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Supreme Court rules in mesothelioma liability case

The Supreme Court has given its decision in the appeal by insurance companies over their obligations under various contracts of employers’ liability (“EL”) insurance. In particular, the appeals concern the scope of the insurers’ obligations to indemnify employers against their liabilities towards employees who have contracted mesothelioma following exposure to asbestos.

Mesothelioma has an unusually long gestation period, which can be in excess of 40 years between exposure to asbestos and manifestation of the disease. The insurers maintain that the EL policies only cover mesothelioma which manifested as a disease at some point during the relevant policy period. In contrast, the employers submit that the insurance policies respond to mesothelioma caused by exposure to asbestos during the relevant policy period but which develops and manifests itself sometime later.

The court at first instance held that the policies should all be interpreted as having a “causation wording,” and therefore the liability “trigger” under the EL policy was when the employee inhaled the asbestos and not the date when the malignant lesion developed.

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