A landmark court case has cleared the way for UK-based companies to be sued in UK courts for environmental disasters caused by their subsidiaries operating overseas.

The judgment, in the case of 3,000 South African former asbestos miners, means they may be entitled to higher awards for serious asbestos-related illnesses, such as asbestosis and mesothelioma, than are available in their own country.

Lawyers for the miners estimate they could be entitled to up to £50m in damages.

The miners won their case against Cape, a UK-based company that had asbestos mining interests in South Africa, until the 1970s.

Martin Staples, president of the Federation of Insurance Lawyers, said the ruling by the House of Lords last week would cause multi-national companies' insurers significant concern.

He said: “It looks potentially bleak for UK companies with foreign subsidiaries working in hazardous conditions.”

The law lords said it would be unfair to expect the miners to sue in South Africa because there were no procedures for handling group actions and there was only limited access to legal aid.

Cape's lawyers argued the case should be heard in South Africa, since this was where its asbestos activities were located.

A spokeswoman for Cape's solicitors, Davies Arnold Cooper, said the courts had yet to decide whether any damages awarded would be based on UK or South African compensation levels.