ISSN 1470-8108 Issue 64 Autumn 2006

Contents:

1. Tipping the Balance: Exit Strategies of UK Asbestos Defendants
2. News Digest

1. Tipping the Balance: Exit Strategies of UK Asbestos Defendants

As the 5th anniversary of the T&N Group (T&N) administration approaches, it is apposite to examine the state of UK claimants' rights in the 21st century, a time and place awash with financial and commercial strategies designed to minimize the liabilities of corporate malfeasors.1 Viewed as pieces of an evolving national jigsaw, developments relating to T&N, Cape plc and Builders Accident Insurance Ltd. (BAI) produce a picture of a society where corporate survival takes precedence over life and death issues, common law principles and human rights.2

On September 6 & 7, 2006, the administrators (Kroll3) of the T&N Group convened creditors' meetings in Manchester to vote on proposals for Company Voluntary Arrangements (CVAs) incorporating the UK Asbestos Trust Fund and the EL4 Scheme Trust Fund for T&N Ltd. and 48 other companies in the Federal-Mogul UK (FMUK) Group of Companies (all in Administration).5 For Kroll's proposals to gain official approval it was required that more than 75% of creditors voted in favour; in fact, the vote was overwhelmingly in support of the administrators' proposals. As a result, T&N can now exit UK administration regardless of its parent company's on-going Chapter 11 proceedings in the U.S. T&N's financial restructuring has cost more than 70m in fees6 paid to UK administrators, lawyers, accountants and other professional advisers; whilst the emergence from the administration process will be welcomed by current employees and customers, asbestos claimants and T&N pension holders7 will forever rue the day when they put their faith, health and future in the hands of their former employer.

Although current and future UK asbestos claims against T&N are estimated at 229-337m ($428-$629m), approximately 92m is currently available for distribution. With 33m at its disposal, the UK Asbestos Trust Fund is expected to pay out 17-20p on the pound to successful applicants belonging to the following categories:

  • UK Asbestos PI Claims – such as those from residents who lived near T&N asbestos factories;

  • Cape Claims – personal injury claims brought by people exposed to T&N products outside the UK, excluding the U.S. and Canada, such as T&N employees in Swaziland, Zimbabwe, Botswana, India or South Africa;

  • Australian Asbestos PI Claims – brought by those whose asbestos injuries were sustained by exposure to T&N asbestos in Australia;

  • Agency Claims – asbestos personal injury claims against companies which acted as agents for T&N;

  • Chester Street Claims – relating to claims concerning exposure to T&N asbestos at shipyards by individual workers, employers, shipyards or their insurers; payment of these claims will come out of a separate pot of 22m (additional to 33m but included in the 92m total).

More generous compensation awards are anticipated from the EL Trust Fund which has 36.74m to distribute in the UK amongst:

  • people who received occupational asbestos exposure whilst employed by a T&N Scheme Company between 1969 and 1995;

  • their dependents or relatives;

  • other employers with asbestos liabilities for the above categories of claimants.

Kroll's actuaries, EMB Consultancy LLP, estimate that EL claimants could receive up to 72p in the pound. Injured workers from T&N's Ferodo factory in Caernarfon, Wales are amongst those who could benefit under the arrangements which were explained by T&N's administrators at a meeting held in August 2006 at the Caernarfon Football Club. In the late 1980s, dozens of Ferodo workers were diagnosed with asbestosis and awarded provisional damages which allowed them to return to court should their conditions worsen. During the administration process, they have been barred from doing so. Meetings such as the one in Wales were held throughout the UK; advertisements about the proposals were run in national newspapers and 50,000+ information packs, containing assorted documentation including a book of 570 pages, was sent to people, such as former T&N workers, who might have a claim against the Trusts.

