Asbestos disease claims - finally we can sue insurers direct
Making a claim against an employing company who went out of business years ago has been a perennial problem for asbestos disease lawyers like myself. If you can find the company’s employer liability insurers (which we often can), there is someone who can pay the claim. However, when a deal cannot be done and you need to start court proceedings you have had to go through the rigmarole of applying to the Company Registrar to restore the defunct company to the Register.
Only then can you start proceedings to progress an industrial disease claim against a defunct company. Restoring a company to the Register was the very first piece of legal work I undertook when I started training as a solicitor 26 years ago. It was, and still is, quite an involved procedure, which causes several months of delays in progressing claims. That is several months which some of our clients, such as mesothelioma sufferers, simply do not have to live. This procedural inconvenience therefore did not simply delay justice, but deprived some asbestos victims of any justice at all in their own life times.
The common sense solution has always been to allow claimants to sue the insurers directly. This after all is a remedy that has already been available against motor insurers for several years. In fact, it was almost 20 years ago when the Law Commission first recommended giving claimants this right of action in employer liability claims. One of the last acts of Gordon Brown’s outgoing Labour government was to try to bring that right into effect through the Third Parties (Rights Against Insurers) Act 2010. Unfortunately, drafting errors meant that the Act just did not work.
Subsequent governments did not act quickly to put right the errors. However, they have finally done so. From 1st August the now repaired Act will allow someone with historic industrial diseases like mesothelioma and asbestosis to sue the insurer of his previous employer direct, if the employer has gone out of business. I myself already have two asbestos disease claims lined up to start against insurers next month.
This is a sensible, welcome change. It is just a shame that it took six years after the original Act for this reform to come into effect.
According to some despite waiting six years for it the new Act is currently of little use. The new Act is said not to apply where both the insured’s liability was incurred and their insolvency happened before the commencement date. I have just had an insurer argue that this means the Act can only apply to claims for asbestos/other disease diagnosed after 1st August (unless the insolvency happens after then). But when is the “liability incurred”? This is not defined as such in the Act, but the Act does talk about when liability is “established” as being when there is e.g. a court judgment or an agreement to pay a compensation sum. I would argue it is that liability to pay compensation which is being referred to here. After all that is the liability which would in turn trigger the insurer’s liability. Court proceedings using the Act are to establish that liability. Until such time as there is a judgment or order to pay the liability has not arisen and it is only a potential liability.
Jeremy Horton specialises in mesothelioma and other asbestos disease claims. If you would like to ask Jeremy a question about an asbestos disease claim please contact him on 01622 680415 or at JeremyHorton@brachers.co.uk