The problem of asbestos related diseases and uninsured employers

Asbestos related conditions are known as ‘long tail’ diseases. That is to say, they manifest themselves several years after the exposure to asbestos took place. In some cases, the symptoms do not manifest themselves until 50 or even 60 years after inhaling the toxic fibres.

This can cause significant problems for claimants with asbestos diseases. It is quite commonplace for a claimant to have been exposed to asbestos by one of their former employers who have long since been dissolved by the time the claimant is suffering from an asbestos related disease.

Employers’ liability insurance

In this situation, they key question is whether or not the employer had employers’ liability insurance at the time the claimant was exposed to asbestos while in their employment. If insurance was in place, we can make an application to the companies court to restore the defunct company to the register of companies at Companies House. Once they have been restored, we can issue court proceedings against them and, in the event of a successful claim, the insurers will have to pay the claimant’s damages. This is a process that the industrial disease team at Boyes Turner are very familiar with and we have successfully resolved many claims of this nature.

However, if the claimant’s former employer is defunct and they did not have any insurance in place when the claimant worked there, this process is of no help to the claimant. There is no benefit in restoring the claimant’s former employer to the register of companies and issuing court proceedings against them if there are no insurers to pay out in the event of a successful claim.

Employers’ liability insurance was not compulsory until the Employers’ Liability (Compulsory Insurance) Act 1969 came into effect on 1 January 1972. As such, there were many employers who did not have insurance before this date and, since many people were exposed to asbestos by their employers in the 1950s and 1960s, this is a particular problem in asbestos disease cases.

In many cases, claimants are simply unable to claim as their previous employer is defunct and did not have any insurance, meaning there is no – one to pay any damages to the claimant.

‘Dose related’ diseases

Asbestosis, pleural scarring and asbestos-related cancer are ’dose-related’ diseases. This means that the more asbestos a person is exposed to, the higher the risk for developing these diseases. The usual approach in such cases is to apportion the damages on a time exposure basis. For example, if a claimant worked for one employer for 5 years and another employer for 5 years (and the levels of asbestos exposure were similar with each employer), each employer would be responsible for 50 per cent of the damages awarded to the claimant.

If a claimant has a dose related disease they may be grossly under – compensated. For example, they may have worked with asbestos for 10 years, but their employer was only insured for two of these (that is to say, 20 per cent of the time that the claimant was working with asbestos). In this situation, they would only receive 20 per cent of the true value of their claim. This is known as a ‘Holtby discount’ after the Court of Appeal’s decision in the case of Holtby v Brigham & Cowan (Hull) Ltd [2000].

Diffuse Mesothelioma Payment Scheme

Thankfully, there is now a scheme in place to compensate claimants who were exposed to asbestos by a defunct employer with no insurance and have gone on to contract mesothelioma. This is called the Diffuse Mesothelioma Payment Scheme and is funded by a levy on insurers. The industrial disease team at Boyes Turner have successfully made many claims under the Diffuse Mesothelioma Payment Scheme on behalf of claimants in this situation.

However, claimants in this situation who are suffering from lung cancer, asbestosis or pleural thickening are simply unable to claim.

The situation is different for people who are injured in road traffic accidents due to the negligence of an uninsured driver. In this scenario, the innocent driver is able to claim through the Motor Insurers’ Bureau, which is an insurer funded organisation in place to compensate victims of the acts of negligence by uninsured drivers. This would seem to be perfectly reasonable. If someone is injured, through no fault of their own, by an uninsured driver, it hardly seems fair for them to bear their losses themselves.

However, there are also many people who, through no fault of their own, are suffering from lung cancer, asbestosis or pleural thickening and are unable to claim compensation as they were exposed to asbestos by an uninsured employer.

The obvious solution would seem to be to extend the scope of the Diffuse Mesothelioma Scheme to claimants who are suffering from other asbestos related conditions. Unfortunately, there are no plans to do this at the moment which means that many innocent claimants will not be compensated.