Lord Emslie defeats legal challenge over pleural plaques as Insurers ‘big name’ legal team fail to overturn Holyrood’s Asbestos compensation law

Insurers legal team was headed by Richard Keen QC, Dean of the Faculty of Advocates. Some good news to start 2010 as Scottish judge Lord Emslie yesterday threw out the Insurance companies legal challenge against the Damages (Asbestos-related Conditions) (Scotland) Act, which was voted through by MSPs in 2009 after Law Lords in England & Wales ruled against compensating people who had developed ‘pleural plaques’, as a result of exposure to asbestos.

Avira, AXA Insurance, Zurich and the infamous Royal Sun Alliance (who also insure all Scottish solicitors via the Master Policy) were represented by the Dean of Faculty himself, Richard Keen, and Scots law firm Brodies LLP, but the big name legal team proved the big failure most people hoped for.

In a 150-page judgment issued at the Court of Session, which can be read online here : OPINION OF LORD EMSLIE in the petition of AXA GENERAL INSURANCE LIMITED and OTHERS Petitioners; for Judicial Review of the Damages (Asbestos-related Conditions) (Scotland) Act 2009, Lord Emslie stated: "Not surprisingly, individuals diagnosed with pleural plaques are liable to become alarmed and anxious for the future, and this may severely reduce their enjoyment and quality of life. The diagnosis confirms significant asbestos exposure in the past, of which they may or may not previously have been aware; it underlines the much higher risk which they now face, many hundreds of times greater than for members of the population at large, of contracting lung cancer, mesothelioma or asbestosis; and in some cases it may bring to mind the suffering and perhaps death of friends, colleagues and relatives from these serious asbestos-related diseases.”

Lord Emslie concluded : “There is clearly room for differences of opinion as to whether the Parliament was right to legislate in the way it did, and it remains to be seen whether the 2009 Act will prove to have adverse legal or political consequences in years to come. But for all of the foregoing reasons I am unable to accept that the petitioners' complaints, either individually or collectively, come anywhere near the standard of "irrationality" which would be necessary in order to invalidate a primary Act of the Scottish Parliament. Whether that standard is, on comparative lines, to be derived from the Nottinghamshire and Hammersmith decisions in the House of Lords (as suggested in chapter IV of this opinion), or simply from traditional concepts of Wednesbury unreasonableness as judicially explained, is to my mind immaterial for present purposes. The petitioners plainly fail on either approach, and their common law challenge to the 2009 Act is therefore rejected.

I have previously reported on the Insurers legal challenge, where initially, they hoped the threat alone of a legal challenge against the Scottish Government’s proposed Asbestos Damages Bill would have been enough to scupper its success : Insurance firms with links to Scottish Government threaten legal challenge against Holyrood on asbestos claims reforms.

However, after the Bill was passed by the Scottish Parliament and became law, the threat became a legal challenge, which I reported on earlier, here : 'Money must come before life' as insurers & lawyers launch legal challenge against Scotland's asbestos compensation law

Let us remind ourselves again just how low some people in the legal profession will go to argue against a person’s health & wellbeing, where indeed, pleural plaques from asbestos exposure are most certainly NOT good for you, despite some lawyers feeling they are (presumably because their big moneyed insurance clients said so).

Dr Pamela Abernethy (lawyer, Simpson & Marwick WS, Edinburgh) - Asbestos related Pleural Plaques 'are good'

and the rest of that shocking episode here :

For further coverage, the Herald newspaper as always, excellently reports Lord Emslie’s commendable ruling :

Insurance giants defeated over asbestos damages law

heraldscotland staff

Insurance firms have lost a legal bid to overturn a new law which allows victims of an asbestos-related condition to claim damages.

Some of the biggest names in the insurance industry had challenged the law which came into force in Scotland last June.

But Court of Session judge Lord Emslie rejected their legal challenge.

His written ruling concluded: "There is clearly room for differences of opinion as to whether the Parliament was right to legislate in the way it did, and it remains to be seen whether the 2009 Act will prove to have adverse legal or political consequences in years to come."

But the judge said he does not accept that the insurers' complaints come anywhere near the standard of "irrationality" needed to invalidate an Act of the Scottish Parliament.

The legal battle centred on a condition known as “pleural plaques”, which are changes in the layers of tissue which lie between the lungs.

The changes can be caused by past exposure to asbestos but have no symptoms or ill-effects and are not considered a disease in their own right.

The new law in Scotland was intended to reverse the effect of a landmark House of Lords ruling that people with pleural plaques could not seek compensation.

