Michael Keegan v Independent Insurance Company Limited & Anor

For the purposes of the Third Party (Rights Against Insurers) Act 2010, the Act applies only where the insured’s liability was incurred after its commencement date. In a mesothelioma claim, that depends on when the claimant sustained actionable damage and the cause of action became complete. Exposure, undetectable cellular change and the risk of future disease do not themselves establish actionable damage. The disease must have manifested sufficiently for the claimant to be appreciably worse off and for damages properly to be awarded. Asymptomatic radiological change may potentially suffice, even if it was unknown at the time. On the unchallenged evidence, actionable damage arose after 1 August 2016, so the direct claim against the insurer was permitted.

The claimant brought a personal injury claim for mesothelioma caused by occupational asbestos exposure. His former employer had been dissolved, and he proceeded directly against its employers’ liability insurers under the Third Party (Rights Against Insurers) Act 2010. The claim against the second insurer settled before trial. The first insurer, which was in liquidation, did not participate.

The issues were whether the claim had been properly brought and served, whether the 2010 Act applied, and whether the claimant had proved the employer’s liability and damages. The central question was whether the claimant sustained actionable damage before 1 August 2016.

1. Disposition. Judgment was entered for the claimant against the first defendant, with a declaration that the former employer was liable for the mesothelioma. Damages were awarded in the sum claimed, £854,076.23, subject to deductions for recoverable benefits.
2. The Third Party (Rights Against Insurers) Act 2010 does not operate retrospectively. It applies only where liability was incurred after 1 August 2016. The relevant question was when the claimant’s cause of action became complete, which required identification of the time at which actionable damage was sustained.
3. Actionable damage requires more than exposure to asbestos, a risk of future mesothelioma or undetectable cellular changes. The claimant must be appreciably worse off physically or economically, and the condition must have reached a stage at which damages could properly be awarded. The court applied the principles in Cartledge v E Jopling & Sons Ltd and Rothwell v Chemical & Insulating Co Ltd, as considered in Dryden v Johnson Matthey PLC.
4. The trigger litigation concerning insurance policy wording was materially different. It addressed when mesothelioma was sustained or contracted for policy purposes, not when a claimant’s cause of action accrued. Looking backwards from a diagnosis to the initiation of disease was therefore not an appropriate method for identifying actionable damage.
5. On the evidence, the first manifestation of mesothelioma was a tiny pleural effusion visible in October 2020, with symptoms developing in January 2021. The judge considered the choice between those dates difficult and finely balanced, but it was unnecessary to decide it because either date was after the commencement of the 2010 Act. The claimant had proved accrual of damage around the end of 2020 or early 2021, and no contrary case was advanced.
6. Service at the first defendant’s registered office was valid under CPR 6.3(2)(b) and section 1139(1) of the Companies Act 2006. The unchallenged evidence established the employer’s liability and supported the damages claimed. The claimant had to give credit for the settlement received from the second defendant to prevent double recovery.

First-instance judgment. The judgment does not state any prior appellate decision in this litigation.