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2012-05-01

Document Cited authorities 12 Cited in Related
Vincent
AuthorAileen McHarg,Elspeth Reid,Fiona Leverick,Francis Lyall,Martin Hogg,Paul Reid,Stephen Bogle,Greg Gordon
Date01 May 2012
DOI10.3366/elr.2012.0105
Pages224-260
Published date01 May 2012
<p>In <italic>Axa General Insurance Ltd and others v Lord Advocate and others</italic>,<xref ref-type="fn" rid="fn1-1"><sup>1</sup></xref><fn id="fn1-1"><label>1</label><p><a href="https://vlex.co.uk/vid/axa-general-v-u-818718353">[2011] UKSC 46</a>, <a href="https://vlex.co.uk/vid/axa-general-v-u-818718353">2011 SLT 1061</a>.</p></fn> seven Supreme Court justices unanimously rejected a challenge by four insurance companies to the validity of the <a href="https://vlex.co.uk/vid/damages-asbestos-related-conditions-808336821">Damages (Asbestos-Related Conditions) (Scotland) Act 2009</a>, an Act of the Scottish Parliament (“ASP”) which confers a right of action in damages for asymptomatic pleural plaques and other asbestos-related conditions. The Act reversed (retrospectively as well as prospectively) in Scots Law the effect of the House of Lords' decision in <italic>Rothwell v Chemical and Insulating Co Ltd</italic>,<xref ref-type="fn" rid="fn1-2"><sup>2</sup></xref><fn id="fn1-2"><label>2</label><p><a href="https://vlex.co.uk/vid/grieves-v-everard-and-852188186">[2007] UKHL 39</a>, [2008] AC 281.</p></fn> which held that pleural plaques did not constitute an actionable injury.</p> <p>By the time the case reached the Supreme Court, there were two grounds of challenge:<xref ref-type="fn" rid="fn1-3"><sup>3</sup></xref><fn id="fn1-3"><label>3</label><p>A third ground, based on <span class="vid_spn">article 6</span> of the <a href="https://international.vlex.com/vid/convenio-europeo-libertades-fundamentales-67895138">European Convention on Human Rights</a>, was rejected at first instance and not renewed on appeal.</p></fn> first, that the Act breached the insurers' rights under article 1 protocol 1 of the European Convention on Human Rights (“A1P1”) and was therefore outwith the Scottish Parliament's legislative competence;<xref ref-type="fn" rid="fn1-4"><sup>4</sup></xref><fn id="fn1-4"><label>4</label><p><a href="https://vlex.co.uk/vid/scotland-act-1998-808137621">Scotland Act 1998 s 29(2)</a>(d).</p></fn> and, second, that it was irrational at common law. Both grounds had been emphatically rejected by the lower courts,<xref ref-type="fn" rid="fn1-5"><sup>5</sup></xref><fn id="fn1-5"><label>5</label><p><italic>Axa General Insurance Ltd v The Lord Advocate</italic> <a href="https://vlex.co.uk/vid/axa-general-insurance-limited-878395030">[2010] CSOH 2</a>, <a href="https://vlex.co.uk/vid/axa-general-insurance-ltd-805330925">2010 SLT 179</a>; <italic>Axa General Insurance Ltd v The Lord Advocate</italic> <a href="https://vlex.co.uk/vid/axa-general-insurance-company-803807721">[2011] CSIH 31</a>, <a href="https://vlex.co.uk/vid/axa-general-insurance-company-803807721">2011 SC 662</a>.</p></fn> and, in my view, were never likely to be any more successful in the Supreme Court, not least because of its recent difficult relationship with the Scottish Government. Nevertheless, <italic>Axa</italic> must be regarded as the most important Scots public law case of recent years. Not only does it settle the long-running controversy over the status of ASPs and their susceptibility to review at common law, it also effects a long overdue liberalisation of the law of standing. Further, it contains interesting dicta on the justifiability of retrospective interferences with Convention rights, and adds to the growing body of authority on “common law constitutionalism”.</p> THE PROPERTY RIGHTS CHALLENGE

Although the insurers were not directly affected by the 2009 Act, the Supreme Court accepted that there had been an “interference” with their possessions in terms of A1P1, since it was they who would bear most of the costs of meeting successful damages claims. The key issue, then, was whether the interference was justified. In making this assessment, the Strasbourg court accords a wide margin of appreciation to states: legislative judgments about when property rights must yield to the public interest will be respected unless they are “manifestly without reasonable foundation”.6

James v United Kingdom (1986) 8 EHRR 123 at para 46.

On this test, the Supreme Court held that the 2009 Act did constitute a justifiable interference. In correcting what it perceived to be the social injustice caused by Rothwell, the Scottish Parliament was pursuing a legitimate aim; and the impact on the insurers was not disproportionate, notwithstanding that there were other potential ways of addressing that injustice, such as the limited, publicly-funded compensation scheme established in England and Wales

However, the Supreme Court was more troubled by the legislation's retrospective nature than the lower courts had been. Lord Reed's judgment in particular contains a useful survey of the Strasbourg court's treatment of retrospectivity, as regards both the lawfulness and the proportionality of interferences with Convention rights.7

Axa at paras 116–134.

Ultimately, though, the justices regarded the Act as involving only a limited degree of retroactivity, since prior to Rothwell insurers had routinely accepted liability for pleural plaques, and that case itself could conceivably have been decided differently. In effect, the Act was performing a remedial function,...

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