Since the Group went into administration, compensation claims and legal action against T&N and its subsidiaries have been frozen by court order. According to Kroll, as of April 30, 2006, there were more than 2,000 claims comprising:

  • 1,088 from former T&N employees;

  • 98 from family members exposed to asbestos dust on clothes brought home by T&N employees;

  • 28 from residents in neighborhoods near T&N manufacturing sites; most of these claims relate to exposure suffered by people living in the Armley area of Leeds, the location of the J. W. Roberts asbestos textile factory;

  • 444 indirect claims by parties not themselves exposed to asbestos; such as shipyards or rail companies which used T&N asbestos products and the companies which insured them;

  • 379 by non UK former employees of T&N; such as asbestos mine and/or factory workers from Swaziland, Zimbabwe, Botswana, India and South Africa.8

The approval of the Scheme of Arrangement in September brought an end to the moratorium on the payment of compensation. It is anticipated that in early October 2006, the English Court will give the go-ahead, after which payments to the backlog of applicants whose claims satisfy the requirements of the Trust Distribution Procedures could begin.

The CVA Proposals were the product of years of negotiation between U.S. and UK stakeholders and creditors in what had become one of the world's most complicated transnational insolvency events and “probably the longest ever trading (UK) administration.”9 Threats by the UK administrators to sell-off T&N's UK assets piece by piece during 2005 led to offers by Federal-Mogul which were significantly more generous to UK creditors than those available under the Third Amended Joint Plan of Reorganization (2004).10 Refusal by T&N insurers and reinsurers to pay asbestos claims led Kroll to issue legal proceedings. T&N's EL insurers from October 1, 1969 to April 30, 1995 were Royal & Sun Alliance and the Brian Smith Syndicate at Lloyd's of London, both of which “refused to deal with asbestos-related claims under the relevant policies on the strength of various arguments relating to construction of the policies, and asserted defences of misrepresentation and non-disclosure.”11 In May 2004, after lengthy litigation, an EL settlement was reached with the two named insurers agreeing to provide approximately 36m for distribution to asbestos claimants with valid EL exposure. During the administration process, litigation also took place with Centre Reinsurance International Company (Centre Re), Munchener Ruckversicherungs-Gesellschaft AG (Munich Re) and European International Reinsurance Company Limited (EIRC), members of a reinsurance consortium which underwrote T&N's Hercules Policy.12 Legal proceedings were brought by EIRC against Curzon, by Curzon against Sedgwick, the brokers of the Hercules Policy, and by the administrators against Munich Re and Centre Re.13

There is little doubt that T&N's administrators have wrenched a better deal for UK asbestos claimants than was originally offered by Federal-Mogul's U.S. stakeholders, UK insurers and European reinsurers. In comparison to other Chapter 11 reorganizations such as those for Johns-Manville, USG and Owens Corning, the 5 year administration of T&N does not look unreasonable. And yet, during this time more than 20,000 people in the UK have died from asbestos-related diseases, many of whom would have had valid T&N claims. They and their families would most certainly have benefited had compensation been available during their lifetimes. Maria Sillito lost her parents, her Aunt and her brother to diseases caused by occupational asbestos exposures at T&N's Washington Chemical Company factory in the North East of England. Ms. Sillito believes that:

“Washington Chemical Company got away with murder. The factory wiped out my entire family. I have watched all my life as my loved ones have died painful deaths caused by working with asbestos. I still feel so angry and get so upset thinking about it. I've developed pleural plaques and it frightens me that I may develop mesothelioma. I did not work at the factory. I just lived nearby and through no fault of my own I have developed this. It is always at the back of my mind… I think my family have been shabbily treated by Washington Chemical Company. I have been waiting for so long for this to come to an end. All I want is closure.”14

Kimberley Stubbs, the daughter and granddaughter of mesothelioma victims who were exposed to asbestos emanating from T&N's factory in Armley said:

“T&N have been proven in court to have been responsible for the needless deaths of many innocent people. For that they should pay full compensation and the law should not have allowed this situation to have come about in the first place. The agreed reduction in compensation simply adds to the injustice that asbestos victims past and present have faced. It's not fair, it's not just – the suffering just goes on and on. T&N should be ashamed…again.”15

