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November 21, 2008

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No get-out for insurers after landmark asbestos ruling

Insurers have failed in a bid to avoid paying compensation to asbestos victims, after a High-Court ruling today (21 November).

The decision means insurers remain liable to pay compensation for mesothelioma caused by exposure to asbestos in the workplace — if they insured the employer at the time the asbestos exposure occurred. It follows a nine-week court battle in June and July this year.

The insurance companies argued that the wording of their insurance policies cleared them of responsibility for paying any compensation for the disease, owing to the fact that it did not develop until years after the exposure occurred. They claimed the policies they sold were “triggered” by the development of the disease rather than by the exposure to asbestos.

Had the companies won their case, thousands of asbestos victims would have been limited to payments by the Government, which are much lower than what they would expect to obtain in a damages claim.

Derek Simpson, general secretary of Unite the union, which fought the insurers on behalf of its member, Charles O’Farrell, said: “Thousands of men and women across the UK have been negligently exposed to asbestos by their employers, but insurers have tried and failed to use legal technicalities to escape their responsibility to pay compensation under the policies they sold to employers. They sought to avoid their liabilities, while pocketing the money.”

Head of asbestos policy at Thompsons Solicitors, Ian McFall, added: “The court had to grapple with many difficult and complex legal issues in this important test case to decide the true meaning and effect of the insurance policies. The outcome is a great relief for many asbestos victims and their families, and a victory for fairness, justice, and common sense.”

A spokesperson for the Association of British Insurers told SHP: “We welcome the judgement, as it will ensure certainty and continuity. It will ensure solvent insurers can continue to pay mesothelioma compensation to claimants as quickly as they can, and that claimants will continue to receive fair treatment.”

He stressed that the case had been brought by insurance companies that have ceased trading, or had not provided policies for a number of years, and not by solvent insurers.

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