Thousands of victims of deadly asbestos dust stand to win compensation totalling £8billion in the biggest insurance payout over an industrial disease.

A landmark House of Lords ruling yesterday overturned a legal principle that has blocked the claims of workers who developed cancer and other diseases. Five Law Lords decided that compensation must be paid to victims or their families in three cases of mesothelioma, a cancer caused by asbestos dust.

Lower courts had ruled that no compensation could be paid because the victims had been exposed to dust while working for more than one employer. That principle was overturned yesterday. The Law Lords, headed by Lord Bingham, decided that the doctrine of the ‘fatal fibre’, used by insurers’ lawyers to maintain that no one can say where an asbestos victim contracted his disease, can no longer ward off the duty to pay compensation.

Now when a victim has been exposed to asbestos in several different jobs, the compensation will be divided between the insurers of each employer, based on how long the sufferer worked for each firm.

Lawyers estimated that asbestos claims will cost insurers £8billion.

But the overall cost to insurrers could be much greater because the case established a principle that could be used by those suffering from other industrial diseases. Tobacco firms could find that they will no longer be able to use the defence that a lung cancer victim had smoked cigarettes produced by several companies.

Yesterday, the Law Lords delivered their ruling in the cases of Judith Fairchild, the widow of Arthur Fairchild from Leeds; Doreen Fox, the widow of Tom Fox from Liverpool; and Edwin Matthews, a 54-year-old mesothelioma sufferer from Rochester in Kent. Mrs Fairchild will be paid £191,000 to compensate for the suffering of her husband, who died in 1996. ‘It has been a long wait,’ she said. ‘I was not very hopeful.’

Mr Matthews will now be paid £155,000 compensation awarded last year but withdrawn after his former employers won an appeal.

The judges gave their decision so that 500 other compensation claims that have been held back waiting for the outcome of the test case can now go ahead. They will give their reasoning later. Many compensation claims are now expected from former workers in the construction or shipbuilding industries in which asbestos was widely used until the 1980s. Asbestos was used in industry because of its fire-resistant properties. It was common in pipes, guttering, lagging, tiles and cement in buildings and in car brake linings.

It was also used in some school buildings, so children may have been affected. Some 5,000 died of asbestos linked cancers in Britain last year. The number is expected to rise to 10,000 a year in the next decade.

As well as mesothelioma, asbestos causes the chronic lung disease asbestosis and other debilitating illnesses.

John Parker, of the Association of British Insurers, said: ‘Insurers will pay compensation within the law set down today. Insurers reserve for these sorts of claims.

‘We will need to study the details of this ruling very carefully as soon as the reasons for the decision become available in order to establish the precise parameters of the law.’

First Published: Dail Mail, by STEVE DOUGHTY.