Concurrently with the T&N administration, the UK's 2nd biggest asbestos group, Cape PLC, has been looking for its own exit strategy. Although T&N is insolvent and Cape is not, both are motivated by the need to cap asbestos-related liabilities.16 Cape's asbestos legacy, which has continually devalued share prices, is viewed as a “significant obstacle to the Group's growth.”17 A Scheme floated by Cape to secure the company's future despite substantial asbestos liabilities18 was approved by creditors in May 2006. On June 7, the Chancery Division of the High Court considered the outcome of the creditors' vote and in a judgement issued on June 16 concluded that the Scheme of Arrangement should be sanctioned in respect of Cape and 12 of its subsidiaries. The initial 40m lump sum payment by Cape into the Scheme coffers could represent a real bargain as actuaries working for Cape have estimated that:

“the aggregate projected discounted value, net of insurance recoveries, of the unpaid UK asbestos-related claims… (is) 119m. This estimate is contained within a range of low and high estimates of 70.2 million and 240.3 million respectively… There is great uncertainty over the net present value of the future claim settlements… in aggregate they are likely to exceed the amount of the net assets included in the current Group Balance Sheet.”19

The plans for the Scheme and the timetable for implementing it which were circulated by Cape in 2005 were criticised by asbestos victims, legal practitioners and politicians. In response, Cape funded independent legal and financial reviews which: “raised a number of issues on the proposed Scheme as a result of which Cape has agreed to make a number of amendments.” Despite these, uncertainty persists over whether Cape will manipulate the cash flow based formula for calculating its top-up obligation. If the company does not replenish the pot, only a percentage of each claim will be paid. This was explained in a note issued by the Forum of Asbestos Victims Support Groups:

“Cape will put 40 million in the Fund to begin with, which it believes should be enough to pay claims for at least 8 years. Cape will review the Fund every 3 years. If there is insufficient money in the Fund, Cape will top it up if it has sufficient cash. Only the initial $40m is guaranteed – there is no guarantee about what, if any, top ups will be made. The scheme limits the requirement on Cape to top up the Fund from 70% of its annual available operating cash-flow… Claims in the future may not be paid. If Cape does not have enough cash, the money in the Fund may fall to a level where payments are reduced or suspended.”20

Since the Summer, asbestos-related personal injury claims against Cape Group member companies have been handled by a new Cape subsidiary: Cape Claims Services Ltd., set up specifically as the payment vehicle for the Fund. Reports indicate that eligibility and levels of compensation for individual claims remain unaffected by the change in administrative practices.

The T&N and Cape Schemes could be regarded as one-off corporate solutions to an obscure problem; this would be a mistake. If the T&N administration were of little relevance to UK PLC, the Kroll website would not celebrate its involvement, pointing out that its President Simon Freakley served “as lead administrator to the Federal-Mogul Group, (in) one of the largest cross-border restructuring proceedings in history.”21 Travers Smith (TS), a City firm which advised Cape, says that the groundbreaking “venture” allows Cape “to continue trading as the (asbestos-related) disputes go on.” According to Keith Bordell, Head of Corporate Recovery at TS, the arrangement has wider applications and “could now be used in other industries such as the mobile phone industry, the nuclear industry and chemical manufacturers, where there could possibly be mass claims.”22 A 2005 TS Press Release was more specific:

“The Scheme is innovative in that it is intended to apply to the great majority of those (principally former employees) who now or may in the future have a claim against Cape relating to asbestos exposure. If the Scheme is approved by creditors and the Court, then in return for the setting up of the Fund, the Scheme creditors will be legally bound – other than in very limited circumstances – only to recover payment for their claims from the Fund and not the Cape Group. The proposals have been designed with a view to enabling all Scheme creditors' claims to be settled whilst at the same time providing the Cape trading business with significant protection from insolvency and removing a significant obstacle to its growth.”

