London Insurance Market
House of Lords asbestos decision limits damage liability
The U.K.’s House of Lords handed down judgments on May 3 in three major cases involving employers and their insurers’ liability for damages to workers and their families resulting from asbestos related diseases.
The decision in the case of Barker v. Corus, and two related cases, limited the application of a previous case, Fairchild v. Glenhaven, decided in 2002, which had held that a worker “who had contracted mesothelioma after being exposed to asbestos dust at different times by more than one employer could successfully sue any of them in respect of his entire damage, notwithstanding that he could not prove which employer had actually caused his disease,” in the words of a summary of the decision provided by the law firm of Lawrence Graham LLP.
The Corus decision found differences with the facts in Fairchild. For one, the complaint cited asbestosis, not mesothelioma as the malady in question; for another the plaintiff Barker had also been self-employed for a period of time. The court determined that none of the employers could be held entirely responsible for the full amount of damages. Each past employer was therefore liable to pay damages only in proportion to the time the employee had been exposed to asbestos fibers at each place he worked.
The Lords in effect rejected the notion of strictly applying the rules of joint and several liability in cases where the facts concerning the duration of employment and the amount of exposure to asbestos could be reasonably determined. They therefore sent the case back to the lower courts to make these determinations of fact.
The case is nonetheless seen as victory of sorts for the insurance industry and the remaining industrial concerns that are still solvent. Plaintiffs’ attorneys roundly criticized the result as a miscarriage of justice.
Association gains exclusive license for London market test
The American Association of Managing General Agents announced that it has an exclusive license with the Chartered Insurance Institute to offer the Lloyd’s of London Market Insurance Test. Passing the test is required for all brokers doing business in London.
PXRE edges towards runoff despite $41.6 million Q1 net
Bermuda-based property reinsurer PXRE Group Ltd. announced that its net income before convertible preferred share dividends was $41.6 million for the first quarter of 2006, compared to $22.7 million in the first quarter of 2005.
The positive result, however, doesn’t appear to significantly help the company out of its current financial difficulties. PXRE was severely impacted by last fall’s hurricanes, and as a consequence lost its “A” rating and 65 percent of its business. The company is very close to going into runoff, unless a buyer comes forward with a rescue plan.
“We are continuing to actively explore potential strategic alternatives,” said President and CEO Jeffrey L. Radke. “To date, our Board of Directors has not found an alternative that it believes would be in the best interests of our shareholders and reinsurance clients, but we are continuing the process.”
Radke recognized that the first quarter results weren’t sufficient to rescue PXRE. He indicated that although they were encouraging, “we do not expect to repeat this level of profitability in future quarters.”