Asbestos Seminar in Westminster
The annual asbestos seminar of the House of Commons Asbestos Sub-Committee took place in Portcullis House on July 12, 2005. The topical agenda of the two hour meeting attracted a capacity audience which included: Margaret Hodge, Minister of State for Employment and Welfare Reform, Nick Brown, formerly the Minister for Work, several MPs, representatives of asbestos victims' groups from Manchester, Liverpool, London, Cheshire and Cardiff, medical researchers, civil servants and asbestos personal injury specialists. Welcoming delegates, Chair Michael Clapham MP explained that the purpose of the Asbestos Sub-Committee was to marshal community and political support to improve the treatment of UK asbestos victims. Recent initiatives of the Sub-Committee had streamlined access to government benefits and increased political pressure to make emerging drug therapies universally available. Clapham was appalled that the use of asbestos was increasing in the developing world and reiterated his commitment to a global ban on asbestos. In June 2005, Clapham had urged Prime Minister Tony Blair to use Britain's Presidencies of the G8 and EU to secure a worldwide ban on asbestos, saying:
“We all recognise asbestos can have serious effects on people's health and we should aim to achieve a global ban… the manufacturing focus has shifted to the developing world and the disease, the disability and the deaths that will be caused by (asbestos) exposure will add to poverty.”
An Early Day Motion that Clapham presented to Parliament on May 25, 2005 called on the G8 and EU to:
“take steps to transfer technological information on asbestos controls and substitutes to developing economies where there is no effective asbestos regulation, including the Bangladeshi and Pakistani ship-breaking beaches, the Korean textile factories and the Chinese, Vietnamese and Thai asbestos cement roofing industries, in a sustained international endeavour to bring about an asbestos-free environment.”1
Kicking off the seminar, Ian McFall from Thompsons Solicitors was scathing about the treatment of asbestos victims by Turner & Newall (T&N), formerly the UK's largest asbestos group. In the presentation Dealing with the Aftermath of Corporate Robbery (T&N), he accused T&N's senior corporate lawyer in the 1950s of “lying repeatedly,” and described the company's treatment of its asbestos victims as the “behaviour of a corporate psychopath.”
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T&N lied to the government and to its workforce; it followed a policy motivated by “corporate greed and corruption” to wear victims and their relatives down by “attrition” in order to minimize compensation payments. Its legal strategy was based on deceit, delay and denial. Citing the infamous case of Charlie Coyle, a Glasgow lagger, McFall read out an extract from the minutes of a T&N Board meeting:
“This man (Coyle) has a very poor expectation of life. If he does succumb, the claim will not be more expensive and without his evidence his solicitors will be in greater difficulty. In short, tactically, we will have nothing to lose by leaving the matter in abeyance.”
Sadly their prediction was accurate. After Coyle died, T&N paid his widow a fraction of what the claim was worth on the condition that she waive all legal rights. For decades, the company outmanoeuvred injured workers and grieving relatives:
“The Company has so far been lucky enough not to encounter experienced and capable lawyers, adequately funded by legal aid or supported by trade unions who would carry out detailed investigations and realise there is no defence to these claims.”
When U.S. asbestos giant Johns-Manville began to affix warning labels to its asbestos products, T&N decided that the “risk of claims was not as great as the risk to loss of sales” and continued to sell its wares with no warning labels.
In view of the escalation in claims from former T&N employees and local residents during the 1990s, the company's acquisition by the U.S. automotive parts manufacturer Federal Mogul (FM) in 1998 astonished UK observers. Within three years of the take-over, a deluge of “claims for unimpaired (U.S.) victims based on dubious evidence of exposure to any particular manufacturers' asbestos product and dubious evidence of attributable asbestos related disease” resulted in FM/T&N taking refuge in Chapter 11 Bankruptcy in the U.S. and Administration in the UK. These financial machinations allowed the company to carry on business as usual whilst, at the same time, consigning all pending lawsuits to a legal limbo.
