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PI and Civil Litigation

Law - practice - procedure

07 AUG 2015

Zurich Insurance PLC UK v International Energy Group LTD (2015) [2015] UKSC 33

Zurich Insurance PLC UK v International Energy Group LTD (2015) [2015] UKSC 33
Mesothelioma – Apportionment – Employers’ Liability – Employer’s Liability Insurance – Compensation Act 2006

 20 May 2015

 Supreme Court: Lord Neuberger PSC, Lord Mance JSC, Lord Clarke JSC, Lord Sumption JSC, Lord Reed JSC, Lord Carnwath JSC, Lord Hodge JSC

 The court held that the common law rule of proportionate recovery in mesothelioma cases, established in Barker v Corus [2006] UKHL 20 continues to apply in Guernsey, where the Compensation Act 2006 does not apply. This meant that the insurer (Zurich), the appellant in this case, was only liable to indemnify the employer (IEG), the respondent, for the period when they provided insurance. This reversed the decision made by the Court of Appeal

 This appeal concerned how the special rules of liability and causation for claims by victims of mesothelioma developed since Fairchild v Glenhaven apply in Guernsey. That case decided that a victim can hold liable all employers who negligently exposed them to asbestos. In Barker it was held that each employer was only liable pro-rata to the period for which they were responsible for the exposure. This was superseded by the Compensation Act 2006 making each employer liable in full, with right of contribution among themselves. Following this, the case of Trigger [2012] UKSC 14 held that for insured employers, the necessary causation is satisfied in mesothelioma cases by the employer’s negligent exposure of the victim to asbestos, with the result that the insurer must indemnify the employer against the liability in full.

 The case arose from a successful claim for compensation made by Mr Carré, who was exposed to asbestos dust by his employer, Guernsey Gas Light Co Ltd (“GGLCL”). The defendant was successor in title to GGLCL. Midland Assurance Ltd provided liability insurance for 6 of the 27 year period during which Mr Carré was exposed. The claimant, as successors to Midland’s liabilities therefore maintained that they were liable to meet 22.08% of the defendant’s loss and defence costs. The trial judge ordered the claimant to meet 22.08% of the compensation but 100% of defence costs. The Court of Appeal ordered the claimant to pay 100% of both the compensation and defence costs. The claimant appealed both decisions.

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It was held that as proportionate recovery continues to apply in Guernsey the claimant’s appeal should be allowed in respect of compensation, but the court dismissed the appeal in relation to defence costs as these would have been incurred in full defending the claim whatever the total period of exposure. The court concluded that had the position in Guernsey been as in the UK under the Compensation Act 2006, the claimant would have been liable in the first instance to meet the defendant’s claim in respect of the compensation paid in full, but would have been entitled in respect of the 21 years not covered by the Midland insurance, to claim pro rata contributions from both the defendant and any other insurer.


This case contains an interesting discussion on the extent to which the departure from established legal principles in Fairchild for sound reasons has had unintended legal consequences, described in the judgment by Lords Neuberger and Reed as a “juridical version of chaos theory”.

Joseph Carr & Hannah Swarbrick, Anthony Gold