The T&N and Cape Schemes and the possibilities they engender have not gone unnoticed. In the run-up to the 2012 London Olympics, the avoidance of asbestos liabilities is becoming something of a competitive sport in UK financial and legal circles. On August 18, 2006, the Joint Scheme Administrator for the insolvent Builders Accident Insurance Ltd. (BAI), Dan Schwarzmann, announced that following the 2006 Court of Appeal decision in the case of Bolton Metropolitan Borough Council v. Municipal Mutual Insurance Ltd. and Commercial Union Assurance Company Ltd. (Bolton),23 BAI Claims Services Limited would “suspend establishing and paying non-divisible claims,” such as those brought by mesothelioma victims. In a move which should encourage litigants to look to other defendants for recompense, Schwarzmann wrote:

“The situation applies both to claims made to BAI by policyholders and claims made direct by a third party where their employer (and BAI's policyholder) is insolvent. As regards the latter claim, it may be that third party claimants will consider seeking compensation in full from any other relevant (solvent) employer as a result of the recent Compensation Act….

As BAI is not currently able to determine with sufficient certainty that claims made to it are covered by its policies, FSCS24 cannot continue to pay compensation in relation to any non-divisible claims, such as mesothelioma, arising in respect of BAI's Employers' Liability policies.”25

In the Bolton case, the Court of Appeal ruled that insurance liability for mesothelioma is triggered by the onset of the disease rather than the ingestion of the fiber, thirty or more years earlier. “As a result,” Schwarzmann wrote in his 3 page memo, “one of BAI's reinsurers is now asserting that Employers' Liability policies pre-dating 1 January 1972 with similar (manifestation) policy wordings should be interpreted in the same way and has indicated that it is no longer prepared to pay BAI under their reinsurance treaties in respect of mesothelioma claims against such policies from BAI's policyholders.” In a letter accompanying this memo, J. A. Goodwin, Managing Director of the BAI claims handling company, confirmed the bad news: “no payment can be made either by BAI or by the Financial Services Compensation Scheme (FSCS).” If BAI and the FSCS can't pay/won't pay the BAI claims, why should the Policyholder's Protection Board and the FSCS continue to pay claims brought against another insolvent company: Chester Street Insurance Holdings Inc.?26 In his capacity as the Joint Scheme Administrator for BAI, Mr. Schwarzmann will, no doubt, inform these agencies of BAI's predicament. It shouldn't prove too uncomfortable a situation for him, however, as it was he who, in 2001, negotiated the settlement reached by Chester Street, the Association of British Insurers and the government in his capacity as the Joint Scheme Administrator of Chester Street.

Until Parliament reversed the iniquitous decision by the Law Lords' in the Barker case,27 asbestos defendants and their insurers had been enjoying a run of judicial victories which included the 2006 Court of Appeal ruling that eliminated compensation for pleural plaques; at a single stroke, the decision in Rothwell v Chemical & Insulating Co. Ltd. saved UK insurers 25m per year and up to 1.4bn ($2.5bn) in future payments.28 When, just a few months later, the Law Lords ruled in their favor in Barker, it looked like all their Christmases had come at once. Their joy was short-lived, however, as barely 6 weeks later, the Compensation Act 2006 restored the rights of mesothelioma claimants to hold all negligent defendants jointly and severally liable for their asbestos injuries. A column in Insurance Day reported:

“Insurers and reinsurers who may be exposed to UK asbestos claims will not be pleased by this hasty new legislation (Compensation Act). With actuaries predicting a future cost of UK asbestos to the insurance industry of 4bn ($7.6bn) to 10bn (more than half of which relates to mesothelioma), mesothelioma claims set to peak in 2010 to 2015 and the average size of an award for mesothelioma rising, insurers and reinsurers are right to be concerned.”29

The column concludes with a warning of possible government action should the House of Lords uphold the ruling on Rothwell: “This may result in an amendment to the Welfare Reform Bill and additional losses for insurers and reinsurers.”

