The UK Supreme Court has today ruled unanimously that the Scottish Parliament acted within the scope of its powers when it enacted the Damages (Asbestos-related Conditions) (Scotland) Act 2009, which gives individuals diagnosed with pleural plaques a right to compensation.

Four UK insurers challenged the lawfulness of the Act on the grounds that it infringed the insurers’ ECHR property rights as it deprives them of capital resources running into millions, if not billions of pounds and that the Act therefore constituted unreasonable parliamentary interference.

The Supreme Court held that the Act was ECHR compliant and that it would be wrong for judges to substitute their own views as to what is rational or reasonable for the “considered judgement of the democratically elected legislature”.

The effect of the Supreme Court’s judgment is that the Act will continue to apply retrospectively to those with pleural plaques and other similar asbestos-related conditions who can make compensation claims at the expense of insurers and self-insured employers north of the border.  Irrespective of whether the four UK insurers appeal to the European Court of Human Rights, it is understood that claimants’ solicitors intend to proceed with all such claims.

It is thought unlikely that the UK Government will enact similar legislation in England and Wales to reconcile the conflicting positions north and south of the border. It is inevitable that there will be an element of forum shopping where English claimants with both Scottish and English exposure will raise proceedings in Scotland.

Links to the full judgment and legislation can be found at:
http://www.supremecourt.gov.uk/docs/UKSC_2011_0108_Judgment.pdf
http://www.legislation.gov.uk/asp/2009/4/pdfs/asp_20090004_en.pdf

For further information please contact Andrew Lothian or Douglas Keir or your usual contact at Anderson Strathern.