Partner Article

A look at the Compensation Act 2006

– Compensation for asbestos-related mesothelioma Claimants

With Watson Burton Law Firm

A year and a half ago, on 25 July 2006, The Compensation Act 2006 received royal assent, the provisions within it bringing about a much discussed change in the law for victims of asbestos-related mesothelioma.

Section 3 (1) has unsurprisingly been welcomed with open arms by Claimants seeking to claim compensation from employers who had exposed them or a deceased family member to asbestos, which in turn caused mesothelioma. The section allows Claimants to recover the whole amount of their compensation from a single employer who exposed them to asbestos even if there is a long history of other employers who were also responsible for asbestos exposure.

Claimants need only identify one employer to claim against where any other employers are untraced and the employer’s liability insurer cannot be identified. S 3 (1) is beneficial to Claimants and detrimental to Defendant employers who will now pay the whole amount of compensation due regardless of the amount of asbestos exposure in that employment or elsewhere.

The position regarding these types of claims has not always been as advantageous to Claimants. In May 2006, just a few months prior to the Compensation Act coming into force, the House of Lords ruled in Barker v Corus UK Plc that the previously Claimant-friendly decision in Fairchild v Glenhaven Funeral Services should be overturned. In Barker, it was decided that Defendant employers were not jointly and severally liable and accordingly should only meet the proportion of damages that reflected their contribution to the victims’ exposure and injury.

Public outcry ensued as the majority of victims would have been exposed to asbestos during employment dating back 40-50 years. As a result, a large number of employers will now no longer exist and it would prove impossible to trace their insurer. It essentially meant that the victims would only receive a fraction of their compensation.

It is therefore the case that the Barker decision is no longer applicable and the Fairchild position has been re-instated, but improved with added benefits to Claimants, in particular that Section 16 of the Act makes Section 3 retrospective. The downside is that employers now face potential claims from former employees who are not obliged to include all former employers where asbestos exposure may have occurred. In the event of a successful claim, the named employer will have to meet 100% of the compensation due. Employers also face the difficulty of identifying their historical insurer on risk for the period of employment complained of and may have to meet the costs of these claims themselves.

If you have any queries relating to this article, or any other Personal Injury matter, please contact Danielle Watson at Watson Burton LLP on 0191 2444465 or email danielle.watson@watsonburton.com.

This was posted in Bdaily's Members' News section by Ruth Mitchell .