By Carmel Crimmins
LONDON (Reuters) - A court has ruled that insurers should pay compensation for exposure to asbestos but has softened the blow by significantly reducing the size of pay-outs.
Aviva
The high court on Tuesday rejected the insurers’ argument that pleural plaques could not be categorised as an injury or disease and ruled that anxiety caused by the possibility of people with the scarring developing an asbestos-related disease was a basis for damages.
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"I am satisfied that when, as in the instant cases, anxiety is engendered by tortuously inflicted physiological damage it can properly contribute to ’damage’ or ’injury’ so as to complete the foundation of a cause of action," Mr Justice Holland said in his written verdict.
But Holland slashed the level of compensation to be awarded, ruling that provisional damages should be between 3,500 and 4,000 pounds rather than the previous range of 5,000 to 7,000 and final damages should be between 6,000 and 7,000 pounds compared with the previous range of 12,500 to 20,000.
Holland awarded 4,000 pounds compensation to six of 10 claimants involved in the case and pay-outs ranging from 7,000 to 33,292 pounds to the remaining four, who were given extra compensation for loss of earnings and, in one case, depression.
Zurich said it was considering appealing the decision but it welcomed Holland’s "pragmatic review of the appropriate levels of damages that should be awarded for people with pleural plaques".
Dominic Clayden, claims director for Norwich Union, said it was also considering an appeal. He declined to say how much NU had set aside for asbestos-related claims but said the figure was not material.
No one from the UK government’s Department of Trade & Industry was immediately available for comment.
COMPENSATION CUT
One senior actuary, who declined to be named, said the cut in compensation payouts might discourage lawyers from taking on pleural plaque cases which would bring down the potential cost of such claims to the UK insurance industry to the low end of a 200 million-1.4 billion pound range forecast for the next 35 years.
The trade union Amicus, whose members were involved in the landmark case, welcomed the ruling.
"This judgement is good law and good news for thousands of workers. Asbestos is not yesterday’s problem," Amicus General Secretary Derek Simpson said.
According to Norwich Union, claims facing the industry for pleural plaques have risen to 3,300 a year in 2002 from 200 in 1990.
UK insurers, which have already paid around 1.5 billion pounds in UK-based claims for asbestos-related diseases, face 4-10 billion pounds of costs from asbestos claims over the next three decades, the UK’s actuarial profession said last year.
The use of asbestos, a cancer-causing mineral fibre that was used in a wide variety of products such as gas masks for its heat-resistant qualities, has declined sharply in Britain since the 1970s. But it takes 30 to 50 years for mesothelioma, seen as asbestos’s "signature disease", to develop.
Pleural plaque claims are expected to fall, mirroring the declining use of asbestos in Britain.
In the United States, around three quarters of all claims focus on the fear of potentially catching an asbestos-related disease rather than an actual illness.
