Weyer v RiverStone Insurance UK Limited – Bolton MBC v MMI Ltd revisited?

Mesothelioma is a cancer invariably caused by asbestos exposure. There is usually a very long ‘latency’ period between the relevant asbestos exposure and manifestation of the disease, generally considered to be 10 years as a minimum, but which can be in excess of 40 years or more. These characteristics have resulted in a surfeit of legal cases including cases deciding which insurance policy should indemnify mesothelioma claims.

In Bolton MBC v Municipal Mutual Insurance Ltd & Another [2006] 1 WLR 1492, the Court of Appeal (agreeing with the judge at first instance) found that liability under a public liability (“PL”) insurance policy providing cover for injury or illness "occurring” within the period of insurance was ‘triggered’ in respect of a mesothelioma claim not when the claimant was exposed to asbestos fibres, since no injury or illness had occurred at that stage, but when the malignancy developed.

In Durham v BAI (Run Off) Ltd [2012] 1 WLR 867, certain insurers sought to argue that their liability in respect of mesothelioma claims under certain employers’ liability (“EL”) policies which indemnified injury or illness which had been “sustained” or “contracted” during the period of insurance should be applied in the same way as in Bolton. The Supreme Court held that the policies should nevertheless be interpreted as if the policies indemnified injury or illness “caused” during the period of insurance, with liability falling on the EL insurer(s) on risk when the employee wrongfully inhaled the asbestos.

Mrs Mavis Weyer sadly died from mesothelioma on 8 May 2018, aged 79. She had contracted the disease from exposure to asbestos. Her late husband had carried out work with asbestos in the course of his employment as a thermal insulation engineer with a number of employers for many years, including with Kitsons Insulations Ltd (“Kitsons”) during the 1960s and 1970s. He brought asbestos dust home from his work in his hair and on his skin and clothing. Mrs Weyer was exposed to and inhaled some of this asbestos dust in the course of washing his overalls and from cleaning the house.

Mrs Weyer’s estate obtained judgment against Kitsons (now re-named Prescot (No.1) Ltd), a defunct company, in 2020. Mrs Weyer’s estate then alleged that RiverStone Insurance (UK) Ltd ("RiverStone") was obliged to meet the judgment against Kitsons pursuant to section 1 of the Third Party (Rights Against Insurers) Act 1930, and subsequently sued RiverStone for recovery of the sums that had been awarded against Kitsons. RiverStone had acquired the liabilities of insurance companies which had provided PL insurance to Kitsons between 1952 and 1985, including in relation to the periods of the late Mr Weyer's employment. 

RiverStone contended that the PL insurance issued to Kitsons was written on either an injury or illness "occurring" or "happening" basis. In the circumstances, it denied that this PL insurance was applicable, the late Mrs Weyer’s injury having become actionable long after the end of the period of insurance. RiverStone relied upon the decision in Bolton.

On the other hand, the claimant argued that the PL cover provided to Kitson’s should operate on an injury "caused" basis; the decision in Durham being applied so that a PL policy issued on an injury "occurring" or “happening” basis should be inferred (by reason of the “commercial purpose” of the policy) as applying to injury or disease caused during the period of insurance. The claimant alleged that the wording of RiverStone’s policy was distinguishable from the wording under consideration in Bolton or in the alternative that Bolton was wrongly decided. 

This case was listed for trial in January 2024. The claimant chose not to serve evidence from an insurance underwriting expert, despite the court having given permission for both parties to do so. 

The apparent tension between the decisions in Bolton and Durham was addressed within the insurance underwriting expert's report that was served on behalf of RiverStone. This highlighted the historic distinction in approach between EL and PL insurance, and contrasted the origins and development of EL and PL insurance coverage. What this evidence illustrated was that liability insurance issued on an injury "caused" basis was in fact the outlier and that coverage in respect of other types of liability insurance, including products liability, professional indemnity, D. & O. liability and cyber insurance is triggered either by a claim being notified to the insurer or the loss occurring during the period of insurance, no matter when the act or omission in question took place or the work giving rise to the claim was carried out.

The claimant has recently discontinued the claim in the face of RiverStone's denial and the expert evidence. As such, the law as it stands in Bolton remains, with the reconfirmation of established underwriting principles as they have always been understood. 

This distinction between EL and PL cover is likely to acquire even greater significance in light of the general increase in PL claims where injury manifests long after the events that are responsible. Whilst talc litigation is an obvious example in terms of mesothelioma, the issue is also relevant to other forms of injury, sports-related neurodegenerative diseases in particular coming to mind.