Turner & Newall Asbestos Victims Speak Out
Purpose of the meeting
The public meeting was organised by asbestos victims support groups1 and supported by personal injury solicitors acting on behalf of Turner & Newall (T&N) claimants.
The purpose of the meeting was to let T&N claimants and their families know what is being done by the Administrator, their solicitors, trade unions and MPs to ensure that compensation is paid to them and also to build a campaign in support of T&N claimants.
Messages of support
Ruth Kelly, Financial Secretary to the Treasury, sent a message of support, saying that ‘on the 21 October herself and Nick Brown, along with officials from the Department for Works and Pensions, the Department of Trade and Industry and the Treasury, met with MPs Michael Clapham, Tony Lloyd, Tony Worthington and John Battle to discuss a way forward for T&N claimants’.
– Clydebank Asbestos Support Group sent two representatives from Glasgow with
a message of support.
– Laurie Kazan-Allen sent a special edition on T&N from her latest British Asbestos
Newsletter for distribution at the meeting2.
– Nancy Tait MBE provided information on a T&N case from her organisation, OEDA,
for distribution at the meeting.
– MPs from all over Greater Manchester sent letters of support which were made
available at the meeting.
Attendance
Ninety five people attended the meeting, including T&N asbestos victims and their families, campaigners, solicitors and trade union representatives.
MPs present: Tony Lloyd, Ian Stewart, Andy Burnham, Patsy Calton.
Acknowledgements
The meeting acknowledged the assistance provided by Geoffrey Tweedale’s history of T&N3 and the work of MPs on the All Party Parliamentary Sub-Group on Asbestos.
Speakers
James Gleave – Administrator Kroll Buchler Phillips (KBP)
Ruth Davies – solicitor John Pickering & Partners
Tony Lloyd MP
Nigel Bryson – GMB
Key Points Made by the Speakers
Ruth Davies and James Gleave
Background
The US company Federal Mogul bought T&N in 1998 and sought Chapter 11 Bankruptcy protection due to a vast increase in asbestos claims in the US, forcing T&N into Administration in the UK on the 1st October 2001. Federal Mogul continues to trade but payments to all creditors have ceased.
Administrators
The Administrators have been appointed by the court and do not represent Federal Mogul. The Administrators argue that they have to represent all the creditors equally. Their main job is to keep the whole company viable and making money to pay the creditors eventually. In the UK there are 13 major factories, employing 5000 people whose jobs depend on continued trading. In the year before Federal Mogul went into Administration, they paid out $350 million in asbestos claims more than they made in profits. Over 90% of the claims were made in the US.
It is not certain how long it will take to bring the company out of Administration. In the UK a year in Administration is a long time but it usually takes years in the US. It is hoped that in FM’s case it will be quicker. The company will, at the end of Administration, be owned by the creditors, of whom asbestos creditors in the UK and US will be the majority shareholders.
How much will be paid out is not known, but past experience of such bankruptcies suggests that payments will be very small compared to payments from civil litigation.
Creditors Committee
Asbestos victims of T&N in the US and UK are creditors. In the UK, solicitors represent asbestos victims on the creditors committee. Ruth Davies’ colleague, Anthony Coombs, sits on both US and UK creditors committees. It is important to have UK representation on the US committee because the UK claimants are a small minority.
The US lawyers get paid $thousands for their work. The Administrators have already been paid £5 million as at June 2002. Furthermore, they are paying large sums to two of the most expensive legal British firms to provide advice to the US on UK future claims.
If these huge costs continue to be paid there will be no money left to pay asbestos victims! The UK solicitors put in hundreds of hours of work and get nothing.
Can the UK claims be separated from the US and paid now?
Anthony Coombs proposed, with the support of the Administrators, that an interim payment is paid to UK claimants now. The Administrator has the money to do this. This is because there are some 400 UK claimants and all are sick. In the US there are some 180,000 claimants most of whom are not sick. This proposal was rejected.
Two other proposals, to the benefit of the UK claimants, were put forward: the setting up of an emergency scheme to pay the dying and very sick and a trust fund for UK claimants, but it is not possible to bind future claimants to such schemes, (they can in the US).
The US committee has not agreed so far.
Can claimants get paid by T&N’s Insurers?
Between 1931 and 1969 when employers liability insurance was not compulsory Midland insured T&N but they bought out this insurance in 1990 for £11 million.