The asbestos spectre continues to haunt Equitas, the vehicle set up in 1996 to run-off long-tail liabilities at Lloyd's of London. This year, Equitas raised its asbestos reserves for the sixth time in seven years; they now total 2.2bn, a 128m increase over 2005.30 Equitas Claims Director Scott Moser admits that despite progress being made on other fronts “the rise in asbestos claims filings represents the most serious threat to Equitas' financial well-being.” Lloyd's Names are worried that should Equitas run out of money and “go proportional,” any deficits could revert to them. Lloyd's maintains a stony silence on who would pick up the Equitas tab should the unthinkable happen. As one financial expert commented: “With asbestos claims in the U.S. alone still estimated to top $200bn (106bn), this is no academic discussion.”31

Had employers, asbestos producers, trade unions, insurers and the Government acted differently on asbestos much heartache could have been avoided. There is no doubt that companies like T&N and Cape were aware of the risk that asbestos exposure posed to their workforce and customers; they knew and chose to do nothing. Now that they have been faced with the bill for their misdeeds, they plead poverty. The commercial, financial and legal jiggery-pokery which is rapidly becoming the norm will almost certainly impact on the ability of injured workers to obtain compensation from employers or insurers; they will, instead, go cap in hand to a ring-fenced scheme or government fund which may or may not have enough money to pay them the compensation to which they are entitled. Having a ready-made get out of jail card will do little to incentivize employers to ensure safe working practices are followed in the future. With an ever more feeble Health and Safety Executive, no one is safe. And while asbestos victims obtain 17p or 72p on the pound, administrators and their professional advisers will, you may be sure, receive payment in full.

2. News Digest

May 2006: John Edward Williams v Vosper Thornycroft (UK) Ltd. Case Number HQ05X03478

Settlement reached of lung cancer claim brought by John Williams against his former employer. In the 1930s Williams began work in the boiler room at the Woolston Shipyard where he was exposed to asbestos dust. After being diagnosed with lung cancer, he issued proceedings in the English High Court. The defense denied the claim in the absence of asbestosis and pleural thickening; the claimant, who cited the Helsinki criteria, relied on reports from English and Australian experts. The case was settled for 80,000 two weeks before trial. For more information email: Caroline.Pinfold@IrwinMitchell.com

May 2006: Winifred Rice [Widow and Executrix of the estate of Edward Rice, deceased] v. Secretary of State for Trade and Industry and Stuntbrand Line Limited and Robert Francis Thompson v. Secretary of State for Trade and Industry and Stuntbrand Line Limited, No. [2006]. EWHC 1257

The Department of Trade and Industry was held responsible for the operations of the National Dock Labour Board (NDLB) which, in the 1950s and 1960s, organized labor arrangements at docks throughout England and Wales. High Court Justice Silber ruled that the NDLB had an employer's duty of care for the health, safety and welfare of the dockers: “the claimants were compelled to do work to which they had been allocated with the risk of serious consequences for them if they did not comply even though there was a foreseeable risk of serious injury being caused to them by asbestos dust.”

Edward Rice, who died of mesothelioma in 2000, and Robert Thompson who has an asbestos disease, were assigned by the NDLB to unload asbestos cargoes from ships arriving at the Liverpool docks which belonged to a myriad of shipping companies. Their solicitor Kevin Johnson said: “The judge was right to accept that the dock labour boards must bear responsibility for sending dockers to work with asbestos in unsafe working conditions without warning or protecting them. This decision will help other dockers and their families to bring claims for compensation without them having to identify individual shipping companies, many of whom no longer exist.” For more information email Kevin Johnson at: kj@johnpickering.co.uk

July 2006: Publication: Revising the British Occupational Hygiene Society Asbestos Standard: 1968-1982

This paper, which was written by Dr. Morris Greenberg, appeared in volume 49 of the American Journal of Industrial Medicine. Greenberg's detailed analysis of historical documents makes clear that the 1968 BOHS chrysotile asbestos hygiene standard was, without doubt, affected by a decision to accommodate commercial interests. Whilst consultation with workers and trade unionists did not take place, representatives from Turner & Newall Ltd. and the Cape Asbestos Co. Ltd. had significant input into the process of setting and defending the UK hygiene standard with predictable effect: “it underestimated the risks of exposure.”

