After hearing submissions from the parties over a period of almost two weeks, concluding on 15th December, the Supreme Court has now reserved its judgment in the EL Trigger Litigation appeals.

The litigation involves six lead actions, in which Watmores represents one of the parties, Municipal Mutual Insurance. The courts have been asked to clarify the meaning of policy wordings in Employers Liability insurance policies insofar as they apply to mesothelioma claims, where the wording is:

shall sustain any bodily injury or disease or

claim for injury sustained or disease contracted

or similar wordings, the main feature being that they do not cover injury caused during the currency of the policy but injury sustained and in some cases disease contracted.

A typical scenario would be a claim where the victim has been diagnosed with mesothelioma in recent years but the mesothelioma was caused by exposure to asbestos fibres in the 1960s or 1970s. He has a valid claim against his employers, but they have a policy which insures in respect of injury sustained during the currency of the policy, and the policy is no longer current. At first instance the High Court determined that "sustained" means "caused" for the purpose of an EL policy. That, for many lawyers, was an unsatisfactory decision undermining the principle that a contract must mean what it says.

In the Court of Appeal the three judges were unable to agree on any single interpretation. The Supreme Court has to consider whether the inhaling of asbestos fibres amounts to an injury for the purpose of triggering policy liability, whether "contracted" is synonymous with "suffered" or "sustained" or refers to a process dating back to inhalation, and whether it is legally proper to re-interpret the policy wordings to comply with a perceived commercial purpose which in the opinion of some of the lawyers was to offer insurance on a causation basis even if the policy does not use the word "caused".

For local authorities faced with mesothelioma claims resulting from exposure decades ago, the decision will to some extent determine whether the claims will be paid by insurers or out of their current assets. For insurance companies, whether in run off or otherwise, it is vital to make payments only in accordance with their legal liabilities so that they can conserve their funds for the benefit of shareholders or, in the case of Mutuals, the benefit of all Members and Policyholders.