But insurers opposed the move, and the action to overturn the new law was raised by Axa, Norwich Union, Royal & Sun Alliance and Zurich Insurance.

When the legislation was going through Holyrood insurers argued that the new law ignored medical opinion and underestimated the cost of potential claims.

At the start of the court battle in May last year they argued the new law broke the essential legal principle of “proof of damage” and resulted from an “unreasonable, irrational and arbitrary” exercise by legislators.

The insurance companies argued that the law breaks European Convention on Human Rights provisions on property rights and unreasonable legal interference, that it will benefit a small group of people who had suffered no legal harm and that it will cost insurers hundreds of millions of pounds, or more, by retrospectively changing insurance contracts.

But their challenge was contested by Scottish ministers and by some people with pleural plaques.

They argued the insurers’ challenge was wrong in law, and that it did not fall within the permitted grounds of challenge to Holyrood legislation set out in the Scotland Act.

They also argued that it was the place of insurers to launch the challenge, as the damages claims would actually be brought against negligent former employers and the insurers would be affected only indirectly.

In his ruling Lord Emslie upheld two of the insurers’ legal arguments: on whether they had a close enough connection to mount a legal challenge, and on whether to challenge an Act of the Scottish Parliament on common law grounds of “irrationality” is valid.

But he still rejected the overall challenge.

Labour MSPs welcomed the ruling.

Member for North East Scotland Richard Baker said: “This is the right judgment and reflects the fact that this move by insurance companies to overturn the will of the Scottish Parliament was both unfounded and unjust.

“Most importantly this is good news for all those in Scotland who have had to suffer the trauma of being told they have pleural plaques and will now be able to pursue damages as they were previously able to do so.”

Asbestos campaigners welcomed the ruling.

Their lawyers called on the insurance industry to accept defeat and pay up.

Solicitor-advocate Frank Maguire said: “This judgment states categorically that the Scottish Parliament was perfectly within its rights to pass this law and that is tremendous news for pleural plaques sufferers.

“We have almost 1,000 pleural plaques cases which have been in limbo while the insurance industry pursued this ill-fated legal action.

“I now call on them to stop obstructing justice and not to try and put any more barriers in the way of victims seeking compensation.”

Mr Maguire said many insurance companies not involved in the court battle, as well as the Ministry of Defence and British Shipbuilders, had been holding back on settling pleural plaques cases.

“They also should now meet their obligations and pay up,” he said.

“The Westminster Government should now enact similar legislation for the rest of the UK.”

Harold McCluskey, chairman of Clydebank Action On Asbestos, said: “This is great news for the victims of pleural plaques.

“It is absolute rubbish to say that pleural plaques doesn’t affect victims. It’s as dangerous as any other asbestos-related disease.

“Most sufferers have some form of breathlessness but the biggest strain is the worry of developing into fatal conditions like mesothelioma which happens with frightening regularity.”

Former shipyard worker Dan O’Malley, 71, from Paisley, said: “I’m delighted the judge has ruled that the Scottish Parliament was right to pass this law.

“I was diagnosed with pleural plaques after suffering breathlessness and a persistent cough. I had all sorts of x-rays and finally a CT scan before pleural plaques was confirmed.

“Now it preys on my mind all the time especially since a very close friend of mine who had pleural plaques died of mesothelioma last year.”

'Money must come before life' as insurers & lawyers launch legal challenge against Scotland's asbestos compensation law

Law Society 'happy' over challenge against asbestos laws. Scots law firm Brodies LLP, acting for the big insurers, Avira, AXA Insurance, RSA, and Zurich, have launched a legal challenge in the form of a judicial review against The Scottish Government’s Damages (Asbestos-related Conditions) (Scotland) Act, which passed the Scottish Parliament despite Tory opposition in a 98-16 vote and received Royal Assent last Friday.

The legal challenge to Scotland's law making powers, comes amid insurers claims that the new law, which makes it easier for victims of asbestos related illnesses to claim compensation, contravenes the European Convention on Human Rights and insurers' economic rights. However, can an insurer claim their Human Rights are being breached when it might just turn out those same insurers in respect of many other claims, do not respect the Human Rights of claimants or customers.

Simply, what we have here, is big business & corporations claiming their own human rights are being breached because they will have to pay out money to asbestos victims in Scotland, while not having to pay out in England & Wales because the House of Lords ruled in their favour that ‘pleural plaques’ do not qualify for compensation. It was this House of Lords ruling which prompted the Scottish Government to introduce the Damages (Asbestos-related Conditions) (Scotland) Act, arguing pleural plaques were symptomatic of asbestos exposure.