August 2006: HSE Asbestos Warning to Schools

Recognizing that school caretakers, teachers and pupils could be at risk from asbestos in school buildings, the HSE has issued an asbestos alert warning of the dangers. Pinning or tacking of school work to asbestos board or ceiling tiles “should be stopped.” For more information see: www.hse.gov.uk/asbestos/schools.pdf

September 2006: Surviving Mesothelioma and Other Cancers: A Patient's Guide by Paul Kraus

A book review written by Paul Zygielbaum, another survivor of peritoneal mesothelioma, can be read on the website: www.ibas.btinternet.co.uk

October 2006: Mesothelioma – Working Towards a Manageable Disease

The October 4th conference, being organized by Irwin Mitchell Solicitors, will feature presentations from leading UK medical professionals including Consultant Physician Mick Peake, Professor Nick Thatcher, Drs. John Edwards, Alex Mitchell, Mohammed Munawar and Paul Taylor. For more information contact: Geraldine.Coombs@irwinmitchell.com

October 2006: 1st Mesothelioma UK Patient/Carer Day

The October 5th event, organized by the National Macmillan Mesothelioma Resource Center, aims to provide an opportunity for mesothelioma patients and carers to share experiences and be updated on current developments in medical treatment, benefits, compensation, nutrition and support services. More information is available on the website: www.mesothelioma.uk.com

November 2006: Tackling Difficult Issues in Asbestos-Related Disease Claims

On November 9, the Sheffield and Rotherham Asbestos Group (SARAG) is holding a conference which will cover medical, legal, insurance and forensic accounting issues in presentations by Dr. Robin Rudd, Barristers Richard Astor and Nigel Grundy, Consultant Engineer Reginald Beauchamp, Accountants Julie Hardless and Carolyn Asher. For more information phone: SARAG: 0114 2823 212

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1 British Asbestos Newsletter, issues 45, 46, 48, 51, 53, 55, 56, 58, 60

2 Turner and Newall Ltd. was created in 1920 by the merger of four established UK asbestos firms; from the beginning, T&N played a leading role in the UK asbestos industry, by 1928 it dominated the industry. Incorporated in 1893 as the Cape Asbestos Co. Ltd., and now known as Cape PLC, Cape had asbestos processing and application units throughout the UK as well as asbestos operations in South Africa, Italy, France, and Germany. After T&N, it was the UK's most prominent asbestos group. Builders Accident Insurance Ltd. collapsed in 1998 with liabilities of 40m, a significant proportion of which were due to asbestos-related claims.

3 Kroll: Kroll Corporate Advisory & Restructuring Group. On October 1, 2001, the English High Court appointed Kroll to oversee the administration of the T&N Group.

4 EL: Employers' Liability

5 FMUK website: http://www.fmukclaims.co.uk/

6 From October 1, 2001-March 2005, Kroll billed in excess of 29.9m for services rendered; the hourly rate for Kroll partners was 425. At the September 7 creditors' meeting in Manchester, Kroll's James Gleave estimated that the total costs of the T&N Group administration over 5 years has been 70m, of which 40m went to the administrators.

7 The Settlement Agreement anticipates that the responsibility for T&N Pensions will be assumed by the UK Pension Protection Fund.

8 The Administrators' Proposals for Company Voluntary Arrangements. July 2006. pages 17-18.

9 McAllister D. Champion faces loss of 11m payout as T&N deadline looms. Pensions Week. April 4, 2005.

10 Under the 2004 Plan, UK asbestos personal injury claimants would have received 7.2 pence in the pound; under the CVAs, the Administrators estimate they will receive in excess of 20 pence in the pound. While this still constitutes a significant shortfall, it could be argued that it is nevertheless a considerable improvement.

