There are six consolidated actions:

Durham v Builders Accident Insurance (Run Off) Limited (In scheme of Arrangement)

Fleming & Addleston v Independent Insurance Company Limited (In Provisional Liquidation)

Edwards v Excess Insurance Company Limited

Thomas Bates & Son Limited v Builders Accident Insurance (Run Off) Limited (In scheme of Arrangement)

Akzo Nobel UK Limited Plc v Excess Insurance Company Limited

Municipal Mutual Insurance Limited v Zurich Insurance Company & Others

This is a link to the Judgment

The Key Findings

• The injury of mesothelioma occurs not when the asbestos is inhaled, but at a later date. On the medical and scientific evidence presented to the court, that date was five years prior to diagnosability. At five years prior to diagnosability, angiogenesis (the development of a blood supply to maintain the viability of the tumour) occurs. At that point a potential tumour becomes an actual tumour. The five year period might be greater or less if there is medical evidence in a specific case to suggest quicker or slower growth.
• The concept of “injury” within the policies equates to “actionable injury”
• The term “sustained” means the same as “occurred” (probably obiter)
• The Court of Appeal decision in Bolton v MMI (which dealt with the interpretation of a PL wording) does not bind the court in respect of an EL wording
• MMI was not estopped from refusing cover by reason of its longstanding practice of paying on an exposure basis prior to the Bolton v MMI decision
• The Employers Liability (Compulsory Insurance) Act does not require that policies be written on a causation basis
• There is a fundamental problem, namely that of the ex-employee. The policy wordings refer to injuries sustained by a person who “is” employed by the insured, and the natural interpretation of the words is that no cover would exist in respect of a former employee who sustains his injury after termination of employment, which would give rise to injustice
• The policy wordings must be interpreted by reference to the factual matrix as and when the policies were issued. On the factual matrix as determined by the judge, it is necessary that sustained and contracted must be construed in their context and they mean the same as a causation test. In short, if an EL policy says “injury sustained” it must be taken to mean “injury caused”. Thus, if at the time of exposure to asbestos the employer has a policy written on an “injury sustained” basis, it will respond to the claim in exactly the same way as if the wording was “injury caused”. Implicitly, a policy that covers the employer on the date when the tumour begins to grow but not at the date of exposure, will not respond to the claim.

"I conclude, in relation to the policies in issue before me, that they respond, just as would policies with caused wording, to claims against insurers where employers are liable on the basis of inhalation by employees during the policy period. They respond, consistently with other EL policies, in respect of mesothelioma claims, on an ‘exposure’ basis. For the purposes of these policies, injury is sustained when it is caused and disease is contracted when it is caused, and the policies fall to be so construed. The Claimants, employees and employers, therefore succeed in Actions 1 to 5 against the three Insurer Defendants in establishing entitlement to cover, under the six policies in issue in those Actions. As for Action 6, in which MMI is the Claimant, its action fails, which means that it, and not Zurich, save where Zurich accepts its liability under the First Select policy, are liable to indemnify the Local Authorities, as appropriate, under the first, second and third MMI wordings".

Watmores represents Municipal Mutual Insurance Ltd. Leave to appeal has been granted.