Chapter 10: Historic Asbestos Exposure and Liability Insurance: Issues of Aggregation and Reinsurance
Rob Merkin and Jenny Steele 1. INTRODUCTION Claims for compensation for asbestos-related disease raise particular issues of “mass justice”, rather different from the issues associated with the design of group litigation mechanisms, for example. The issues posed by the mass nature of the claims have in principle been removed from the claim made by the injured party or dependant, and arise rather at the level of insurance, as numerous liabilities are dealt with by employers, their insurers, and their reinsurers. However, it has not been entirely possible to insulate claimants from the litigation which surrounds this level of the picture. Contest over the final destination of the liabilities has to some extent influenced both the law and the potential for settlement of claims at the level of tort liability. In the UK specifically,1 asbestos-related diseases have given rise to mass claiming against a range of former employers. The processes of litigation available to claimants are generally orthodox,2 but the principles developed in response to such tort claims have posed legal problems which cascade down to challenge the underlying mechanisms of loss distribution through the insurance market. The effects of mass claiming and the legal response to such claims are felt primarily at the level of insurance and reinsurance; and it is insurers – with whom the majority of liabilities are ultimately placed – who are to a large extent dictating the pattern of litigation. They may do this by contesting liability on the part of the insured; by contesting cover...
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