The House of Lords upheld three test appeals, brought by company insurers who argued that damages should be limited in cases involving several former employers, none of which could be specifically blamed for the onset of the fatal asbestos-related lung disease mesothelioma.

About 1,900 people die in the UK each year from the disease and the decision will affect compensation claims running into millions of pounds.

The leading test case concerned Sylvia Barker, 58, of Flintshire, who was awarded £152,000 in the High Court three years ago as compensation for the death of her husband.

Vernon Barker died, aged 57, in 1996 after being exposed to asbestos whilst employed at John Summers and Sons at its Deeside steelworks and another company during 20-years of self-employment.

Mrs Barker’s damages will now be reassessed by the High Court to reflect the proportion of blame attributable to her husband’s time with Summers rather than 100 per cent liability for his illness and death.

Four years ago, in a similar claim, Law Lords ruled that an employer who negligently exposed a worker to asbestos could be held 100% liable even if the employee had worked for several companies and it could not be proved which of them had caused the illness.

However, in today’s appeal, it was decided that an employer’s liability should be limited on a percentage basis to reflect the extent to which it contributed to an employee’s exposure to asbestos.

Adrian Budgen, a personal injury lawyer at Irwin Mitchell, called the ruling "depressing."

He said he felt a "great sense of injustice on behalf of the victims of asbestos related illnesses who will receive substantially less compensation for their suffering and grief than they otherwise might have."

Lawyers said new asbestos cases, judged in the light of today's ruling, will become much more complicated as the courts have to quantify the extent to which an employer was responsible for asbestos exposure.

Peter Williams, a lawyer at Field Fisher Waterhouse, said: "These people have effectively been poisoned by their employers. Now they have to establish which previous employer, or employers, exposed them to asbestos and by how much. This will need a series of expert witnesses and cases will become more complicated and long-winded."

The Lords’ 4-1 majority judgment also covered two other appeals.

Hydrodynamics, a UK shipbuilder, employed John Murray at its Wearside yard for around 40 per cent of his working life. Mr Murray died in November 1999. His widow Mary, 84, was awarded £45,000 in March 2004 but insurers for the shipbuilders argued that, on a "time exposed" basis, they should pay only a proportion of the damages because the employer contributed only 42% towards Mr Murray’s total exposure to asbestos.

The same argument was raised in the case of John Patterson, who died in May 2002 having worked with asbestos for a large part of his working life.

In January 2004, his son and executor James Patterson was awarded £40,000 against Smiths Dock Ltd, whose insurers argued that it contributed less than 9% towards his total exposure.

The awards in those cases will now go back to county courts for reassessment.

Mr Williams warned that the potential for much lower pay-outs may discourage victims from claiming altogether.

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