Court of Appeal has ruled that insurers cannot present 100 percent of employers’ liability mesothelioma claims to any year of cover they choose

In Equitas v Municipal Mutual Insurance Limited [2019] EWCA Civ 718 the Court of Appeal has decided that in the event of an insured employee being exposed to asbestos in multiple years of employers’ liability insurance, and the employers’ liability insurer settling the employer’s claim without allocating the loss to any particular year, the employers’ liability insurer is required to present any outwards claim in respect of that loss on a pro rata, time on risk basis for the purpose of calculating reinsurance recoveries, because the doctrine of good faith requires the claim to be presented on that basis.

The decision gives the reinsurance industry judicial guidance as to how employers’ liability mesothelioma claims (arising out of exposure to asbestos spanning a number of policy years) should be presented to reinsurers and that insurers cannot present 100% of a mesothelioma claim to any applicable year of reinsurance cover of its own choosing.

Colin Edelman QC acted for the for the Appellant, instructed by Michelle George and Jon Ogle of Norton Rose Fulbright LLP for the Appellant

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