14 October 2011

The Supreme Court has issued its judgement in the appeal of the Judicial Review of the determination of the Damages (Asbestos-related Conditions) (Scotland) Act 2009.

You will recall that the insurers brought the petition for Judicial Review seeking a declarator that the 2009 Act was unlawful and seeking its reduction.  The insurers had been unsuccessful at Judicial Review and before the Inner House of the Court of Session.

The appeal to the Supreme Court was also unsuccessful. The insurers’ appeal was refused unanimously by the Supreme Court.  Whilst the Supreme Court upheld the Inner House's decision that the insurers have standing (victim status) to challenge the Act of the Scottish Parliament, and that Acts of the Scottish Parliament can be legally challenged on common law grounds, they failed in their argument that the 2009 Act was irrational at common law.

The Court indicated that when considering issues, involving social policy, such as this, the Court should respect the judgement of the elected body as to what is in the public interest unless that judgement is manifestly without reasonable foundation.  The Court held that it could not be said that the judgement of the Scottish Parliament was without reasonable foundation.  The Court accepted that the Act pursued a legitimate aim and that it was reasonably proportionate to the aim being realised.

The Court considered that the balance was correctly struck, because :

• claims under the Act will only succeed if the asbestos exposure was caused by the employer’s negligence
• the insurers’ obligation to indemnify inevitably entailed a risk that unforeseen circumstances would increase the burden of liability, and
• the Act can be seen as preserving the status quo prior to the Rothwell judgement

The Court considered that it therefore followed that the 2009 Act was not outside the legislative competence of the Scottish Parliament, nor could it be said that the 2009 Act was a result of unreasonable, irrational and arbitrary exercise of the legislative authority.