with data analysis on this project has provided real insight for our MBA students studying strategic risk management. The startling issues around the potential growth and value in mesothelioma claims have provided a real and vital case for them to study.”

Marsh’s White Paper, Mesothelioma Claims, includes commentary from Senior Master Whitaker, Richard Mattick, of Counsel with the London office of law firm Covington & Burling LLP, and a case study of Polestar Group, one of the UK’s largest printers of magazines and newspaper supplements. To obtain a copy, please contact vivian.x.wong@marsh.com or visit: www.marsh.co.uk.

About Marsh

Marsh, the world’s leading insurance broker and risk adviser, has over 23,000 employees and provides advice and transactional capabilities to clients in over 100 countries. Marsh is a unit of Marsh & McLennan Companies (MMC), a global professional services firm with approximately 53,000 employees and annual revenue exceeding $11 billion. MMC also is the parent company of Guy Carpenter, the risk and reinsurance specialist; Kroll, the risk consulting firm; Mercer, the provider of HR and related financial advice and services; and Oliver Wyman, the management consultancy. MMC’s stock (ticker symbol: MMC) is listed on the New York, Chicago and London stock exchanges. MMC’s Web Site is www.mmc.com. Marsh’s Web site is www.marsh.com.

About the University of East Anglia

The University of East Anglia was founded in 1963 and directly employs around 3,000 full-time staff, has over 14,000 students and an annual income of some £170m. It is estimated to be responsible for indirect employment of some 3,300 people outside the institution and generates direct and indirect economic impact of around £420m. In the latest Research Assessment Exercise, over 50 per cent of the university’s research activity was deemed to be world leading or internationally excellent with 87% in total being of international standing. Thanks to the university and its Norwich Research Park partners, the city has the fourth greatest concentrations of ‘most highly cited researchers’ in the UK, after London, Oxford and Cambridge.