In the last 3 years, attempts have been made to uncover T&N's murky insurance history. Applications to the Court have enabled Thompsons Solicitors to ascertain that:
T&N had no available public liability insurance and no available employers' liability insurance prior to 1969;
T&N's post-1969 employers' liability insurance purported to exclude liability for asbestos-related disease.
UK administrators took legal action to force T&N's former insurers and reinsurers to honor post-1969 policies. Initial success against Royal Sun Alliance and the Brian Smith Syndicate at Lloyd's of London convinced the insurers to offer £36 million ($62.6m) to settle the lawsuit. The settlement money is invested in an escrow account pending agreement on a Scheme of Arrangement for the distribution of compensation. Unfortunately, eligible claimants constitute a minority of the injured and exclude: employees with pre-1969 exposure, victims of para-occupational exposure - people who were exposed to asbestos brought home on relatives' workclothes and local people who lived near T&N factories. T&N's UK victims “remain caught up in a cross Atlantic battle which has been waged for over three years,” and is likely to continue. The T&N story reveals:
“Failure at all levels. Failure of primary health and safety measures. Failure to make insurance compulsory long before 1969. Failure to implement statutory framework to deal with breaches of health and safety. Failure to protect workers from the insolvency of wrongdoers.”
McFall called on the UK Government to “do everything possible to assist this most beleaguered group of asbestos victims and ensure that such a tragedy and injustice can never be repeated.”
The next speaker was Colin Laidler, whose father Ronald died of mesothelioma on September 26, 2002. Colin and his brother Ronald were the 3rd generation of Laidlers to be employed by T&N. The price paid by the family for years of loyal service was appalling: Grandfather Laidler died from asbestosis, Grandmother Laidler died of lung cancer, Ronald Laidler Senior died of mesothelioma, his widow and one son have pleural plaques.
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Four years after he retired, Mr. Laidler Senior was diagnosed with mesothelioma. Colin recounted:
“I can vividly recall, as a teenager, my father telling me how he had sat at his father's bedside and mopped the sweat from his brow. Sweat that had been caused by the sheer physical exertion of trying to breathe. I can't begin to think what thoughts went through my father's head following his diagnosis. I know what went through my mind and I pray that thought isn't also passed through 3 generations of Laidlers.”
On the same day that Mr. Laidler Senior entered a claim against T&N (May 1, 2001), he began to receive treatment from specialist cancer nurses. The coming months were filled with hospital stays, medical appointments and the paraphernalia required by his failing health: oxygen cylinders, a bath lift, a stair lift, morphine tablets and injections. As ill as he was, he remained determined to provide a modicum of financial security for his wife. Within five months of bringing the claim against his employer of 39 years, the case was settled. Unfortunately, four days later T&N went into administration:
“My father knew about the complexity of the case; he knew of the duplicity and mendacity of some of the actors in this sorry tale; he knew that T&N's legal costs were eating into any monies available and this could prevent him getting his rightly awarded compensation; and he wondered if there would ever be a satisfactory outcome to it all. Now, nearly 3 years after his death, I wonder, as he did then.
When you are employed by someone, you don't for a moment wonder if they are insured, self-insured or reinsured of if they have made a full material disclosure to that insurer or not. You don't wonder who the ultimate owner or employer is or who may become the owner of the business in years to come. You don't wonder whether you will become embroiled in the detailed, and at times incomprehensible, workings of the UK's legal and financial systems; less still those under another nation's jurisdiction.”
As Colin spoke, a photograph of his father was projected on the screens in the Wilson Room. In quiet, measured tones Colin described his father's dignity and trust, a trust which was betrayed. “I hope following today, in this place, that somewhere, someone can restore my family's faith in justice, honesty and fair play, and that our pain and sadness can be made more bearable.” It was fortuitous that Minister Margaret Hodge was in attendance for the section of the agenda which included this resolute and moving contribution; she left the seminar shortly after Colin's talk ended.
