Supreme Court upholds pleural plaques legislation

The UK Supreme Court has unanimously upheld the validity of the Damages (Asbestos-related Conditions) (Scotland) Act 2009 against the challenge to it made by insurance companies.  The judgments are very important discussions, not only about the Scottish Parliament's legislative competence but also about its subjection to judicial review.

The Court's press release reads as follows (references in square brackets are to paragraphs in the judgment; the Rothwell case is Rothwell v Chemical & Insulating Co Ltd [2007] UKHL 29, the decision that pleural plaques did not constitute an actionable harm which the 2009 Act seeks to reverse):

The Supreme Court dismisses the appeal and allows the cross-appeal by the third to tenth respondents. The leading judgments were given by Lord Hope and Lord Reed, with whom the other justices agreed.

The Court holds that the appellants are entitled to bring these proceedings under the Convention as the effect of the 2009 Act is that they would be victims for the purposes of article 34 and that the amount of money the appellants would be required to pay is a possession for the purposes of Article 1 Protocol 1 of the ECHR [28], [112-114]. Therefore in order for the 2009 Act to comply with Article 1 Protocol 1, it must be shown that the Act is pursuing a legitimate aim and is reasonably proportionate to the aim pursued.  In issues involving questions of social policy, which this is, the Court should respect the judgment of the elected body as to what is in the public interest unless that judgement is manifestly without reasonable foundation [31] – [32]. It cannot be said that the judgement of the Scottish Parliament was without reasonable foundation [33], [125]. Therefore the Court accepts that the Act pursues a legitimate aim [41], [125]. It also considers that the means chosen are reasonably proportionate to the aim sought to be realised [41], [134]. The balance is correctly struck, first because the claims will only succeed if the asbestos exposure was caused by the employer’s negligence [37]. Second, the appellants’ obligation to indemnify inevitably entailed a risk that unforeseen circumstances would increase the burden of liability [38]. And third, because the Act can be seen as preserving the status quo prior to Rothwell [129]. It follows that the 2009 Act was not outside the legislative competence of the Scottish Parliament.

Nor can it be said that the 2009 Act was a result of an unreasonable, irrational and arbitrary exercise of the legislative authority [42]. The Court finds that in principle Acts of the Scottish Parliament are subject to judicial review but not on the grounds of irrationality, unreasonableness or arbitrariness.  The guiding principle is to be found in the rule of law. This is the ultimate controlling factor, and the courts must insist that it is respected by legislation that the Parliament enacts. But it would be wrong for the judges to substitute their views as to what is rational or reasonable for the considered judgment of the democratically elected legislature [47], [51] – [52], [148] and [153].

As to whether the third to tenth respondents are entitled to be parties, the test of “standing”, rather than the private law rule that title and interest has to be shown, is a more appropriate approach in judicial review proceedings [62], [171]. The third to tenth respondents have standing as they are “directly affected” by the appellants’ challenge to the 2009 Act [63] – [64] and [175].