Mesothelioma victims claim victory after Mr Justice Burton spurns Bolton case ruling that policies triggered only on diagnosis.
Zurich has claimed victory after the High Court upheld the status quo over multi-million-pound payouts to asbestos victims.
In a High Court ruling last Friday, Mr Justice Burton backed the current “policy trigger” liability, which holds insurers responsible at the time of an employee’s exposure to asbestos.
Zurich, which brought the test case, and asbestos victims claimed the decision was a victory in their fight against dormant insurers, including Municipal Mutual Insurance and Excess Insurance Company, which disputed the responsibility.
They referred to the “Bolton case”, a Court of Appeal decision of two years ago that ruled any policy was triggered only on diagnosis of illness.
Iwan Borszcz, Zurich’s casualty claims director, said: “If we didn’t challenge this issue in court, then the compensation payments for the victims that were negligently exposed to asbestos would have been either significantly less than they should have been, or non-existent in cases where the insurer has ceased trading, or is insolvent.
“We appreciate that this has been a time-consuming exercise for the victims and their families who want to be compensated as quickly as possible.”
Any upholding of the Bolton decision would have been a disaster for families of victims as some insurers liable at time of diagnosis have now gone out of business. Other victims had the disease diagnosed after they had retired.
Under the present system – called time of exposure – insurers share the payouts between them, roughly in proportion to the length of time they were liable for the asbestos exposure.
In recent years there have been 2,000 deaths a year from mesothelioma, the fatal lung disease caused by exposure to asbestos; it is estimated that the rate will continue into 2011 to 2015, when the number of deaths will peak.
Ruth Durham, whose father died in November 2003, aged 73, after developing the disease, said: “I am hugely relieved to hear of today’s court decision, which will see justice done for my father.”
However, Neil Hackett, disease and claims manager at loss adjuster Garwyn, believes insurers will use the Bolton case once again to pursue their legal challenge, although it covered public liability not employers’ liability insurance.
Hackett said: “This is an eminently sensible result but one which I fear is not going to be the end of the matter. This is just the opening salvo of the ‘policy trigger’ argument.
“It has always been anticipated that there would be an appeal. It is unfortunate that the matter cannot leap-frog to the House of Lords.
“I would hope that some calm reflection takes place by those pursuing the Boltonite position as to whether the matter needs to be progressed.”