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- Are premium increases on the horizon?
- Insurance and risk
- What options are left for companies caught in the credit crisis?
- Pleural plaques – a ticking time bomb for UK business?
- Is your business vulnerable to the virus?
- Sink or swim – would your business stay afloat after a flood?
- Environmental Liability - the polluter pays
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Pleural plaques – a ticking time bomb for UK business?
On 17th June 2009 The Damages (asbestos-related conditions) (Scotland) Act 2009 came into force, effectively reinstating the rights of Scottish pleural plaque sufferers to claim compensation on the grounds of negligence.
Insurers took swift action; Aviva, AXA, RSA and Zurich, who represent more than half of the Employers’ Liability market, challenged the decision by instigating a judicial review. The outcome of this is expected to have an impact on policy for the rest of the UK; Jack Straw promised a definitive decision on compensation for pleural plaque sufferers later this year.
The British Insurance Brokers’ Association (BIBA) believes the stability of the liability insurance market is at stake. If the House of Lords ruling is overturned, UK businesses will face significant premium increases at a time when they are already struggling to survive the recession.
Pleural plaques are scars on the lungs caused by contact with Asbestos; they are benign and do not cause Mesothelioma, a form of cancer also associated with exposure to asbestos. Solicitors for pleural plaque sufferers maintain that because a proportion of those with the condition may also develop Mesothelioma, victims suffer from the worry and stress of knowing that there is a risk.
In the mid-70’s asbestos was present in over 3,000 products. The Health & Safety Executive (HSE) warns that any building constructed or refurbished between the 1950’s and mid 80’s is likely to contain some type of asbestos. Its widespread use accounts for the growing number of pleural plaque sufferers; experts estimate between 3,000 and 15,000 people develop the condition each year.
The insurance industry argues that pleural plaques are symptomless and, as such, it is not a compensatable condition. To reverse this would set a precedent for other symptomless conditions; creating claims for which insurers have no reserves.
In 2002 the Employers’ Liability market experienced the worse crisis of confidence in decades, as insurers pulled out of the market, businesses were left either struggling to find a provider or paying crippling premiums, some more than 12 times that paid in the previous year. Would reintroducing compensation rights for pleural plaque sufferers in the UK lead to this happening again? And if it did, what would the impact be on businesses that are already feeling the impact of the economic downturn?
Corporate Director, Damien Doran believes it is unlikely that the Liability market will be severely affected in the short term,
“It is too early to predict the long-term impact of this ruling on compensation claims for other symptomless conditions. In the short term insurers may increase premiums to build claims reserves. However, there are a number of factors affecting rates for liability insurance and the ultimate result will also depend on competition and capacity in the market. Insurers are unlikely to make a move that will risk losing market share until the full implications are known.”
In the meantime, Perkins Slade will be monitoring the outcome of the review and the insurance industry's response.
Contact us
To discuss the issues raised in this article or for further information please speak to your usual Perkins Slade contact. Alternatively, you can call 0121 698 8000 and ask to speak to a member of our Corporate team or email corporate@perkins-slade.com
Sources
http://www.oqps.gov.uk/legislation The Damages (Asbestos-related Conditions) (Scotland) Act 2009 (Commencement) Order 2009
http://www.scotland.gov.uk/News/Releases
Damages Act on its way - 01/05/2009
http://www.thompsons-scotland.co.uk
Thompsons help pleural plaques victims have their say in court
http://www.chroniclelive.co.uk
Bid to overhaul pleural plaques compensation ruling, 24/04/2009
http://www.theyworkforyou.com
Pleural plaques: 21 Jul 2009: House of Commons Debate
http://www.biba.org.uk/MediaCenterContentDetails.aspx?ContentID=1098
BIBA response to Government consultation on Pleural Plaques, 29/09/08
http://www.hse.gov.uk/asbestos/basics.htm
Health and Safety Executive, Asbestos basics
http://www.gmb.org.uk
Tribune Article on Pleural Plaques by Steve Kemp, GMB Political Officer
http://politics.co.uk
ABI: Pleural Plaques – insurers launch judicial review against Scottish Damages Act
http://www.lhc.org.uk/
Uses and abuses of asbestos
http://www.thompsons.law.co.uk
Northern Ireland Department of Finance and Personnel - Pleural Plaques consultation
