Antonio Bueno QC and Patrick Limb QC (instructed by Simpson & Marwick Solicitors ) for the claimant; Leigh-Ann Mulcahy QC, Jamie Smith and Nikki Singla (instructed by DWF LLP ) for the defendant.
The claimant settled an employee’s action for negligence and breach of statutory duty in exposing him to asbestos. The claimant then claimed indemnity from the defendant insurer for the settlement amount plus costs. The claimant’s policy of insurance, which it had for six of the 27 years during which the employee worked for them, provided that the defendant would indemnify the claimant if any employee sustained any bodily injury or disease “caused during any period of insurance and arising out of and in the course of his employment by the [claimant]”. The judge found that the claimant had a right to an indemnity in relation to the costs but otherwise its indemnity was limited based on the proportion of time the employee worked for the claimant for which it was insured. On appeal the claimant sought full indemnity.
Appeal allowed. The judge’s reasoning was unsustainable in the light of Durham v BAI (Run Off) Ltd [2012] 1 WLR 867. The court rejected the defendant’s contention that because it had received a premium for only six of 27 years exposure it was unfair to provide full indemnity. Once it was accepted that exposure during any policy period met the causal requirement for employer’s liability to the victim for which the employer was entitled to indemnity under the terms of the policy, to withhold part of that indemnity would deprive the employer of insurance coverage for which it paid. To regard an employer as “self-insuring” in relation to any period for which it was unable to find details of any coverage that might have been issued could itself produce injustice.
Decision of Cooke J [2012] EWHC 69 (Comm) reversed.