The ruling, made last month, could pave the way for thousands of claims by people who have developed asbestos-related diseases as a result of exposure during their work.
Five law lords, headed by Lord Bingham, overturned a Court of Appeal ruling which had denied compensation to victims because they could not prove which of several employers was responsible for their illness.
It has been estimated that insurance companies are likely to have to pay out up to £8bn to victims in coming years as a result of the decision.
The reasons behind the decision are set out in a 111-page written judgment published on Thursday.
No hesitation
One of the law lords, Lord Nicholls, said he had "no hesitation" in allowing the appeals.
He said: "Any other outcome would be deeply offensive to instinctive notions of what justice requires and fairness demands."
"A former employee's inability to identify which particular period of wrongful exposure brought about the onset of his disease ought not, in all justice, to preclude recovery of compensation.
"So long as it was not insignificant, each employer's wrongful exposure of its employee to asbestos dust and, hence, to the risk of contracting mesothelioma, should be regarded by the law as a sufficient degree of causal connection."
Lord Bingham said the case hung on six points being satisfied.
Click here to read his judgment.
In this case he was convinced that they were.
The Law Lords were examining test cases brought by a man who has mesothelioma - a form of respiratory cancer caused by exposure to asbestos - and two widows whose husbands died of the disease.
The three who brought the cases were:
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