11 The Administrators' Proposals for Company Voluntary Arrangements. July 2006. page 24.

12 In 1996, for a one-off payment, T&N purchased an additional 500 million layer of insurance to cover asbestos-related disease claims from Curzon Insurance Limited (Curzon), a wholly owned T&N subsidiary; this policy is referred to as The Hercules Policy. Curzon reinsured this policy with a consortium of European reinsurers.

13 Cowan. S. The T&N litigation. Insurance Law Monthly. August 2006. http://clients.adestra.com/informa/Asbestos.htm

14 Press Release. Thompsons Law Firm. August 22, 2006.
http://www.thompsons.law.co.uk/next/family-devestated-by-asbestos.htm

15 Asbestos Company Successful in Cheating British Mesothelioma Victims out of Fair Compensation. September 9, 2006. http://www.newsinferno.com/archives/1234

16 Kazan-Allen L. Cape Asbestos Fund: Serious Proposal or Corporate Scam? British Asbestos Newsletter, issue 59. Summer 2005. website: http://www.lkaz.demon.co.uk

17 Press Release. Cape PLC – Scheme of Arrangement. June 9, 2006.

18 Currently, there are approximately 300 new claims a year. Travers Advises on Formation of Pioneering Insurance Venture. September 7, 2006. http://www.legalweek.com/ViewItem.asp?id=30151
Cape's company accounts for 2005 reveal that industrial disease claims were: 4.6 in 2005 and 3.7m in 2004.

19 Cape Annual Report and Account 2005. Page 50. http://www.capeplc.com/pdfs/annualreport2005.pdf

20 Statement on the Proposed Cape Asbestos Fund by the Forum of Asbestos Victims Support Groups.

21 Simon V. Freakley. http://www.kroll.com/about/governance/sfreakley/

22 Travers Advises on Formation of Pioneering Insurance Venture. September 7, 2006. http://www.legalweek.com/ViewItem.asp?id=30151

23 This decision was handed down on February 6, 2006 and the Case Nos. are: 2005 1277 & 1310 A3.

24 FSCS: Financial Services Compensation Scheme.

25 Letter sent by Dan Schwarzmann, PriceWaterhouseCoopers, to Policyholders with Outstanding Mesothelioma and Lung Cancer Claims, Claimants and Defendants' Solicitors, Brokers and Other Interested Parties. August 18, 2006.

26On January 10, 2001 Chester Street Insurance Holdings Ltd., formerly Iron Trades Holdings Ltd., was declared insolvent. Financial uncertainty over the escalation in asbestos liabilities, which stood at 60m, led Chester Street's directors to propose a run-off of the company's business. See: British Asbestos Newsletter issue 42: Dismal Winter for UK Asbestos Plaintiffs & issue 43: Justice for UK Asbestos Victims.

27 Barker was the lead case in a conjoined appeal which included mesothelioma claims brought by widows Sylvia Barker and Mary Murray and the estate of J Patterson: Barker v. Corus (UK) plc, Murray v. British Shipbuilders (Hydrodynamics) Limited and others, Patterson v. Smiths Dock Limited and others: web link:
http://www.publications.parliament.uk/pa/ld200506/ldjudgmt/jd060503/barker-1.htm

28 See: British Asbestos Newsletter, issue 62, article Apportionment of Liability for an Indivisible Disease?

29 Lambert J. A Time of Change. Insurance Day, August 18, 2006.

30 More than 95% of the asbestos reserves held by Equitas are for U.S. claims.

31 Buckingham L. Who will Pick up the Tab if Equitas fades? May 21, 2006. http://www.thismoney.co.uk

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Compiled by Laurie Kazan-Allen
ÓJerome Consultants