To all those reading this I am David Gibbs; I am a Lecturer in Law at the University of East Anglia.

I created this blog as a general out-let of ideas for my research, as well as keeping those interested up-to-date on my research and general interests.

I completed my PhD thesis at the University of East Anglia in 2014. The thesis was recommended for the award of PhD with no corrections. My external examiner was Prof. Simon Deakin (Cambridge) and internal examiner was Prof. Morten Hviid.
My PhD research centred on directors' duties and company law. The thesis was titled 'Non-Executive Self-Interest: Fiduciary Duties and Corporate Governance'. It was a doctrinal and empirical study on whether self-interest was suitably controlled amongst non-executive directors.

My supervisors were Prof. Mathias Siems, Prof. Duncan Sheehan, Dr. Sara Connolly and Dr. Rob Heywood

All opinions of any existing or future blogpost are my own. They do not necessarily represent the views of any of my associated institutions.
ORCID 0000-0002-6596-8536

Friday, 7 October 2011

TRIGGER - Municipal Mutual Insurance Limited v Zurich Insurance Company and Adur District Council: What triggers insurers' liability to the insured?

An interesting case is due to be heard in the Supreme Court this year regarding what "triggers" for liability of an insurer to indemnify the insured within any policy period.

It is of particular interest because of the facts and the fact Adur District Council is my home town local council.

The point in question is in regard to the construction of the employers' liability policy, which provided an indemnity if an injury or disease is sustained or contracted during the period of insurance.

Nine appeals are being heard by the Supreme Court regarding six separate actions. They arise from the deaths of employees who contracted mesothelioma who inhaled asbestos fibres during employment. The employee's personal representatives or the employers liable to them are seeking to recover from the employer's insurers under policies of the employers' liability insurance covering periods from the late 1940s to 1998.

The principle issue is what triggers liability for an insurer to indemnify the insured: in particular whether it is tortious exposure of a victim to asbestos dust or the onset of mesothelioma.

The policy logically was in force when the asbestos dust was inhaled but not 40 years later when the disease manifested itself.

The Court of Appeal decision can be found under the citation [2010] EWCA Civ 1096 containing 352 paragraphs and 113 pages on the PDF download from Westlaw.

The High Court had originally disagreed with the insurers that the disease had only be contracted when it manifested itself as a tumour and asserted that it had done so when the employees inhaled the dust.

Rix LJ and Stanley Burton LJ allowed the appeal in part. 

Rix LJ stated that "sustaining" an injury prima facie looked to the injury and not the cause. However, accordingly the phrase "disease contracted" prima facie referred to the disease's causal origins. Also, the commercial purpose of the insurance pulled towards the causal origins of the disease and the Court of Appeal stated that the commercial purpose should prevail.

In obiter Rix LJ also stated that a decision in the case of Bolton [2006] EWCA Civ 50 was doubtful, but was bound by precedent, which concluded that mesothelioma was not an "injury" until its onset. He continued that it was the risk of mesothelioma created by exposure which was the damage.

Stanley Burton LJ believed there was little gained in discovering the commercial purpose of the policy and one must look to the terms of the policy. He opined that the disease was caused in any year there was substantial exposure to asbestos.

Smith LJ dissented in part but believed the judge in the high court had been right to find there was no difference between a policy which used "sustained" or "causation" wording. Policies with "sustained" wording had to cover employers liable in respect of tortious exposure of an employee during the policy period.

The Supreme Court hearing is due in December.

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