Recovery of Medical Costs of Asbestos Diseases (Wales) Bill: Reference by the Counsel General for Wales and The Association of British Insurers

The Supreme Court has handed down a decision addressing a number of novel and important issues concerning the legislative competence of the National Assembly of Wales and the scope of Article 1 Protocol 1.

The reference, made by the Counsel General for Wales, concerned the Recovery of Medical Costs for Asbestos Diseases (Wales) Bill (“the Bill”), which imposed a liability to pay NHS charges “where a compensation payment is made to or in respect of a person (the ‘victim’) in consequence of any asbestos-related disease suffered by the victim”. The Bill also extended the scope of the compensators’ liability insurance policies to cover the sums which they would be required to pay.

The Supreme Court unanimously held that the Welsh Assembly lacks legislative competence to enact the Bill in its present form. The majority (Lord Mance, with whom Lords Neuberger and Hodge agreed) held that the Bill (a) fell outside the legislative competence of the Welsh Assembly because it did not relate to the “organisation and funding of [the] national health service” under the Government of Wales Act 2006 (§34); and (b) was in any event incompatible with the A1P1 rights of compensators and insurers to the peaceful enjoyment of their possessions (§§65-69). The Court held that the new financial liabilities of compensators and insurers would arise from asbestos exposure and liability insurance policies which long pre-dated the Bill (§§36, 41), and that the retrospective effect of the Bill required special justification which was absent in the present case (§§53, 57, 65-69).

The full judgment can be read here: http://www.bailii.org/uk/cases/UKSC/2015/3.html 

Michael Fordham QC and Jason Pobjoy acted for The Association of British Insurers.