I reported on the earlier threats from the Insurers to take legal action if the Asbestos claims legislation was passed at the Parliament, here : Insurance firms with links to Scottish Government threaten legal challenge against Holyrood on asbestos claims reforms

Insurers challenging asbestos law also insure Alex Salmond’s Scottish Govt. Some of the insurers who are participating in the legal challenge against Holyrood’s law making powers, have links to the SNP minority controlled Scottish Government, as you can see in my earlier report. At least one of the insurers, Royal & Sun Alliance is identified in papers showing insurance deals between, among other insurers, the RSA and Alex Salmond’s administration to provide indemnity insurance cover for quangos created by Ministers and also claims protection for the Government Legal Service for Scotland (GLSS).

The insurers Aviva, AXA Insurance, RSA, and Zurich who launched the legal action at the Court of Session in Edinburgh, have argued that pleural plaques, which the new legislation recognises as a symptom of asbestos related illness, is nothing much to do with victims fatal exposure to the substance, going so far as to put their points on this argument in a rather unconvincing manner at the Scottish Parliament, which you can watch here :

Dr Pamela Abernethy of Edinburgh legal firm Simpson & Marwick argued at Holyrood, pleural plaques ‘were good for you’

You can read more about how the insurers & Simpson & Marwick argued against the passage of the asbestos claims legislation at the Scottish Parliament here : Insurance lawyers argue against laws to help asbestos victims asserting part of their suffering 'is a good thing'

Law Society threatened legal challenge against parliament in 2006. The last time the Scottish Parliament's law making powers were threatened on such high profile legislation occurred in 2006, when the Law Society of Scotland's then Chief Executive, Douglas Mill unbelievably claimed that new legislation in the form of the Legal Profession & Legal Aid (Scotland) Act 2007, created to independently regulate Scotland's 10,000 solicitors contravened a lawyers human right to regulate complaints against themselves.

Despite bringing forward an English QC to claim a human rights breach under ECHR, the Law Society's legal challenge never proceeded, however, lawyers did have their way, and the LPLA Act was heavily compromised through amendments insisted by the Law Society of Scotland, with the help of certain politicians within Holyrood known to be sympathisers of, and some suspect financial beneficiaries of the legal profession.

This time around, the insurers have support from the Scottish Conservative Party, who among their ranks, Bill Aitken MSP, Chairman of Holyrood's solitary Justice Committee after Mr Salmond scrapped the second Justice Committee, fearing opposition control. Mr Aitken apparently believes the asbestos claims law which will force insurers to pay out over pleural plaques, is ill conceived. Mr Aitken of course, has a long background in the insurance industry, as his Scottish Parliament profile reveals.

Incidentally you can read more about other things the Royal Sun Alliance get up to HERE.

MacAskill claims he will defend his asbestos claims law against his own colleagues action. The Scottish Government, no doubt in the form of Justice Secretary Kenny MacAskill claimed today that they will ‘defend the action vigorously’, but what a slap in the face to the SNP it will be if the Court of Session do give the insurers their wishes. To make matters worse for Mr MacAskill, a legal insider indicated tonight, the Law Society of Scotland were apparently “happy” over the legal challenge against the asbestos claims legislation, one senior official stating “Its about time Holyrood got it in the neck” … indeed, but many of us might just be wondering isn’t it about time the Law Society got it in the neck ?

At the end of the day it comes down to the attitude we are used to seeing in the professions, be it banks, lawyers, or insurers, that money comes before lives, and there are plenty of Scottish legal firms happy to indulge big business and the insurers in that argument, giving a very potent signal to the public that access to justice is only obtainable through corporate wealth, or corporate agreement, and woe betide anyone who is too poor, or requires the use legal aid to secure a smidgeon of court time to pursue life threatening medical conditions which the insurers want killed off .. along with their victims to avoid making any compensation payments.

Money before life in Scotland today … and all because lawyers and their insurer supporters say so. How does that make you feel ?

The Herald reports :

Insurance giants to challenge asbestos claim ruling in court

BRIAN CURRIE April 22 2009

Britain's biggest insurance firms have lodged a legal challenge against a new law which allows Scots workers suffering from exposure to asbestos to sue for compensation.

Aviva, AXA Insurance, RSA, and Zurich have lodged an action for a judicial review at the Court of Session in Edinburgh of the Damages (Asbestos-related Conditions) (Scotland) Act which received Royal Assent only last Friday.

The act allows claims for compensation for people affected by pleural plaques. The insurers insist clinical evidence shows plaques are symptomless, do not impact on health or lead to asbestos-related diseases and the legislation overturns a House of Lords decision made in a case two years ago.

