Mesothelioma - Will insurers pay up?
October 18, 2010
Mesothelioma is a horrible and inevitably fatal tumour whose only known cause is exposure to asbestos. It may be decades after the exposure before the tumour begins to develop, so people whose exposure to asbestos occurred in their workplace are likely to have left that employment, and/or their former employer may no longer exist, by the time their first symptoms of breathlessness appear. And typically within 2 years of the appearance of symptoms this aggressive disease has reached its fatal outcome. The prospects of the sufferer and/or their dependants being properly compensated rely on their being able to identify both the responsible employer, and that employer’s insurers.
Now to those uncertainties is added another layer of difficulty and distress. Even if an employer is proved to have been negligent in exposing the claimant to asbestos, and their insurance history can be identified, the question of whether an insurer will actually pay an award of compensation will depend on the precise wording of the insurance contract. Since the late 1990s no insurer has been willing to offer insurance for an employer’s historical liability for mesothelioma, so the task for the Courts has been to interpret the wording of insurance policies some of which were written 70 years ago.
In a Court of Appeal judgment published this week no less than 8 differently-worded such policies were considered. Some contracted to indemnify the employer for liability for causing mesothelioma during the period of insurance, others indemnified if the disease was sustained or contracted during the period of the policy. The appeal court wrestled with the meaning of these words, and the outcome of their deliberations seems to be that if a policy refers to causing disease, the insurer whose policy was in place at the date of negligent exposure will have to pay up. But the position is dramatically different if the policy refers to a disease sustained or contracted (or similar wording). In that situation, the relevant period of insurance cover would be the period during which the disease first showed itself, which would typically be within the last 2 to 5 years. As already noted, there have been no such insurance policies available since the late 1990s, and therefore unless the employer is still in business and has the means to pay, the claimant gets nothing for their claim.
The appeal judges’ attempts to wrestle with the meaning of contractual terms against this background of suffering and loss have unfortunately still left room for argument and interpretation, and these complex issues now go further on appeal to the Supreme Court. Claimants are caught in the cross-fire between insurers seeking to minimize their financial exposure, and face continuing uncertainty as to whether or not their claims will be paid.