The special features of mesothelioma (its
"indivisible" nature and its long latency) have thrown up
many complex legal questions resulting in the creation of special
mesothelioma jurisprudence and legislation governing the
liabilities arising from the disease and how insurance should
respond. Those developments have taken nearly 20 years, but the
courts have not (yet) directly addressed how mesothelioma claims
should be allocated to reinsurance programmes. None of the
decisions in the "Fairchild enclave" directly
addresses reinsurance.
From about 1984, an ACOD B clause was inserted in many, perhaps
most, relevant London market excess of loss reinsurance contracts.
The clause sets out an allocation methodology for claims arising
from "occupational disease or physical impairment which does
not arise from a sudden and identifiable occurrence", where
the employer's liability to the victim is "established on
an exposure basis". Mesothelioma, along with many
