Insurers could appeal after asbestos-law challenge fails

A group of insurers has failed in its bid to overturn a law in Scotland
that allows people with asbestos-related pleural plaques to claim for
compensation.

Aviva, AXA, RSA, and Zurich brought a judicial review against the Damages (Asbestos-related Conditions) (Scotland) Act 2009, which made pleural plaques a compensatable condition in Scotland, reversing a decision by the House of Lords in October 2007.

Pleural plaques – areas of fibrosis that can develop on the inner surface of the ribcage and diaphragm as a result of exposure to asbestos – are asymptomatic, causing no pain or discomfort. The insurers challenged the lawfulness of the Act, arguing that it contravened the established need for real, or material ‘damage’ to have occurred before a claim of negligence can succeed.

In a ruling on 8 January, Lord Emslie explained: “In this respect, according to the petitioners, the Scottish Parliament in passing the Act has contrived to do the opposite of many foreign legislatures which, faced with an intolerable escalation of claims by ‘the worried well’, have brought in measures to negate the actionability of pleural plaques. And, it is said, the Parliament has done so by means of a blatant controversion of established – and indeed, agreed – medical fact.”

The insurers claim that the decision to allow pleural-plaques sufferers a right to compensation unfairly burdens them with additional liabilities under indemnity insurance policies, which could potentially run into billions of pounds.

The judge conceded: “There is clearly room for differences of opinion as to whether the Parliament was right to legislate in the way it did, and it remains to be seen whether the 2009 Act will prove to have adverse legal, or political consequences in years to come.” Nevertheless, he rejected the insurers’ challenge, concluding that their complaints did not “come anywhere near the standard of ‘irrationality’, which would be necessary in order to invalidate a primary Act of the Scottish Parliament”.

Reacting to the judgement, Nick Starling, director of general insurance and health at the Association of British Insurers, said: “Insurers brought the review on the grounds that the Damages Act is fundamentally flawed, as it ignores overwhelming medical evidence that plaques are symptomless, and the well-established legal principle that compensation is payable only when there are physical symptoms.

“Insurers will now be considering carefully this judgement, and are seriously looking at the grounds for an appeal against it. This is not the end of the road.”

Asbestos action groups welcomed the decision. Harry McCluskey, chair of Clydeside Action on Asbestos, said: “It is absolute rubbish to say that pleural plaques don’t affect victims. They’re as dangerous as any other asbestos-related disease. Most sufferers have some form of breathlessness, but the biggest strain is the worry of developing fatal conditions like mesothelioma, which happens with frightening regularity.”

Frank Maguire, senior partner of Thompsons Solicitors, who is acting on behalf of pleural-plaques victims, called on the insurance industry to “stop obstructing justice and not to try to put any more barriers in the way of victims seeking compensation”.

He also urged the Westminster Government to enact similar legislation for the rest of the UK, a view echoed by Alan Ritchie, general secretary of UCATT, who said: “The decision to dismiss the judicial review is good news for pleural-plaques sufferers throughout Britain.

“The British government must now move swiftly to restore full compensation to all pleural-plaques sufferers. Pleural-plaques victims must not be trapped in a postcode lottery about whether or not they receive compensation.”

The union believes that the main reason for the Government’s delay in responding to the consultation it carried out in 2008 on compensating pleural-plaques victims is due to Whitehall’s reluctance to make funds available to pay compensation to its current and former staff who have developed, or will develop, the condition. Most of the Government’s liabilities relate to former nationalised heavy industries, such as shipbuilding.

UCATT also claims to have seen official documentation estimating the Government’s annual liability for pleural plaques could be as low as £10 million, far lower than previous claims of £35m, but the union was reticent to discuss the full nature of the papers when contacted by SHP.

But speaking in the Commons on 5 January, Justice minister Jack Straw hinted at the complexities of the situation, telling MPs: “This is a difficult issue and involves potential expenditure by a number of departments, but consideration by ministers continues.”

A Ministry of Justice spokesperson rebuffed the union’s claims, saying: “We do not recognise the figures quoted by UCATT. The Government is still considering the issue of compensation for pleural plaques in England and Wales and how people who have been exposed to asbestos can be supported much more widely, and will make an announcement as soon as possible.”

Alan Ritchie, however, described the Government’s attitude on pleural plaques as “deeply frustrating” and accused it of being “paralysed on the issue and unable to make a decision”.