An Update on the T&N Ltd. Administration was the subject of a presentation by Simon Freakley and Jamie Gleave, from Kroll Ltd., the court-appointed administrators of T&N. The cross-border nature and scale of the proposed FM/T&N reorganization make this amongst the most complex exercises in insolvency law ever conducted. Initially the UK administrators, whose role is to maximize the assets available to pay creditors, had believed that the use of a U.S. channelling injunction to funnel all asbestos claims to a trust fund would be the most efficient and quickest way to resolve the hundreds of thousands of asbestos claims. Unfortunately, the UK administrators could not support the plan put forward by the U.S. proponents which, they believed, did not deal fairly with or represent maximum value for UK creditors. Discouraged by the lack of movement in the U.S. position, the administrators set a deadline of April 30, 2005, at which time a controlled realization of T&N's assets was begun. Whilst marketing of the company's assets is continuing, a second deadline of September, 2005 has been set; the administrators hope that a mechanism will be found before then which would enable the U.S. plan proponents and UK administrators to agree on the way forward. If not, the administrators will ask the UK court to endorse the withdrawal of T&N's UK companies from the Chapter 11 process.
Information on T&N's current assets and liabilities was presented by Jamie Gleave. As things now stand, the company's liabilities are so high, that only 13-17 pence/pound of claims is available to pay off creditors such as the UK pension fund and U.S. and UK asbestos claimants. The settlement made with the company's former employers' liability insurers last year should result in 60-70 pence/pound being paid; payments could begin in early 2006. Unfortunately, only a quarter of asbestos claimants will be eligible. The £500 million (US$874m) insurance policy issued by three European reinsurers in the 1990s is the subject of litigation; this layer of insurance can only be accessed once T&N has paid out a further £300m in claims. The administrators anticipate that continued litigation will be required to force the reinsurers to honor this policy; if/when the administrators obtain a favourable decision from the courts on this issue, only 5-6% of the sum awarded under this policy will be available to pay UK claims.
Since 1985, the British Lung Foundation (BLF) has been supporting people living with lung disease. The realization that the incidence of mesothelioma, a formerly rare lung disease, would continue to increase for the foreseeable future spurred the BLF to consider what the organization could contribute to the national debate on mesothelioma. In her presentation A Mesothelioma Charter Chief Executive Dame Helena Shovelton highlighted the need for concerted action by asbestos victims' support groups, NGOs, politicians, medical researchers and physicians and explained the BLF campaign which was launched at the March 9, 2005 Mesothelioma Summit.
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During the discussions at the summit, the idea for a Mesothelioma Charter was born; since then, the text has been revised through consultation with interested parties. The Charter asserts that mesothelioma patients and their families have a right to: good quality information, the support of a qualified nurse, the best possible medical treatment, up-to-date advice and assistance on claiming benefits, prompt receipt of benefits, legal advice from asbestos personal injury specialists and guidance on end-of-life decisions and home care. It calls on the Government to: make mesothelioma a national priority, fund medical research in treatment options and produce guidelines on best practice; employers are urged to take all possible steps to avoid future hazardous exposures. On February 27, 2006, a Mesothelioma Action Day will be held by the BLF to raise public, media and government awareness of the harsh reality and prevalence of this killer disease.
The final subject on the agenda, Asbestos Issues in Spain, was addressed by Angel Carcoba, from Confederación Sindical de Comisiones Obreras (CCOO), one of Spain's largest trade unions.
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In the decades preceding the asbestos ban in Spain (2001),2 more than 2 million tons of chrysotile (white asbestos) were imported; during this time 140,000 workers in the Spanish shipyards, railroad works, automotive and textile industries, brake pad and friction material manufacture were exposed to a mixture of crocidolite, amosite and chrysotile. According to the (Spanish) National Centre of Epidemiology, the asbestos mortality rate has risen by 90% from 419 in 1992 to 795 in 2002.3 Unfortunately these statistics do not tell the whole truth; investigations carried out in the province of Madrid revealed annual asbestos deaths of 460. Epidemiologists predict that between 2010 and 2040 there could be as many as 55,000 asbestos deaths in Spain.
