New Judgment: Zurich Insurance plc UK Branch v International Energy Group Ltd  UKSC 33
20 Wednesday May 2015
On appeal from:  EWCA Civ 39
The Supreme Court unanimously allowed the appeal in respect of compensation following the common law rule of proportionate recovery established in Baker  UKHL 20 which still applies in Guernsey, but dismissed the appeal to defence costs.
The respondent had been sued by a previous employer for negligent and continuous exposure to asbestos dust that resulted in him contracting mesothelioma, from which he later died. The appellant was a successor to one of the respondent’s liability insurers during the period from 1982 to 1988, but maintained that it was only liable to meet 22.08% of the respondent’s loss and defence costs because it only insured the company for 6 out of their 27 years. The Court of Appeal ordered the appellant to pay 100% of both the compensation and defence costs.
The Supreme Court held that as the common law rule in Barker remained unaltered in Guernsey where the Compensation Act 2006 does not apply, only 22.08% of respondent’s loss is thus attributable to the period of the Midland insurance for which the appellant must answer. It stated however that the defence costs are different as they were incurred in defending the claim which had the insurer’s consent. The Court highlighted the rule in Fairchild that stated mesothelioma is “caused” in any period in which exposure to asbestos occurs which materially contributed to the risk of contracting the disease.