UK: The Control of Asbestos at Work Hysteria 2003

Last Updated: 18 December 2002

By David McIntosh and Richard Tovell

This article first appeared in Insurance Day, October 2002

At the Debate in the House of Commons on 24 October 2002 Labour's new Minister for Work Nicholas Brown signalled that the Government is to press ahead with amendment of the Control of Asbestos at Work Regulations 1987, and the HSE promises that the much delayed new regulations will be published next week. They could be yet another nail in the coffin of UK's industry and its beleaguered insurers. As usual, it is worth looking across the Atlantic to see what lessons can be learned.

Lloyds and the London market are already reeling under the weight of a never ending stream of US judgments caused by the exorbitant awards that the US Courts are happy to make and the "me too" mentality of US claimants. The recent study by the Rand Corporation has identified that an astonishing two-thirds of US claimants have not suffered any detectable physical injury. Greedy US attorneys are busy lining their own pockets as they take large percentages of damages from over-compensated non-injured claimants at the expense of tomorrow's deserving claimants. This has been further fuelled by February's decision in the Californian Superior Court in the case of Fuller-Austin that requires insurers to pay to companies now the identifiable value of claims that may arise in the future.

The crippling financial burden on US industry has forced more than 60 regular US asbestos defendants into bankruptcy, 22 of them within the last two years and many others are teetering on the brink. Compensation funds such as that set up by Johns Manville in 1982, are running out of money and are reduced to paying a few cents in the dollar. As each company or insurer fails, the pressure on the surviving companies increases exponentially.

This catastrophic situation has been largely created by the US courts, and despite lobbying by claimant as well as defendant lawyers, the US Government has been slow to recognise the enormity of the damage that is being inflicted on US industry. So far no effective action has been taken and much of the political thinking still favours the view that action to protect companies will somehow allow "the companies" to escape punishment - a curious anthropomorphic sentiment when the original decision makers are long dead and it is today's employees and shareholders who will suffer the consequences of company failures.

Belatedly the chairman of Washington's Congressional Judiciary Committee, Patrick Leahy has indicated a willingness to contemplate some form of protective legislation although what it will be and when it will be implemented is not yet clear.

In the meantime the recent attempt by US industry to fight back lies in ruins. The sheer scale of the action in the Kanawha County Circuit Court in West Virginia brought on behalf of 8,000 Claimants against 259 Defendants is difficult to comprehend. Where a legal system allows a trial to begin without proper differentiation between sick and non-sick claimants it is small wonder that most of the Defendants have panicked and settled - at an overall cost rumoured to be approaching a mind boggling $3 billion.

So what do we have to fear from the amendments to the UK's Control of Asbestos at Work Regulations?

In the UK it is the Courts as well as the Government that can create new law. Our highest court, the Judicial Committee of the House of Lords, has demonstrated an open doors policy towards foreign claimants who seek to sue the UK parent of multinational companies here instead of the subsidiaries in their own countries. The same Court, in the recent Fairchild case, has found in favour of mesothelioma claimants against corporate defendants in the absence of scientific evidence establishing which defendant cause the injury. Neither the House of Lords nor the UK Government has so far shown any understanding of the acute problem that historic liabilities for asbestos related disease is causing British industry. It will take an extreme optimist to believe that statutory protection will be created to prevent the pursuit of claims from the "worried well".

At this most difficult time the UK's Health & Safety Commission, in responding to the EU Chemical Agents Directive of 1998, is poised to create the biggest upset, both physically, and legally, in the asbestos problem since asbestos was first used in this country a century ago. Although decades have passed since asbestos was freely used in the UK, there are still several thousand tons of asbestos still lurking in buildings, much of it undetected and a proportion of it, the more harmful blue (crocidolite) and brown (amosite) asbestos. Inevitably, at regular intervals, it is accidentally disturbed by contractors and they must be added to the long list of potential claimants. At first blush the HSC's proposals appear perfectly reasonable, who after all can argue with the proposition that if there is a dangerous substance, it should be identified and then made safe or removed. It is when the practicalities of what is proposed are considered that the problems emerge.

The HSC has calculated conservatively that there are 1 million workplace premises that may contain asbestos and under the new regulations, as currently proposed, a detailed survey will have to be carried out of most of them. Any asbestos that is detected that cannot safely be contained will have to be removed. Quite where the army of competent and experienced surveyors and contractors will come from to allow the programme to be completed, no doubt within a tight time schedule, is difficult to imagine but what does not take great imagination is to foresee that a rushed programme will result in incorrect assessments, failures to detect dangerous asbestos, unnecessary removal of inert and harmless asbestos, and unnecessary exposure of contractors and occupiers of buildings.

The HSC's estimates of the direct cost to industry have varied between £1.5 and £5.1 billion but there is likely to be greater long term damage. The proposed regulations not only require each company to identify and contain or strip out any harmful asbestos but they must create and maintain an accessible register of all asbestos that remains. This will undoubtedly give the green light to activist claimant lawyers and we will surely see local advertising for individuals who have at some time worked for any of the companies who disclose the existence of asbestos in their work places. And who will differentiate as to whether it is relatively harmless white asbestos cement - it's all asbestos isn't it?

So where will industry turn for protection? To Insurers? Where is the badly needed reform that might for instance, set up a statutory scheme of compensation in return for protection from unmeritorious claims. So far the depth of understanding that is apparent from the HSC and the Government is not encouraging. In common with virtually every country in the world, the UK has an asbestos problem. It needs careful and considered handling. In an increasingly litigious world, the last thing that asbestos needs is shaking up.

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