They claim the act ignores "overwhelming" medical evidence that plaques do not cause asbestos-related conditions such as mesothelioma, overturns a fundamental UK legal principle that compensation is payable only where physical harm has been suffered through negligent exposure to a risk and fails to fully assess the financial impact on Scottish firms.

Nick Starling, of the Association of British Insurers, said the action had not been taken lightly and claimed the legislation was "ill conceived" and ignored the fundamental legal principle of negligence and clear medical evidence.

A government spokesman said it would "vigorously defend" the challenge.

He said: "We are disappointed that this action to seek effectively to overturn the will of the Scottish Parliament has been taken.

"The insurance companies' action may delay, but will not ultimately defeat, our resolve to defend the rights of people who have been negligently exposed to asbestos by their clients. We firmly believe that our legislation is right in principle and right in law."

Insurance firms with links to Scottish Government threaten legal challenge against Holyrood on asbestos claims reforms

Dean of Faculty Richard Keen QC to fight asbestos claims law. Insurance firms and lawyers who have strong financial relationships with the Government and the Scottish Parliament, have teamed up in an attempt to defeat through the courts, the Damages (Asbestos-Related Conditions) (Scotland) Bill, expected to be passed this week at Holyrood, which will allow victims of asbestos related illnesses to claim compensation from insurers for suffering such conditions as lung scars, which are an indication of exposure to asbestos.

The Edinburgh legal firm of Brodies has been called in by several insurance companies, identified in the Sunday Herald newspaper as AXA, Norwich Union, RSA and Zurich, to mount a judicial review legal challenge to the Damages (Asbestos-Related Conditions) (Scotland) Bill, which goes through Parliament this week. The insurers legal position is that the legislation proposed will allow people to claim compensation who suffer from ailments associated with asbestos exposure, which the insurers currently don't classify as harmful.

Richard Keen as you all know, appeared in the media only a few weeks ago demanding that class actions be allowed in Scotland against banks, however I take it that class actions for the victims of asbestos claims are not included in his thinking at the time.

I wrote a previous article on the Parliamentary hearings, which saw lawyers representing the legal profession attempt to argue that ‘pleural plaques’, a condition which indicates exposure to asbestos, was “good for you”, here : Insurance lawyers argue against laws to help asbestos victims asserting part of their suffering 'is a good thing'

Law Society’s insurers threaten Parliament. It is of note that two of those Insurers - Royal Sun Alliance (RSA) and Norwich Union are backers of the Law Society of Scotland's infamously corrupt Master Insurance Policy, which insures every member of the Scots legal profession including the dean of faculty himself, all other advocates, and even the legal firm of Brodies, who themselves have been caught up in claims made by clients against their negligence cover.

You can read more about the Law Society’s Master Insurance Policy here : The Master Insurance Policy, Marsh UK & corrupt practices by insurers of the Scots legal profession

A legal insider who was approached for comment said "It is true that all advocates are part of the Master Policy, although it is generally left to individual advocates to arrange their own Indemnity Insurance cover, albeit through the same firm. It is fair to say the dean of faculty is probably insured by the same insurers now challenging the asbestos claims legislation".

On being asked for his thoughts on revelations the same insurers deal with Government, he said : "It is my understanding that Marsh also arrange insurance cover for many public institutions, including Government. This insurance cover will also be underwritten by many of the same insurance firms who are affected in the asbestos damages bill now before Holyrood."

Scots Govt pays millions to insurers now threatening legal action. The Master Policy, run by Marsh UK, a subsidiary of the US Insurance giant Marsh, which itself has been caught up in insurance fixing scandals, amazingly shares among its clients, the current SNP controlled Scottish Government, which pays out millions of pounds of public money in Professional Indemnity Insurance cover for all Government Departments, many public bodies & quangos, and also the Justice Department's 'goliath' Government Legal Service for Scotland, staffed by 175 seriously well paid lawyers who under Justice Secretary Kenny MacAskill, also get their huge insurance subscriptions paid as expenses perks by the taxpayer.

You can read more about the Government Legal Service for Scotland (GLSS) and exactly what contribution they make to us here : Scottish Government's £10m in-house lawyers make their mark against legal reforms & public access to justice

Scottish Parliament also has links to insurers. Even the Scottish Parliament itself is not immune from associations with the insurers who are now challenging the legislation to help asbestos victims. The 13 lawyers assigned to the Scottish Parliament from the GLSS are also themselves insured by the same insurers who are threatening legal action against Holyrood, and several departments of the Scottish Parliament also allegedly rely on insurance services provided by Marsh UK and the RSA for their own indemnity insurance !

