In R (Aviva and Swiss Re) v Secretary of State for Work and Pensions, the Court of Appeal, allowing an appeal against orders of the Administrative Court, held that the Social Security (Recovery of Benefits) Act 1997 does not violate insurers’ rights under Article 1, Protocol 1 of the European Convention on Human Rights. The 1997 Act obliges employers’ liability insurers to make payments to the State recovering benefits in circumstances where an insured employer incurs any liability, in any amount, to a victim of a workplace accident or injury. The insurers argued that the imposition of full statutory liabilities arising from asbestosis and mesothelioma “long tail” books, following common law and statutory developments in the law of tort after Fairchild, was contrary to A1P1 and unlawful, giving rise to a restitutionary liability to repay insurers dating back to the commencement date of the Human Rights Act 1998.
The Court of Appeal concluded that the legislation strikes a fair balance between the interests of victims, tortfeasors, insurers and taxpayers and is accordingly a proportionate and lawful interference. The judgment sets out the principles applicable to property deprivation claims against the State in the field of social policy, economic and fiscal legislation.