The shock that comes with a diagnosis of an asbestos-related disease means that some patients do not seek expert legal advice regarding pursuing a compensation claim even if those treating them encourage them to do so. They may be reluctant to go down that route and convince themselves that a claim would not be possible in any event, especially if the company by whom they were employed when they were exposed to asbestos dust is no longer trading. This is a common misconception.

Asbestos-related diseases take decades to develop and cause symptoms, and so it is often the case that an employer/company where asbestos exposure occurred is no longer trading. Fortunately, that is not the end of the story as far as a compensation claim is concerned. There are other avenues to explore and, in most cases, compensation in some form can be recovered.

The “indivisible” and “divisible” disease distinction

In the case of a client with mesothelioma, it may be that they were negligently exposed to asbestos dust during more than one employment. As mesothelioma is considered an “indivisible” disease, liability and damages are not apportioned between all those employers. Rather, the client is entitled to recover damages in full against any of them. It may therefore be appropriate to direct the claim against the only company or companies that remain/s solvent where there are others that are insolvent, and employers’ liability insurance cannot be traced for them. Tactical decisions need to made by the solicitor to determine the most appropriate and fastest route to securing compensation.

The insolvent company becomes more of an issue in cases where a client has a “divisible” disease such as diffuse pleural thickening, asbestosis or asbestos-related lung cancer. In those cases, liability and damages are apportioned according to the asbestos dose for which they are responsible. Each company’s asbestos dose is determined by the duration or intensity of the exposure they caused. This means that, where there is an insolvent company and no employers’ liability insurance can be traced for them, the level of compensation is reduced accordingly. It is therefore important to seek to trace the employers’ liability insurer on risk at the time of exposure for all culpable defunct companies.

Tracing employers’ liability insurance

The first port of call in seeking to trace employers’ liability insurance is the Employers Liability Tracing Office (“ELTO”).

ELTO is an online database founded in 2011 by the insurance industry that holds details relating to more than 40 million insurance policies spanning more than a hundred years. An online ELTO search often proves fruitful whether from an immediate “simple” search or an “extended” search, which can take up to five weeks. If no results are returned, then there are forums of asbestos claims lawyers and asbestos support charities with legal panels that also keep insurance records from past claims and who share information for the benefit of those with asbestos-related illnesses.

It is possible to access company records from Companies House to see if they reference any employers’ liability insurance details and to get contact details for former directors and company secretaries. We can then write to them and ask whether they recall or have any documentation to confirm the relevant insurance details. There are even insurance archaeologists who we can instruct to trace historical employers’ liability insurance policies.

Financial Services Compensation Scheme (FSCS)

In some cases, whilst employers’ liability insurance may be traced, it may be that the insurer itself is insolvent meaning that the insurer is also without funds to meet a claim on behalf of the company that it insures. Chester Street Insurance Holdings (formerly Iron Trades Holdings) and Builders Accident Insurance are two such insurers. In this situation the Financial Services Compensation Scheme (“FSCS”) provides a fund of last resort where certain criteria are met.

To benefit from the FSCS, negligent asbestos exposure must be proved against the insured company, as with any civil claim. If exposure occurred before 1st January 1972 (the date when employers’ liability insurance became compulsory) then the FSCS will pay out 90% of any compensation award due. If exposure occurred after 1st January 1972, then the FSCS will pay out 100% of any compensation award. It is worth noting that – in mesothelioma claims - it may be possible to recover 100% even where negligent exposure occurred before 1st January 1972.

In some cases, employers’ liability insurance cannot be traced, and this is more likely where asbestos exposure occurred before 1st January 1972. This is where the government’s Diffuse Mesothelioma Payment Scheme (“DMPS”), a fund of last resort for clients with mesothelioma, steps in. There is more about the DMPS in Helen Childs' article above.

Conclusion

The main takeaway is that even if a company is ‘long gone’ it is often still possible to pursue a legal claim for compensation. As specialist solicitors we are used to dealing with the challenge of tracing companies and their former insurers. In addition, there may be other potential exposures to asbestos in your history that you have not thought about, and therefore other avenues to pursing a claim. It is imperative to take legal advice so all of this can be explored, and you can be advised according to your specific circumstances.