Defending Asbestos Claims

Introduction

The purpose of this Note is to provide an introduction to the world of defending asbestos claims from the perspective of the employer or organisation faced with such a claim and to suggest positive steps which can be taken now if previous exposure to asbestos or products containing asbestos is suspected.

It is primarily intended for employers and/or companies who have acquired companies, either directly or through reorganisations and where due to the passage of time there may be limited records both generally and with respect to any indemnity insurance in place or where the insurance cover does not provide cover.

The receipt of a letter of claim many years after the event comes as a shock particularly when the financial ramifications are taken into account as these claims are relatively expensive and have the potential to wipe out the entire assets which may have been retained in a company.

The law is as at 18 July 2008.

The Material

Asbestos is a commercial term for a variety of natural silicate materials. Like all minerals asbestos is taken out of the ground.  It is a mineral with excellent fire and heat resistant qualities hence its attraction.  When crushed or milled it can be broken down into extremely fine fibres and in the past these fibres have been woven to make asbestos cloth or mixed with other substances to make a range of products many of which have been extensively used in the building trades and incorporated into the fabric of commercial public and domestic buildings.

Asbestos types are commonly known as white asbestos, blue asbestos and brown asbestos.  Danger from products containing asbestos occurs when physically cutting the material (particularly indoors) or when the product is damaged or begins to disintegrate.

It is worth noting that many people exposed to large quantities of asbestos or asbestos dust do not develop any asbestos related disease at all during the course of their lifetime.  Sadly some people who were only exposed to limited amounts of asbestos have subsequently contracted a fatal condition and relatively limited exposure can result in significant claims being made, often against companies who did not expose employees to any or any significant levels of asbestos dust or had no knowledge of such exposure.

The Problem of Latency

The problem with asbestos is that exposure to asbestos dust or fibres which are inhaled is now known to cause asbestos related conditions [some of which are fatal] but the period of time before the conditions manifests itself can be significant.  It is this delay or latency period which can and does cause problems in defending claims whilst in some situations providing the opportunity for a robust defence and rejection of the claim.

We often see claims by former employees who were exposed to asbestos in the early years after the Second World War and have only just contracted an asbestos related condition.  This is why defending asbestos claims can present a number of practical difficulties to those companies in receipt of these claims particularly if they have not faced similar claims in the past.

Latency periods – general guidelines

1		Pleural plaques/Pleural thickening	10 years
2		Asbestosis	10-20 years
3		Lung cancer	20-50 years
4		Mesothelioma	20 – 50 years

The above medical conditions attract compensation through the Courts save for the less serious medical condition known as pleural plaques which as a result of a recent House of Lords decision is no longer compensatable in England and Wales.  However the government have been asked to review the pleural plaques decision and is currently considering a no fault scheme of compensation.

Who Was Exposed

Mainly manual or skilled workers where exposed in employments where asbestos or products containing asbestos were utilised.

	Primary Users	Re-Used
	Shipbuilding	Shipbuilding
	Cement	Construction
	Construction	Boilers
	Boilers
	Insulation Products
	Friction Products
	Power Stations

What Should I Do?

It can be very difficult to make enquiries of events after 50 plus years and you will need specialist advice but there is much help available from those who understand this complex subject.  The Claimant might have been exposed to asbestos elsewhere and this may be very relevant from your point of view.

It follows that the first and immediate step an organisation might wish to take is to establish by reference to its documents or long serving directors/employees whether the company ever used asbestos in its products or work or employed people off site at locations where they may have been exposed to asbestos materials or dust caused by other contractors.

Enquiries regarding premises and their maintenance where asbestos or products containing asbestos was contained in the fabric of the building might also be undertaken.  Try and find out the duration and intensity of exposure and the colour of asbestos whether it be blue, brown or white.

Insurance Problems

Tracing insurance cover for the relevant period is a major concern and difficulty.

Many claims arise from employment and exposure to asbestos.  Prior to 1972 when compulsory insurance for employers liability was introduced in Britain (1975 in Northern Ireland) not all companies [particularly smaller companies] had employees insurance cover in place.

Although many companies [particularly larger organisations] did carry insurance for employers liability prior to this date some of those insurance companies e.g. Builders Accident and Chester Street Holdings with a relatively high exposure to industries where asbestos was utilised have gone into liquidation leaving solvent companies exposed to claims and the costs of defending them.

Those companies who did hold insurance for Employers Liability claims prior to 1972 cannot always establish which insurer was on risk and are not therefore in a position to rely upon such insurance as they have.  This can be a problem if no or no proper record of insurance has been maintained.  Even when insurance policies have been identified there may still be problems with cover.  The problem arises by virtue of the policy wording for Employers Liability cover which typically provides for cover for injury illness or disease caused during the period of insurance.  Not all do.  Some utilise the wording often utilised in Public Liability policies which commonly provides for injury or damages arising during the period of insurance.  These policies may not apply as no injury (in medico-legal terms) was caused at the time of exposure. 

These issues if they arise will need careful review and some test cases are currently proceeding to appeal this year and are anticipated to go to the House of Lords.

The Likely Cost of a Claim

This will depend on the type of asbestos condition which has been contracted and hopefully this information will be set out in the letter of claim.  The amount of the award in fatal cases will depend on the age of the deceased (or soon to be deceased), the number of dependants (if any) and his [or her] income levels.  In addition there will be the legal costs which will be recovered in the event of a successful claim or court hearing.

Based on our experience we suggest the following average settlements:-

	Condition	Damages
	Pleural Thickening	£30,000
	Asbestosis	£35,000
	Lung Cancer	£125,000
	Mesothelioma	£150,000

In addition in the absence of insurance cover you will be responsible for your solicitors costs and expenses and those of the Claimant.  These may be significant.

What More Can I Do?

There are many avenues of enquiries that will assist your case. Detailed evidence is crucial and there is assistance available to trace insurance records and employment records.  Previous cases which may also assist in defending the claims.

It follows from the foregoing that it is important to retain experienced defence solicitors who should be able to demonstrate previous experience handling the defence of these claims.  There are not that many firms or counsel with such experience as many of these claims and the defence of them have been directed to a limited number of practitioners by insurers.

All organisations should be very meticulous in retaining every scrap of evidence relating to insurance issues for the future including policies, receipts of payments, name of brokers and the history of any type of claim .

Andrew West and Simon Lindsey whose contact details appear below have many years experience between them and will be happy to deal with any enquiries you may have before deciding which firm to instruct in the event of a claim being made.
 

Practical Steps

1. Check and search company records
2. Check broker records  
3. Check individuals recollection      
4. Review Contract Records  
5. Obtain Company History
6. Seek out and make enquiries of long serving or retired employees
7. Consider Retro Cover with Broker

Clarke Willmott

The Insurance Department of Clarke Willmott has extensive experience of defending claims arising out of exposure to asbestos and act for both insurers and companies both large and small.  Andrew West and Simon Lindsey are members of the Forum of Insurance Lawyers Disease Specialist Interest Group.

Andrew West 
Partner       
tel: 0845 209 1545     
email: andrew.west@clarkewillmott.com   
fax: 0845 209 2544     

Simon Lindsey
Senior Associate
tel: 0845 209 1580
email: simon.lindsey@clarkewillmott.com
fax: 0845 209 2544