There is now no insurance for those T&N claimants exposed to asbestos before 1969.
Royal & Sun Alliance (1969 and 1977) and Lloyds (1977-1995) provided employers liability compulsory insurance to T&N for the periods in brackets. But, they excluded asbestosis from the policies and are claiming that T&N failed to disclose information to them so that they are not liable for claims. The Administrator is challenging the insurer’s refusal to accept liability in court on 23rd January 2002.
If the judge decides the insurers are liable some of the claimants will be able to get compensation from Royal & Sun Alliance and Lloyds.
Another insurance policy was taken out in 1996, the so called ‘Curzon’ policy. It is not available until triggered by £690 millon claim value and must meet all claims world wide. This is currently not available.
Tony Lloyd and Nigel Bryson
What are MPs doing?
MPs on the All Party Parliamentary – Asbestos Sub Committee have put down early day motions in Parliament and spoken in debates and to ministers. MPs have met with ministers from several departments concerned. So far the Government has said that no payment can be made from the Financial Services Compensation Scheme. Some claimants can get a payment from the Pneumoconiosis ( Workers Compensation) Act ’79, but people with pleural plaques or who were exposed in the community get nothing from this scheme. Payments from this scheme are very small for most people who are eligible.
Time is running out for many claimants and concerned MPs are pressing the Government to make an exceptional payment to all T&N asbestos victims, some of whom are now in extreme distress.
What are the trade unions doing and what should be done for T&N claimants?
All the trade unions are impatient at the failure to provide compensation to asbestos victims. In 1995 the GMB set up its "Asbestos is still a killer" campaign and that campaign will still continue. Nothing can be done now to prevent the harm that has already been done but we must prevent future generations suffering from these diseases. We can’t wait another 40 years for research to determine whether badly managed asbestos in buildings will cause disease and death. The proposed regulations to manage asbestos in buildings must be supported.
Some people say that the complex issues regarding Administration and insurance liability make it impossible to do anything now and anyway it would be too expensive for the government to step in. Others say the government shouldn’t bail out the insurers or Federal Mogul. But why should dying asbestos victims always be the ones who have to wait? The government paid £1.2 billion on a Social Services smart card that had to be scrapped and paid countless millions on the Dome for which there are as yet no audited accounts!
It is not at all unreasonable for the government to pay interim payments now and to recoup the money at a later date from insurers and the Administrators. After all, the Compensation Recovery Unit claws back benefits from compensation paid to asbestos victims. The government can recover costs at a later date: they won’t be bailing out Federal Mogul. Asbestos victims and especially those dying from asbestos diseases must be paid now.
The government should introduce an exceptional, interim payment scheme to T&N asbestos victims now.
Conclusions
T&N asbestos victims are unlikely to get any compensation from Federal Mogul for a long time. Some victims may get compensation from insurers, the majority will not. Some will get a payment from the government compensation scheme, through the Workers Compensation Act, but these payments are very small, especially for posthumous claims.
What we should do now
Contact your MPs and ask that they attend the All Party Asbestos Sub-Group and support their colleagues.
Ask your MPs to support the call for the government to make exceptional, interim payments to all T&N claimants.
Ask your MPs to support an urgent review of the Pneumoconiosis (Workers Compensation) Act 1979.
Asbestos support groups will urgently call on personal injury solicitors to ensure that applications to the courts are made to protect claims from T&N asbestos victims. If you know of someone who cannot find a solicitor to take up their case contact your asbestos victims support group
Support events to be organised by the asbestos victims support groups to publicise the court case on 23 January to decide on liability of insurers
November 16, 2002
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1 Bradford Asbestos Victims Support Group; Cheshire Asbestos Victims Support Group; Clydebank Asbestos Group; Derbyshire Asbestos Support Team; Greater Manchester Asbestos Victims Support Group; Merseyside Asbestos Victims Support Group; Northeast Asbestos Support & Awareness Group; upational & Environmental Diseases Association; Ridings Asbestos Support & Awareness Group; Sheffield and Rotherham Asbestos Group.
2 Laurie Kazan-Allen editor "British Asbestos Newsletter."
3 Geoffrey Tweedale author of "Magic Mineral to Killer Dust - Turner & Newall and the Asbestos Hazard" ISBN 0-19-924399-9.
