Solicitors claim insurers ignore Fairchild precedent in asbestos damages actions

UNSUED EXPOSURE: insurers suggest compensation should be reduced proportionately

Concerns are growing among personal injury solicitors that insurers in asbestos claims are out to slash victims' damages or push cases to appeal by arguing points that have already been dealt with in last year's landmark Fairchild decision.

The problem arose after firms representing mesothelioma victims reported that insurers were suggesting that damages should be reduced proportionately for exposure that is unsued, for example, because the employer is no longer in business or it occurred too early in time.

It had been hoped that the House of Lords' ruling in Fairchild had cleared up any ambiguity over the liability of insurers when it said that cases should be settled quickly with a separate decision later apportioning claims between different employers who could have caused the cancer (see [2002] Gazette, 28 June, 5).

But Ruth Davies, a partner in Manchester firm John Pickering & Partners, which acted for two of the three Fairchild claimants, said the argument was coming up routinely.

'If [insurers] were successful, this would have serious consequences for mesothelioma claimants,' she warned.

'Damages could be reduced drastically in some cases.

Any appeal might again have the effect of delaying affected mesothelioma claims.'

Adrian Budgen, a partner at Irwin Mitchell, said his firm had also experienced problems.

'Following Fairchild, we welcomed the clarity but ever since, the insurance industry has been trying to undermine it by seeking apportionment and also by lobbying the government to introduce some sort of scheme,' he complained.

'They are launching a two-pronged attack.'

Jason Rowley, president of the Forum of Insurance Lawyers, said that as far as he was aware, the unsued exposure issue was effectively ended by Fairchild, but admitted that some of the smaller insurers might still be bringing it into play to settle at a lower figure.

'That in itself is just part of the negotiation process and occurs in all sorts of claims,' he said.

'Both sides put forward arguments which they know are optimistic, not just defendants.'

A spokeswoman for the Association of Personal Injury Lawyers said it would be monitoring the situation closely.

Paula Rohan