An official from a consumer organisation today who declined to be named said : "One could speculate a great deal on whether such involvement at all levels of government by a single insurance firm, or cartel of insurers, may give rise to the conclusion by some there is an inherent conflict of interest going on, which may lead to ineffective or badly worded legislation being passed, or a general lack of will on the part of politicians to do the right thing for consumers, on the basis they don't want to upset their services provided by the Insurance community."

So, we have a situation where the same insurers who are now threatening legal action against Parliament to prevent asbestos sufferers receiving compensation, are at the same time, receiving millions of pounds in taxpayers money from Government, the Parliament, and many public authorities in Scotland, to ensure protection against financial claims for wrongdoing or negligence in public office. Is that right ? Is this an acceptable state of affairs ?

Is it ethical to pay millions of pounds of taxpayers money to the same insurers who are fighting proposals of reforms in the legislative process which are designed to make life better for those who are suffering fatal illness ?

Let us remind ourselves of the arguments put forward by the insurance companies lawyers in Parliament against asbestos sufferers :

Scots lawyers argue ‘asbestos related illnesses are good for you’ :

From the Sunday Herald :

Insurance giants to challenge new asbestos legislation

Firms will fight move to allow Scottish workers to claim £50m in damages

By Tom Gordon, Scottish Political Editor

BRITAIN'S BIGGEST insurers are planning an unprecedented legal challenge to a new law which would allow Scots workers to sue for asbestos exposure.

Four firms are preparing to seek a judicial review of the legislation, which is expected to pass its final stage at Holyrood on Wednesday with over-whelming cross-party support.

The law is designed to give workers the right to seek compensation for scars on the lung known as pleural plaques, which indicate exposure to asbestos, but which are themselves harmless.

It is understood the Edinburgh law firm Brodies is co-ordinating the judicial review on behalf of AXA, Norwich Union, RSA and Zurich.

The lawyers have already engaged two of Scotland's most formidable advocates to attempt to overturn the law at the Court of Session. Leading will be Richard Keen QC, dean of the Faculty of Advocates, and he will be assisted by Jane Munro.

If successful, the challenge would humiliate the government and dash the hopes of thousands of people negligently exposed to asbestos.

While the average payout would be around £8000 per person, legal costs would be twice as much again, and ministers estimate the total cost to private companies will top £50 million.

Frank Maguire of Thompsons Solicitors, which represents many Scots asbestos victims, said the court would be loath to reverse the will of parliament, especially as it was a clarification of the existing law.

He said: "We have researched all the angles and we are pretty confident that this will be overcome. We believe this judicial review will be defeated."

A spokesman for justice secretary Kenny MacAskill said: "We are entirely confident that this bill is within the legislative powers of the Scottish parliament. There is a moral imperative here that the SNP government in Scotland is acting on, even if Westminster is not. The House of Lords judgment means that people diagnosed with pleural plaques would have to live with the worry of possible future ill health for the rest of their lives, with no recourse to claim damages."

The judicial review will not surprise the Scottish government. During a consultation last year, insurance firms warned the proposed legislation was "wholly wrong", would open the flood-gates to similar dubious damage claims, and ought to be dropped. Some warned of potential legal challenges.

One of the main complaints against the legislation was that it would allow people to sue for a condition that causes them no physical harm: pleural plaques are symptomless, and do not develop into fatal mesothelioma. Allowing people to claim damages for something that hasn't damaged them is perverse and up-ends centuries of case law, critics argued.

But advocates of compensation said people who discover they have plaques suffer psychological stress.

In October 2007, after more than 20 years of people being able to claim compensation for plaques, the House of Lords ruled plaques were too trivial to merit damages. The Westminster government has so far accepted the ruling, but in Scotland asbestos victims persuaded the Scottish government to legislate to restore the "status quo ante", and let workers pursue damages for the condition once more. Wednesday's third-stage vote will see the culmination of that two-year campaign.

Last week, ministers were forced to issue a revised financial memorandum to the Damages (Asbestos-Related Conditions) (Scotland) Bill, after realising it had underestimated the likely cost of compensation.

Settling the backlog against private firms is expected to cost £11.8m to £20m, followed by annual costs of £3.7m-£7m.

Councils also face bills of around £850,000 to settle existing cases, and annual bills of around £500,000.

The Ministry of Defence, which runs the Rosyth Naval Dockyard, and the UK Department for Business, which inherited liability for defunct shipyards, face total costs of around £7m, a bill the UK government could choose to hand back to Edinburgh.

Christine O'Neill, of Brodies, added: "We have been instructed by a number of insurers to look at a challenge."