Trade unions are to campaign for a change in the law after a law lords' ruling yesterday drastically cut compensation for the families of tens of thousands of workers who die from the lung cancer mesothelioma after exposure to asbestos dust.

The TUC called for legislation after Britain's highest court ruled that where a worker was exposed to asbestos dust by several employers, each was liable to pay only a proportionate share of compensation rather than the whole amount.

By four to one, the law lords overturned a court of appeal ruling in three test cases that each employer could be held liable for the whole amount. Because the disease can take up to 40 years to develop, many employers have gone out of business and their insurers are insolvent or cannot be traced.

Families won an important victory four years ago when the law lords ruled that any employer who exposed a worker to asbestos could be sued, even if the employee could not prove which exposure caused the fatal illness. But yesterday's ruling severely limits the effects of the earlier victory. The TUC's general secretary, Brendan Barber, said: "The government must act immediately to change the law and ensure that this cruel and unjust decision is reversed."

About 1,900 people die in the UK each year from mesothelioma, and the total is predicted to reach 160,000. The families in the three test cases will now receive a fraction of the compensation originally awarded. Lords Hoffmann, Scott and Walker and Lady Hale agreed in allowing the appeals, with Lord Rodger dissenting.