Employers’ Liability Insurance ‘Trigger’ Litigation: BAI (Run Off) Ltd v Durham and Others: SC 28 Mar 2012

The court considered the liability of insurers of companies now wound up for mesothelioma injuries suffered by former employees of those companies, and in particular whether the 1930 Act could be used to impose liability. The insurers now appealed against findings that some policies, those which insured against injury ‘sustained’ during the policy period, as opposed to those policies which covered injury ‘contracted’ during the policy period, liability only at the stage when injury was manifested.
Held: The insurers’ appeals failed.
In construing the policies the court should look at them as a whole, and not concentrate exclusively on individual words and phrases in isolation. Section 1 of the 1969 Act was also a clear guide n favour of requiring insurance on a causation basis. The word ‘contracted’ looked to the causation of a disease, rather than its later development or manifestation. ‘Contracted’ in the context of disease looks to the initiating or causative factor of the disease. Although ‘sustained’ might at first be taken to refer to the injury becoming apparent, the underlying purpose of Employers’ Liability insurances looks to the initiation or causation of the accident or disease which injured the employee, and therefore a disease might properly be said to have been ‘sustained’ by an employee in the period when it was caused or initiated, even though it only developed or manifested itself later.
For these policies, the negligent exposure of an employee to asbestos during the policy period had a sufficient causal link with the subsequently arising mesothelioma to trigger the insurer’s obligation to indemnify the employer.


Lord Phillips, President, Lord Mance, Lord Kerr, Lord Clarke, Lord Dyson


[2012] UKSC 14, 125 BMLR 137, [2012] PIQR P14, [2012] 1 WLR 867, [2012] 2 All ER (Comm) 1187, [2012] 3 All ER 1161, [2012] Lloyd’s Rep IR 371, [2012] ICR 574, UKSC 2011/0031


Bailii, Bailii Summary, SC Summary, SC


Third Party (Rights against Insurers) Act 1930, Employers’ Liability (Compulsory Insurance) Act 1969, Compensation Act 2009 3


England and Wales


ContrastedBolton Metropolitan Borough Council v Municipal Mutual Insurance Ltd CA 6-Feb-2006
The deceased had come into contact with asbestos when working on building sites for more than one contractor. The claimant here sought contribution from the defendants for the damages it had paid to his estate. The issue was as to liability on . .
At first instanceEmployers’ Liability Policy ‘Trigger’ Litigation; Durham v BAI (Run off) Ltd etc QBD 21-Nov-2008
The court heard six claims against companies restored to the register of companies to make claims under their insurance policies for personal injury in the form of death from mesothelioma from asbestos, and particularly whether liability could be . .
CitedFairchild v Glenhaven Funeral Services Ltd and Others HL 20-Jun-2002
The claimants suffered mesothelioma after contact with asbestos while at work. Their employers pointed to several employments which might have given rise to the condition, saying it could not be clear which particular employment gave rise to the . .
CitedSienkiewicz v Greif (UK) Ltd; Knowsley Metropolitan Borough Council v Willmore SC 9-Mar-2011
The Court considered appeals where defendants challenged the factual basis of findings that they had contributed to the causes of the claimant’s Mesothelioma, and in particular to what extent a court can satisfactorily base conclusions of fact on . .
CitedBarker v Corus (UK) Plc HL 3-May-2006
The claimants sought damages after contracting meselothemia working for the defendants. The defendants argued that the claimants had possibly contracted the disease at any one or more different places. The Fairchild case set up an exception to the . .
Appeal FromEmployers’ Liability Insurance ‘Trigger’ Litigation, Re CA 8-Oct-2010
Companies restored to the register, and the personal representatives of former employees, appealed against rejection of their claims from the insurers of the former companies for damages from mesothelioma following exposure to asbestos during . .
CitedCharter Reinsurance Co Ltd v Fagan and Others HL 24-May-1996
The re-insurers appealed against a finding that they were liable to make payment under a contract which required them to pay ‘sums actually paid.’ They said that the company having become insolvent, no payment would in fact be made.
Held: The . .
CitedIn re T and N Ltd and Others (No 3) ChD 16-Jun-2006
The court considered the application of ‘the bankruptcy template of section 382 to the rules governing the winding up of companies’.
Held: The phrase ‘obligation incurred’ in Rule 13.2(1)(b) was inapt to describe a common law duty of care in . .

Cited by:

CitedRecovery of Medical Costs for Asbestos Diseases (Wales) Bill (Reference By The Counsel General for Wales) SC 9-Feb-2015
The court was asked whether the Bill was within the competence of the Welsh Assembly. The Bill purported to impose NHS charges on those from whom asbestos related damages were recovered.
Held: The Bill fell outside the legislative competence . .
CitedZurich Insurance Plc UK Branch v International Energy Group Ltd SC 20-May-2015
A claim had been made for mesothelioma following exposure to asbestos, but the claim arose in Guernsey. Acknowledging the acute difficultis particular to the evidence in such cases, the House of Lords, in Fairchild. had introduced the Special Rule . .
Lists of cited by and citing cases may be incomplete.


Updated: 07 October 2022; Ref: scu.452846