Insurance and reinsurance in theFairchildenclave

Abstract

The dreadful disease of mesothelioma, caused by exposure to asbestos, has a number of features that pose almost intractable problems for tort law and liability insurance, notably the time lag of some 35 years between exposure and injury, and the accepted current impossibility of science proving exactly which exposure has given rise to the disease. The Supreme Court has addressed tort and insurance issues on no fewer than six occasions, most recently inZurich Insurance PLC UK Branch v International Energy Group Ltd (IEG), a case in which a specially convened seven-judge panel split 4:3 on the correct analysis of the insurance position. This paper analyses the reasoning and its implications. As will be seen,IEGis unlikely to be the end of the story. Most of the cases have involved exposure of employees to asbestos, and discussion is directed primarily to that context. A brief outline of the authorities will suffice to set the background toIEG.