Success for Shaheen Mosquera of Fieldfisher and John-Paul Swoboda of 12 King’s Bench Walk in Keegan v (1) Independent Insurance Company Ltd v (2) Zurich Insurance Plc

On 27 July 2022 Mrs Justice Yip DBE handed down judgment deciding that the Third Parties (Rights against Insurers) Act 2010 applied to this living mesothelioma claim because Mr Keegan’s cause of action was not complete until after 1 August 2016, the date the 2010 Act came into force. As Yip J stated, “Without the benefit of hindsight it cannot be said that the claimant has suffered injury or disease until the mesothelioma has developed.  …  It is only when the mesothelioma manifests itself by radiological changes and/or symptoms that actionable damage occurs. …”.

Mr Keegan was exposed to asbestos whilst working for his employer Jas. C. Flaxman & Sons Ltd at various Marks & Spencer stores between 1972 and at least 1984. He began to suffer with symptoms of mesothelioma in about Jan 2021. He, on the basis of advice from his treating oncologist, wished to undergo dual agent immunotherapy which is an expensive treatment (and incidentally has very recently been approved by NICE as a treatment for mesothelioma). He paid for the treatment privately diminishing his life’s savings, but he needed a quick resolution to the claim to ensure sufficient funding for ongoing treatment.

Because of the urgency of the situation, there was no time to restore his former employer (no longer registered as a company), a process which usually takes about 6 months. To avoid this delay, he sued the insurers (IICL and Zurich) of Jas. C. Flaxman & Sons Ltd directly relying on the 2010 Act.

Very shortly prior to trial settlement was reached with Zurich for £650,000 plus an indemnity for future treatment costs. But that left about a £200,000 shortfall on the full claim. Even though IICL was itself insolvent there is a statutory scheme whereby the Financial Services Compensation Scheme (FSCS) step into the shoes of insolvent insurers[1]. As there remains a paymaster for the claim against IICL the claim went to trial on 19 July 2022 for the £200,000 shortfall in damages. To the best of our knowledge, this was the first time the application of the 2010 Act has been considered in the context of a mesothelioma claim and is therefore an important decision.  It provides greater clarity regarding the interpretation and applicability of the 2010 Act and going forward it gives greater confidence when issuing against EL insurers rather than going through the lengthy process of restoring companies to the register.

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[1] There remains a dispute between the Claimant and the FSCS as to the liability of the FSCS and the FSCS played no part in the proceedings meaning IICL were unrepresented.