Supreme Court rejects insurers' Article 1 challenge to Scottish Act on damages for asbestos-related conditions  

AXA General Insurance Limited and others v The Lord Advocate and others [2011] UKSC46 judgment

On 12th October 2011 the Supreme Court unanimously dismissed an appeal brought by UK insurance companies who challenged the lawfulness of an Act of the Scottish Parliament reversing the House of Lords decision in Rothwell & Others v Chemical & Insulating Co Ltd [2007] UKHL 39, [2008] AC 281. It will be recalled that in 2009 in response to Rothwell, the Scottish Parliament enacted the Damages (Asbestos-related Conditions) (Scotland) Act 2009. The Act provides that asbestos-related pleural plaques and certain other asbestos-related conditions constitute personal injury which is actionable under Scots law.

Commentary

Plainly, the insurers were never going to be happy with that Act and sought to challenge the lawfulness of it on the basis that it was incompatible with their rights under article 1 of Protocol 1 to the ECHR – that is, the Act is an interference with the peaceful enjoyment of existing possessions of the insurers, ie their money. The Supreme Court rejected the insurers appeal. There was another constitutional challenge which was also rejected by the Supreme Court (I leave it to others to comment on that aspect of the case). The Supreme Court recognised the right of the Scottish Parliament to legislate on matters of public interest for the benefit of its citizens and found the Act was a legitimate and proportionate means of addressing a social policy aim and a proper use of legislative power. Indeed, Lord Hope stated:

“Can it be said that the judgment of the Scottish Parliament that this was a matter of public interest on which it should legislate to remove what was regarded as a social injustice was without reasonable foundation or manifestly unreasonable? I do not think so. There is no doubt that the negligence of employers whose activities were concentrated in socially disadvantaged areas such as Clydebank had exposed their workforce to asbestos and all the risks associated with it for many years. The anxiety that is generated by a diagnosis of having developed pleural plaques is well documented and it had been the practice for over 20 years for such claims to be met, albeit without admission of liability. The numbers of those involved, and the fact that many of them live in communities alongside people who are known to have developed very serious asbestos-related illnesses, contributed to a situation which no responsible government could ignore.

It seems to me that the Scottish Parliament were entitled to regard their predicament as a social injustice, and that its judgment that asbestos-related pleural plaques should be actionable cannot be dismissed as unreasonable” (see para 33).

The Northern Ireland Assembly has passed a measure which is, in all material respects, identical to the Scottish Act. This aspect of the case has no immediate impact on England and Wales. Which leaves those people in England and Wales who have developed pleural plaques as a consequence of the inhalation of asbestos still without a remedy and unable to be compensated.