Firms will fight move to allow Scottish workers to claim £50m in damages
By Tom Gordon, Scottish Political Editor

BRITAIN'S biggest insurers are planning an unprecedented legal challenge to a new law which would allow Scots workers to sue for asbestos exposure.

Four firms are preparing to seek a judicial review of the legislation, which is expected to pass its final stage at Holyrood on Wednesday with over-whelming cross-party support.

The law is designed to give workers the right to seek compensation for scars on the lung known as pleural plaques, which indicate exposure to asbestos, but which are themselves harmless.

It is understood the Edinburgh law firm Brodies is co-ordinating the judicial review on behalf of AXA, Norwich Union, RSA and Zurich.

The lawyers have already engaged two of Scotland's most formidable advocates to attempt to overturn the law at the Court of Session. Leading will be Richard Keen QC, dean of the Faculty of Advocates, and he will be assisted by Jane Munro.

If successful, the challenge would humiliate the government and dash the hopes of thousands of people negligently exposed to asbestos.

While the average payout would be around £8000 per person, legal costs would be twice as much again, and ministers estimate the total cost to private companies will top £50 million.

Frank Maguire of Thompsons Solicitors, which represents many Scots asbestos victims, said the court would be loath to reverse the will of parliament, especially as it was a clarification of the existing law.

He said: "We have researched all the angles and we are pretty confident that this will be overcome. We believe this judicial review will be defeated."

A spokesman for justice secretary Kenny MacAskill said: "We are entirely confident that this bill is within the legislative powers of the Scottish parliament. There is a moral imperative here that the SNP government in Scotland is acting on, even if Westminster is not. The House of Lords judgment means that people diagnosed with pleural plaques would have to live with the worry of possible future ill health for the rest of their lives, with no recourse to claim damages."

The judicial review will not surprise the Scottish government. During a consultation last year, insurance firms warned the proposed legislation was "wholly wrong", would open the flood-gates to similar dubious damage claims, and ought to be dropped. Some warned of potential legal challenges.

One of the main complaints against the legislation was that it would allow people to sue for a condition that causes them no physical harm: pleural plaques are symptomless, and do not develop into fatal mesothelioma. Allowing people to claim damages for something that hasn't damaged them is perverse and up-ends centuries of case law, critics argued.

But advocates of compensation said people who discover they have plaques suffer psychological stress.

In October 2007, after more than 20 years of people being able to claim compensation for plaques, the House of Lords ruled plaques were too trivial to merit damages. The Westminster government has so far accepted the ruling, but in Scotland asbestos victims persuaded the Scottish government to legislate to restore the "status quo ante", and let workers pursue damages for the condition once more. Wednesday's third-stage vote will see the culmination of that two-year campaign.

Last week, ministers were forced to issue a revised financial memorandum to the Damages (Asbestos-Related Conditions) (Scotland) Bill, after realising it had underestimated the likely cost of compensation.

Settling the backlog against private firms is expected to cost £11.8m to £20m, followed by annual costs of £3.7m-£7m.

Councils also face bills of around £850,000 to settle existing cases, and annual bills of around £500,000.

The Ministry of Defence, which runs the Rosyth Naval Dockyard, and the UK Department for Business, which inherited liability for defunct shipyards, face total costs of around £7m, a bill the UK government could choose to hand back to Edinburgh.

Christine O'Neill, of Brodies, added: "We have been instructed by a number of insurers to look at a challenge."