The debate on asbestos which took place in Spain from 1980 considered the scientific, social and political implications of hazardous occupational exposure; nowadays, the Spanish asbestos hazard has become a public and environmental health hazard. The European Federation of Fibercement Manufacturers estimates that there are in excess of 70 million tons of asbestos-containing material on and in buildings throughout the European Union. Photographs exhibited by Mr. Carcoba showed piles of asbestos debris littering the countryside. The CCOO, which was at the center of the lobby for the national asbestos ban, has assisted asbestos victims in their battle for compensation and supported their efforts to mobilize. The union has produced and distributed a range of literature on the nature and identification of asbestos-containing materials. It is working with other stakeholders to bring to fruition the following projects:
the setting up of a health surveillance program for at-risk workers; this program has now received the approval of the National Commission;
the establishment of a national mesothelioma register and a program for the psychological and social support of asbestos victims;
epidemiological research in asbestos hot-spots;
legislation to allow the early retirement of asbestos-exposed workers;
the creation of a national compensation fund and procedures which recognize asbestos injuries as occupational;
the adoption of a national protocol to protect the public from hidden asbestos in the Spanish infrastructure; mandatory asbestos audits of buildings and structures.
Acknowledging that the Spanish asbestos experience replicates that in other countries, the speaker put forward a range of proposals for EU action:
the implementation of new measures to monitor compliance with all EU asbestos guidelines;
the harmonization of medical surveillance protocols and asbestos disease registers;
the setting up of procedures to ensure collaboration between work inspection bodies and health and protection systems;
the controlling of cross-border operations;
the regulation of procedures and systems of accreditation for specialised companies (such as those manufacturing chlorine with the use of asbestos diaphragms in electrolytic cells).
In the post-ban era, trade unions have a vital role to play in combating the challenges we face within Europe; further afield, unions have a responsibility to share their knowledge of asbestos with others who have not yet banned the killer fiber.
Issues which were raised during the discussion segment of the program included:
the level of compliance with the Control of Asbestos at Work Regulations; there is no evidence of increased enforcement by the Health and Safety Executive (HSE). The number of HSE inspectors has remained static and asbestos enforcement is not considered a priority issue.
Paul Rowen, the new MP for Rochdale, said that the lack of joined-up government is exacerbating problems faced by people in Spodden Valley who are concerned that plans by “unscrupulous developers” to build on a 72 acre asbestos-contaminated site formerly occupied by T&N will further pollute the environment.4 Rowen said that 3 government departments and 4 agencies have been unable to provide reliable guidance on safety levels for asbestos contamination in soil, rubble and the air.
even successful claimants who obtain compensation under the T&N Employers' Liability Scheme of Arrangement will not obtain 60-70% of the face value of their claims as payouts will be apportioned dependent on the years of pre-and post-1969 asbestos exposure; they could find the 60-70% of face value reduced to 20%.
historically there has been an institutional failure which has continually disadvantaged workers suffering from asbestos diseases; the government needs to investigate how various schemes can be coordinated to maximize the support given to asbestos victims and prevent future avoidable deaths.
Before ending the session, the Chair thanked Colin Laidler and Angel Carcoba for coming to London to participate in the seminar, presenting each of them with framed agendas as a memento of the day. Pledging to continue the work of the Asbestos Sub-Committee, Michael Clapham promised that issues raised during the discussion would be followed up at the highest level of Government.
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August 4, 2005
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1 EDM 233: Action to Achieve a Global Asbestos-Free Environment. Website: http://edmi.parliament.uk/
2 The use and marketing of crocidolite had been banned in 1984.
3 The breakdown of the 795 asbestos deaths is: 259 from cancer of the peritoneum, 210 from cancer of the pleura, 196 from lung cancer and 130 from other causes.
4 Parliamentary Adjournment Debate June 28, 2005. Hansards website: http://www.publications.parliament.uk/pa/cm200506/cmhansrd/cm050628/halltext/50628h05.htm
