EDINBURGH, Scotland—Several insurers have lost an appeal challenging a Scottish law that provides for compensation to people suffering from pleural plaques, an asbestos-related condition.

The Court of Session in Edinburgh on Tuesday upheld a Jan. 8 ruling that said that the Damages (Asbestos Related Conditions) (Scotland) Act should be allowed to stand.

The appeal was brought by AXA General Insurance Ltd., a unit of Paris-based AXA S.A.; London-based insurers Aviva P.L.C. and RSA Insurance Group P.L.C.; and the U.K. arm of Zurich Financial Services Group.

The Court of Session on Tuesday rejected the insurers’ challenge that the Act is illegal under Scottish law. It also ruled that while the insurers’ property rights under the European Convention on Human Rights had been “interfered with” under the Act, that interference was justified.

The Damages (Asbestos Related Conditions) (Scotland) Act was passed in June 2009 and overturned a 2007 U.K. House of Lords ruling that stated that pleural plaques were not compensable.

Pleural plaques are scarring of the lungs that indicate exposure to asbestos and, while they can be a signal of future disease, do not necessarily lead to ill health.

The Assn. of British Insurers said Tuesday that the insurers would take their appeal to the Supreme Court.