A COURT judgement has shattered the compensation hopes of thousands of people suffering from the asbestos-related condition pleural plaques.

The Court of Appeal decision, which has been called a "victory for no one" has dealt a severe blow to people, many of them former North-East shipyard workers, who live with the fear of developing serious diseases after exposure to asbestos.

Yesterday's ruling effectively wipes out potential compensation claims totalling £1bn, which had been facing the insurance industry.

By a majority, a panel of judges led by the Lord Chief Justice, Lord Phillips, reversed the earlier findings of a High Court judge that pleural plaque sufferers can claim damages.

The Lord Chief Justice and Lord Justice Longmore ruled that although pleural plaques - areas of thick scar tissue in the lungs and diaphragm - showed a person had been exposed to asbestos it did not mean they were suffering from any disease.

Therefore, they argued, they could not make a claim.

But the judges did agree that the case should go to the House of Lords for a final decision.

Lord Phillips said: "There are difficult issues of principle and this will affect a very large number of claims.

"In these circumstances we have concluded that we should take the rare course of giving permission to appeal to the House of Lords on the issue of liability."

Plural plaques are benign, but it is accepted that their presence indicates exposure to the potentially deadly asbestos dust and fibres that frequently cause cancer.

Following the judgement, Roger Maddocks, a partner and industrial diseases legal expert at the Newcastle firm of Irwin Mitchell, which is representing more than 200 sufferers, said: "Today's ruling is terrible news for pleural plaques sufferers. The condition is a marker of unprotected exposure to asbestos, almost always a direct result of negligence on the part of claimants' employers."

Mr Maddocks revealed that over the years, claimants have on average received only £3,500 compensation.

He said: "Simply because the scarring on the lungs is not visible to the naked eye should not mean that this condition is deemed harmless."

He added: "People diagnosed with pleural plaques have to live with the fear produced by the knowledge they could develop a terminal cancer, such as mesothelioma, and this sword of Damocles hanging over them means they will never know whether they have a normal life expectancy."

Mark Dawson, at York-based Corries solictors, which has one of the biggest asbestos legal teams in the UK, described the decision as a "victory for no one."

He said: "This decision overturns 20 years of legal precedent over a genuine health condition and is a devastating blow to the rights of ordinary working people who have been harmed simply doing their job."