The Insurance Law Legacy of Fairchild
James Goudkamp, 'The Insurance Law Legacy of Fairchild' (2015) Lloyd's Maritime and Commercial Law Quarterly pp.443–450.
9 Pages Posted: 26 Feb 2016
Date Written: 2015
To say that the landmark decision of the House of Lords in Fairchild v Glenhaven Funeral Services Ltd has presented problems that were unanticipated by its architects would be a significant understatement. Fairchild established, of course, that it was unnecessary for a claimant who had suffered indivisible damage on account of his being tortiously exposed to asbestos by several defendants to demonstrate that any one defendant was a but-for cause of the damage in order to recover compensation. It was sufficient for the claimant to establish that a given defendant had increased materially the risk of damage. Fairchild was, on any measure, a revolution in private law. It laid down an important exception to orthodox principles. The ultimate appellate court has been called on several times to address questions presented by Fairchild. This note is concerned with the latest installment in this saga: International Energy Group Ltd v Zurich Insurance Plc UK Branch. This important decision lays down significant rules regarding the liability of insurers of Fairchild defendants. Its financial impact will be enormous. It further increases the responsibility of insurers for tortiously caused asbestos-related diseases (such responsibility has, of course, already been vastly expanded beyond what insurers could have predicted at the time that they accepted premiums). It also raises fascinating questions about judicial methodology and the proper development of the common law. It is necessary to observe at the outset that the reasons delivered in Zurich are extraordinarily prolix. The judgment runs to a staggering 95 pages (comprising 211 paragraphs). Consequently, it has been necessary in this note to be selective in choosing aspects of the case on which to focus.
Keywords: tort, negligence, causal uncertainty, reinsurance, insurance
JEL Classification: K13
Suggested Citation: Suggested Citation