So what is the problem? Surely an Act that has already been delayed for so long must have been finely honed to meet its apparently simple purpose? Unfortunately not.
It doesn’t take too long to go through the Act to find the problem. Section 1 (1) (a) tells us that the Act applies if “a relevant person [i.e. the former policyholder], incurs a liability.”
This drafting means that the Act will only apply if the liability is incurred after the 1st August 2016. This seems a straightforward concept but leads to all sorts of problems in a long-tail disease case. When is a liability ‘incurred’ in, say, a mesothelioma case? The closest to a consideration of this question was in the policy trigger cases of Bolton and Durham.
Unhelpfully, although both heard a mass of evidence about this issue, neither made a formal finding on it.
The Bolton decision appears to endorse a point ten years before onset of symptoms, while Durham seems to go for five years. Most commentators prefer this five year point. This would mean that the Act won’t actually apply in mesothelioma cases until 2021. So with indivisible cancer cases, the position may be uncertain but at least we have something to go on. Things get more complicated when we look at divisible long-tail cases.
The recent Court of Appeal asbestosis case of Carder walks heavy boots across this terrain. The Court of Appeal decision here said that loss can be sustained, and liability incurred, even if it is so small that it can’t be measured. If it can’t be measured, how can it be fixed in time?
It seems pretty unlikely that Parliament meant to get into these very difficult questions when it passed the Act, but that is what the drafting does.
Taken to its logical conclusions this means that each case would have to be subject to detailed forensic examination of the facts interpreted by expert opinion before the parties can say whether the Act applies.
This is so plainly contrary to the Act’s obvious aims that it seems unlikely to continue. Either the Act will be amended or the courts may stretch construction to breaking point to equate ‘liability’ with ‘symptoms’ - though even this would require some individual factual and medical assessment of each case.
In the meantime, insurers and claimants will have to wrestle with Parliament’s mess.
In many cases insurers will do what they have always done - waive the need for a claimant to restore. In others there will be good reason to insist that the claimant restores.
The insurer might think the case is low value and without merit. There is nothing wrong in expecting the claimant to demonstrate faith in their own claim with an investment, especially post QOCS.
Insurers may want to pursue a subrogated recovery against a non-insurer. They need a company’s shoes to stand in to do this, and insurers’ rights to restore are more limited than claimants’.
Claimant solicitors may need to hold onto their Companies Court guides for a little longer.
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