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An insurer,
who was on risk for a period of exposure which had materially contributed
to the deceased employee contracting mesothelioma, was responsible in
full for the claim against the employer, notwithstanding a "rateable
portion" clause in the policy. The widow therefore succeeded in
full in her claim under the Third Parties (Rights against Insurers)
Act 1930.
Claim by
the widow and executrix of the estate of the late Arthur Phillips under
the Third Parties (Rights against Insurers) Act 1930 for payment by
the defendants of the balance of a judgment obtained against his former
employer, Kinkia Ltd.
The deceased,
Arthur Phillips, was employed by Kinkia between 1955 and 1957 and again
between 1959 and 1970, during which time he was exposed to asbestos
dust and subsequently contracted malignant mesothelioma. Kinkia's negligence
was admitted. The defendants were the insurers of Kinkia only between
1959 and 1968 and for that reason refused to pay the whole of the judgment,
which had been entered by consent against Kinkia. They submitted that
they were only liable for a proportion of the damages corresponding
to their period of insurance compared with the total period of Mr Phillip's
employment with Kinkia. Condition 6 of the relevant employer's liability
policy was a standard "rateable proportion" clause providing
that if other insurance covered the same liability the underwriters
should not be liable to pay or contribute more than their due proportion
of the claim.
It was
necessary to focus on the nature of the risk covered by the relevant
policy even though the policy language at the time had not yet developed
so as to address the full complexity of asbestos-related diseases. The
approach adopted in Fairchild v Glenhaven Funeral Services Ltd (2002)
was applied as mesothelioma was an indivisible disease. It was irrelevant
that the fatal fibre may have been ingested at some point outside the
period of the defendant's liability. Condition 6 plainly applied to
cases of double insurance and not to successive policies and did not
permit the defendants to limit their liability to a contribution rather
than an indemnity. Any insurer on risk for a period of employment/exposure
that would have materially contributed to M Phillips contracting mesothelioma,
as the defendants were, would be responsible in full for the claim.
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