Employers’ liability and pleural plaques

The Damages (Asbestos-related Conditions) (Scotland) Act 2009, a measure of the Scottish Parliament not replicated by the UK Parliament, reverses the common law rule established in Rothwell v Chemical & Insulating Co Ltd [2008] AC 281 and provides that pleural plaques and related conditions are, with retrospective effect, deemed to constitute actionable harm. In AXA General Insurance Ltd and Ors v The Lord Advocate (Scotland) and Ors [2011] UKSC 46 certain insurers who had issued insurance policies complying with the Employers’ Liability (Compulsory Insurance) Act 1969 challenged the validity of the legislation on the basis that it imposed retrospective liabilities upon them. The Supreme Court unanimously rejected the insurers’ arguments.

Pleural plaques: the background

Pleural plaques are areas of fibrous lung tissue brought about by long-term exposure to asbestos. They develop many years after exposure to asbestos, and are discoverable by X-rays and CT scans, but in most cases they do not cause any impairment to health. For many years pleural plaques were recognised as actionable, and employers’ liability insurers were content to pay claims to indemnify employers. However, the number of claims began to increase in the 1990s, and medical evidence emerged that pleural plaques were benign. In the light of these developments, a series of test cases were brought. These made their way to the House of Lords, and in Rothwell v Chemical & Insulating Co Ltd [2008] AC 281 their Lordships held that pleural plaques did not give rise to a claim for physical harm, because there was no such harm. Further, although pleural plaques demonstrated that the lungs contained a significant amount of asbestos so that there was a risk of malignancy occurring, the anxiety flowing from such fear was not of itself actionable because there was no physical injury at the time.