Insurers challenge over asbestos compensation law may provoke new rift over Supreme Court powers say experts. A NEW RIFT between the Scottish Government & the UK Supreme Court over the extent of the London based court’s powers to affect Scottish cases & law making powers may come in the next few weeks (as reported in the Sunday Herald : Hammer of the Scots) if a ruling in the latest stage of the Insurers challenge against the Damages (Asbestos-related Conditions) (Scotland) Act 2009, now before the Supreme Court, goes against the Scottish Parliament’s ‘honourably intended’ law to allow victims of asbestos contamination in Scotland who have developed the condition known as PLEURAL PLAQUES to receive compensation after a 2007 House of Lords ruling in the Insurance companies favour ended the right to compensation for pleural plaques across the UK.
The Insurance companies took issue with the Scottish Government’s introduction of legislation in the Scottish Parliament to reverse the House of Lords decision, lobbying against its passage through the Scottish Parliament and then unsuccessfully fighting to have it overturned in the Scottish Courts. This latest challenge by the Insurers to have the Damages (Asbestos-related Conditions) (Scotland) Act 2009 overturned on Human Rights (ECHR) grounds or on common law grounds, asks the Supreme Court :
(1) Whether the Damages (Asbestos-related Conditions) (Scotland) Act 2009 (“the 2009 Act”) infringes the appellant insurance companies’ right under Article 1 of Protocol 1 of the European Convention on Human Rights and is thereby outwith the legislative competence of the Scottish Parliament by virtue of section 29(2)(d) of the Scotland Act 1998 (“the 1998 Act”);
(2) Whether the Court of Session as part of its supervisory jurisdiction may review and reduce legislation passed by the Scottish Parliament on grounds other than those set out in the 1998 Act;
(3) If such review is available, whether the 2009 Act is invalid on irrationality grounds.
The ruling from the Supreme Court, expected in August will be interesting in that even if its judges find the Scottish 2009 act competent in terms of ECHR legislation and find no breeches of the insurance companies rights under Article 1, the Supreme Court may be put in a position on ruling whether the 2009 Damages Act, or indeed any legislation passed by the Scottish Parliament can be challenged under common law, a nightmare scenario which is bound to stir up more controversial comments about the Supreme Court’s role by Scottish politicians and the First Minister when the Supreme Court eventually makes known its decision in the case.
More information on the bitter, costly battle over the Damages (Asbestos-related Conditions) (Scotland) Act 2009 was revealed today in a response to a Freedom of Information request to the Scottish Government who have revealed a massive £341,857.79 of public funds have been spent on legal fees defending against the Insurers, who have already lost two challenges against the new law at Scotland’s Court of Session. The cost to taxpayers is likely to rise whatever the outcome, especially if the UK Supreme Court rules in the Insurance companies favour.
I reported earlier on the Insurers failure to overturn the Damages (Asbestos-related Conditions) (Scotland) Act 2009 HERE, the first hearing of the case in the Court of Session’s Outer House (Lord Emslie’s 2010 dismissal of the Insurers case) and the second challenge in the Inner House (Lord Hamilton’s dismissal of the reclaiming motion).
Avira, AXA Insurance, Zurich and the infamous Royal Sun Alliance (who also insure all Scottish solicitors via the Master Policy) were represented at the Court of Session by the Dean of Faculty himself, Richard Keen, and Scots law firm Brodies LLP. However, the big name legal team proved to be the big failure in the Scottish Courts which most people had hoped for and the Insurers failed to have the 2009 act of the Scottish Parliament struck down.
The Judiciary of Scotland website reported on the Lord President's final ruling of earlier this year, stating : The First Division of the Court of Session has issued its judgment in the above case, in which the petitioning insurers (AXA and Others) challenge the lawfulness of an Act of the Scottish Parliament – the Damages (Asbestos-related Conditions) (Scotland) Act 2009. That Act provides that asbestos-related pleural plaques, and certain other asbestos-related conditions, constitute personal injury which is not negligible and is therefore actionable under Scots law. This statutory provision in effect reverses, for Scotland, the decision of the House of Lords in Rothwell v Chemical Insulating Co Ltd.
The challenge was on two bases: first, that the legislation was unlawful at common law and, secondly, that it infringed the insurers’ property rights under Article 1 of Protocol 1 to the European Convention of Human Rights. The court has rejected the challenge at common law. As to the challenge based on the Convention rights, it has held that the insurers’ rights are interfered with, but that in the whole circumstances that interference was justified. It has, accordingly, rejected the challenge also on that ground.
The passage of the asbestos compensation laws at Holyrood during 2008 saw legal representatives for the Insurers tell MSPs at the Justice Committee that Pleural Plaques, an asbestos related condition “were good for you”, a statement widely reported in the media along with VIDEO FOOTAGE from the Scottish Parliament.
Dr Pamela Abernethy of Edinburgh law firm Simpson & Marwick & the Forum of Insurance Lawyers told MSPs : ‘plaques are a good thing'
Asked for comment on the Insurers Supreme Court challenge to widely supported & what many regard as a positive piece of legislation from the Scottish Government & Scottish Parliament, a Scottish Government spokesman said: "The Damages (Asbestos-related Conditions) (Scotland) Act was passed with overwhelming support in the Scottish Parliament, offering comfort to people with pleural plaques that they can claim compensation for the condition. The Act was found to be legal by the the Court of Session and has now been referred to the UK Supreme Court.”
The spokesperson continued : “Given that the case is currently live, it would be inappropriate to comment further."
Should the UK Supreme Court be able to rule on the eligibility of the Scottish Parliament to make legislation particularly when the vested interests of big business with easy access to legal teams and never ending finance can buy access to justice and possible changes to Scots law when others cannot ? One thing is for sure, if it does, we can expect a barrage of criticism from all quarters against its authority.
Here we certainly have a case which may prove to some there is no clear cut position on whether the Supreme Court is good or bad for Scotland in its current format .. and indeed, some may be left wondering whether the Human Rights of big business to keep its profits instead of paying out compensation to victims is indeed, a human rights issue or not.
Personally, I can think of a few other Human Rights cases in Scotland more deserving of the courts time, but then again, the people I am thinking of have little or no access to legal representation … unlike the Insurers who have.
My previous coverage of the Scottish Government’s 2009 asbestos compensation legislation is here : Damages (Asbestos-related Conditions) (Scotland) Act 2009 - The story so far