AXA General Insurance Ltd v HM Advocate [2011] UKSC 46, [201...

Facts

• The Damages (Asbestos-related Conditions) (Scotland) Act 2009 enabled compensation claims for individuals diagnosed with pleural plaques caused by asbestos exposure, even where physical symptoms were absent.
• Prior court decisions had established that pleural plaques, without physical symptoms, did not satisfy the requirement for actionable harm in compensation claims under common law.
• The legislation sought to address anxiety experienced by those diagnosed with pleural plaques, which signified past asbestos exposure and potential future health risks.
• Insurance companies, led by AXA General Insurance Ltd, challenged the Act, arguing it unlawfully imposed new financial liabilities and that the Scottish Parliament lacked the authority to modify fundamental common law rules regarding harm and compensation.
• The challenge was brought before the Supreme Court of the United Kingdom to determine the scope of the Scottish Parliament’s legislative competence under the Scotland Act 1998.

Issues

1. Whether the Scottish Parliament had the authority to enact legislation that modified established common law rules relating to actionable harm.
2. Whether the Damages (Asbestos-related Conditions) (Scotland) Act 2009 unlawfully imposed financial liabilities on insurers by departing from common law standards.
3. To what extent devolved legislatures are permitted to alter legal standards to advance policy objectives, within constitutional and statutory limits.

Decision

• The Supreme Court held that the Damages (Asbestos-related Conditions) (Scotland) Act 2009 was within the legislative competence of the Scottish Parliament.
• The Court recognised the wide policy-making authority of the Scottish Parliament, provided it remains within the devolved subjects specified by the Scotland Act 1998 and complies with human rights obligations.
• It was accepted that devolved legislatures may depart from established common law rules, including redefinition of actionable harm, when enacting statutes compliant with their constitutional limitations.
• The Court found the purpose of the 2009 Act—a policy response to public health and compensation concerns—justified the statutory modification of the common law.
• The insurers' arguments that the Act imposed unlawful financial burdens or exceeded devolved authority were rejected.

Legal Principles

• Devolved legislatures, such as the Scottish Parliament, have the constitutional power to modify or revise common law principles within areas of devolved competence, subject to statutory and human rights constraints.
• The relationship between statutes and common law is dynamic; legislatures may alter or replace long-standing legal doctrines to address social policy objectives.
• The criteria for compensation and the definition of actionable harm are subject to legislative change when undertaken within the proper scope of authority.
• The judiciary retains oversight to ensure legislative action does not exceed constitutional or statutory boundaries.

Conclusion

The Supreme Court confirmed the Scottish Parliament’s authority to enact laws that modify common law principles in devolved areas, upholding the 2009 Act as a legitimate exercise of devolved legislative power and reinforcing the evolving relationship between statute and common law in Scotland.