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An English and Scottish conflict

  • Legal Development 25 October 2021 25 October 2021
  • UK & Europe

  • Insurance & Reinsurance

The impact of untraced insurers on the exercise of discretion in respect of limitation.

The Scottish case 

In the Scottish case, the time-barred claim was not allowed to proceed.

The relevant timeline in this case, Madden v Duncan Anderson Ltd, Sheriff Mundy, ASPIC, 23 September 2021 was:

  • March 2007: The pursuer was diagnosed with pleural plaques. He consulted solicitors with a view to making claims against the two employers with whom he had been exposed to asbestos, Hart Builders (Edinburgh) Ltd (“Hart”) and Duncan Anderson Ltd (“Anderson”). Unlike in England & Wales, pleural plaques are compensable in Scotland because the Scottish Parliament legislated away the effect of the decision in Rothwell v Chemical Insulating Co Ltd [2008] 1 AC 281 that pleural plaques did not amount to actionable harm.

  • February 2010: Proceedings were raised against Hart, whose employers’ liability insurers were known to the pursuer’s solicitors, but not against Anderson, whose employers’ liability insurers were not known to the pursuer’s solicitors. Proceedings could, nonetheless, have been issued against Anderson because, although this company was in voluntary liquidation, it had not yet been struck off the Register of Companies. 

  • April 2017: The claim against Hart was settled on a full and final basis at £8,250, with a 25% deduction from the agreed full value of the claim for the exposure with Anderson on the basis of Holtby v Brigham and Cowan (Hull) Ltd [2000] 3 All ER 421. There was no evidence led regarding the basis for the full and final settlement having been chosen rather than a provisional damages settlement.  

  • September 2019: The pursuer was diagnosed with pleural thickening. 

  • Between September 2019 and end 2019: The pursuer consulted new solicitors. He could not pursue Hart because his previous claim against them was settled on a full and final, not a provisional, basis. The new solicitors found insurers for Anderson after checking with the Employers Liability Tracing Office (“ELTO”) which had been set up in 2011. 

  • June 2020: The new solicitors achieved restoration of Anderson to the Register of Companies, from which it had been struck off in January 2014, and then raised the action, seeking compensation for both pleural plaques and pleural thickening, against them. 

Sheriff Mundy heard evidence from a solicitor from the pursuer’s original solicitors, albeit not the person who had acted in the matter. Her position that her firm’s conduct in the first action was appropriate was accepted by the sheriff because there was no evidence before the court that it was inappropriate. Nonetheless, focusing on the "deliberate, reasoned and rational decision" not to pursue Anderson when insurance was not identified, the sheriff held that it would not be equitable to allow the action to continue.

The English case

In the English case, the time-barred claim was allowed to proceed.

In this case, Gregory v H J Haynes Ltd, Mr Justice Mann, 22 January 2020, the plaintiff had developed pleural thickening and was at risk of mesothelioma and asbestosis. The claimant’s diagnosis was in 2008 but the dissolved defendant’s relevant employers’ liability insurers were not identified between 2008 and 2014.  The judge considered that the plaintiff should not be criticised for the period of inactivity because, despite knowing he might have a claim, he "could do nothing about it for want of a defendant or identifiable insurers."  He was said to be "not to blame for not starting a claim in this period."  The claim was litigated in 2017. 


There are certain distinctions between the Scottish and English cases:  

  1. the defendant in Madden was in voluntary liquidation at the time when the first claim was made, whilst in Gregory it had, by the equivalent time, already been struck off the Register of Companies.

  2. there was a claim that was pursued against another defendant in Madden, but not in Gregory.

  3. in Gregory, the insurers were discovered by chance in 2014, whilst in Madden, they were discovered on the back of an ELTO search carried out by the pursuer's new solicitors instructed in 2019 following Mr Madden developing pleural thickening.

  4. the legal principles applicable to the exercise of discretion in allowing time-barred claims to proceed differ slightly between the two jurisdictions.

Nevertheless, it is not considered that these distinctions are behind the different results. The crucial distinction seems to be that Mann J. categorised the 2008 to 2014 period when insurers were not identified as a period over which neither Mr Gregory nor his solicitors had any control, whereas the emphasis in Madden was, as already mentioned, on the pursuer's "deliberate, reasoned and rational decision" not to pursue Anderson when insurance was not identified.

Whilst it might seem harsh on a claimant, who could be put to the expense of pursuing an insolvent defender without the prospect of recovering any damages, it is contended that the conclusion of the sheriff in the Scottish case ought to be preferred. If, for instance, an insurer had disposed of relevant papers during a period of a claimant's delay, this would be unlikely to be factored in for these purposes as it would be prejudice to the insurer rather than the defender or defendant itself. It is therefore submitted that it is wrong for the insurance situation to be taken into account for these purposes in favour of the claimant.

*This content was written by BLM prior to its merger with Clyde & Co*


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