ENGLISH LEGAL SYSTEM

English Legal System



English Legal System

Question 1 Court Visit: Durham V Bai Run Off) Limited

Facts

This case involved six consolidated actions that went before the English High Court of Justice in June and July 2008. The actions related to cases where employees have suffered and died from mesothelioma which resulted from the inhalation of asbestos fibres during their employment. The Claimants who were employers liable to the employees, sought to recover compensation from the Defendants who were five insurance companies ("the Insurers") that provided Employers' Liability insurance ("EL") to the employers. (Barnett, 2008) The Insurers provided the EL pursuant to the provisions of the Employers' Liability (Compulsory Insurance) Act 1969. The policy wordings varied in the six actions but all included the words "disease sustained or contracted" as being the trigger date. The Claimants argued that cover commences as at the date of inhalation. The Defendants took a different interpretation and argued that the wording should not be construed to provide cover where no injury or disease was present during the period of insurance and that injury was sustained at the date of the tumour, not at the date of inhalation.

Key Issue

The key issue before the Court was what triggered the relevant period of policy cover.

Number of lords involved

5 lords were envolved Lord Phillips of Worth Matravers, Lord Mance of Frognal, Lord Kerr of Tonaghmore, Lord Clarke of Stone-cum-Ebony & Lord Dyson

The High Court's Decision

The Court of Appeal held that, in relation to mesothelioma claims, where an employers' liability insurance policy covered employers for “injury sustained” by their employees in the course of their employment, the insurers' liability to indemnify the employers was not triggered unless the policy was in force when the disease manifested itself in the form of a tumour. Where the policy covered employers for “disease contracted” by employees in the course of their employment, the insurers' liability to indemnify arose on the date of the inhalation of the asbestos dust which caused the disease. (Cook, 2010)

The Court ruled that the intention of the parties when entering into the agreement for insurance was for the trigger date to be the date of inhalation of the asbestos fibres and not the date when the tumour developed. The Court's decision in this case provided much needed clarity to the interpretation of "sustained or contract" in the context of diseases that resulted from the inhalation of asbestos. This decision would have considerable financial impact on insurance industry and it remains to be seen if the losing Insurers in this case would seek leave to appeal to the Court of Appeal to seek an outcome that is more favourable to them.

Case Analysis

Action 1, the Durham/Fern action. The claimant, Mrs Durham formerly Fern, is the daughter of Mr Screach, who was employed by G&C Whittle Ltd ("Whittle") from 1963 to 1968 and was exposed to asbestos in that period. He was diagnosed with mesothelioma in April 2003 and died in November ...