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Employers’ Liability triggers ligation reaches Supreme Court

On 5th December 2011 the Supreme Court (Lord Phillips, Lord Mance, Lord Clarke, Lord Kerr and Lord Dyson) begin hearing the appeal in the long running saga of the Employers’ Liability Trigger Litigation. Tim Smith acts as Junior Counsel for the Claimants in Lead Action 2. He was also Junior Counsel for Commercial Union in Bolton v MMI and CU 2006 1 WLR 1492 which was the forerunner to the present action.

The Supreme Court is being asked to consider a series of interlinking appeals and cross appeals from the Court of Appeal and will necessarily re-visit the first instance decision of Burton J that in mesothelioma claims employers’ liability policies which provide an indemnity in respect of “injury” or “disease” “sustained” “or contracted” during the policy period were triggered at the date of inhalation of asbestos (date of inhalation) and not at the later date of development of the mesothelioma tumour (injury in fact).

This case is of significant importance to asbestos victims, solvent employers, and insurers. The Government has recognised the particular public importance to be attached to this decision and has been granted permission to intervene.

The litigation comprises 6 lead actions

• 3 involve individual Claimants (Actions 1-3) who had recovered judgment against an insolvent employer and brought claims under the Third Party Rights Against Insurers Act 1930;
• 2 cases involve 3 solvent employers/insureds who brought claims for declaratory relief in respect of their liability to their employees;
• 1 case involves a dispute between (a) Zurich and MMI surrounding the transfer of liabilities from MMI and Zurich in relation to local authority policies and (b) MMI and 10 local authorities.

The Insurers are either in run off or insolvent - and include BAI, The Independent, Excess and MMI.

The Appeal is listed for a two week hearing - the longest in the history of the Supreme Court.

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