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Justice at last for Asbestos victims as epic London legal battle ends

The Settlement

7, 500 South Africans suffering from asbestos-related disease have today agreed a settlement with Cape plc. The terms of the settlement are extremely complex, being the product of intensive negotiations over a several weeks. What follows is a summary of the key points.

Cape has agreed to pay a total of £21 million into a Trust fund to be established in South Africa which will make payments to those who can show that they have suffered from asbestos-related disease (“ARD”) as a result of working at, or living in the vicinity of, one of Cape’s former mining, milling, or manufacturing operations in South Africa.

The Trust will symbolically be called the “Hendrik Afrika Trust” after one of the victims, an asbestosis sufferer from Prieska, Northern Cape. The Trust will have 5 Trustees; 2 nominated by the South African Government; 1 by Cape; 2 by the Claimants’ lawyers. The Premiers of the Northern Province and Northern Cape have kindly offered to make resources available to assist in the running of the administration of the Trust.

The Trust scheme will be available to sufferers who are involved in the UK legal action and any one else who can satisfy the Trust conditions, including relatives of deceased victims of ARD. The Trust will thus be “inclusive” in the sense that it will not be available only to those involved in the UK legal action.

The level of payments will correspond broadly to the severity of the disease, mesothelioma awards being the highest (about £5, 250 total maximum); asbestosis (about £3, 250 total max); pleural thickening/pleural effusion (about £1, 600 total max), pleural plaques (about £700 total max).

The £21 million will not however be paid in one lump sum. The first £11 million will be paid by 30 June 2002 provided various conditions are satisfied. One condition is that the South African Government confirms that it will not fund future legal claims against Cape and that it does not pursue Cape for any cost of rehabilitating its former asbestos mines. Another condition is that Cape obtains the approval of its bankers and shareholders for the deal and that is able to raise the necessary finance.

The 2nd £10 million will be paid into the Trust by Cape over a period of 10 years at a rate of £1 million per year. Cape’s ability to meet these further instalments is dependent on the continuing viability of Cape. It is not in the interests of the Trust or the victims who could benefit from it, for Cape to be subjected to further legal action as this would destabilise the Trust.

Rationale for settlement

In view of the evidence we have accumulated, we have become increasingly confident about the prospect of the Claimants winning the trial in April 2002. The problem for us was that it seemed clear that Cape’s financial position is such that it would go into liquidation if it lost the trial. In those circumstances, the only real achievement might have been to set another legal precedent with the victims receiving virtually nothing. This would have been a “hollow” victory for the victims.

Therefore even though we consider that the Claimants are likely to have been awarded considerably more than £20 million at trial, the award would not have been translated into real money. Our objective in the negotiations was thus to obtain the best possible settlement achievable in the circumstances. It was made clear that the Claimants were not prepared to accept a derisory offer. The objective was to secure a “meaningful” settlement. Fortunately, we had the benefit of the views of senior officials of the South African Government, whose unanimous view was that the amount offered would indeed be welcomed by the Claimants.

Thanks

The successful outcome of this case is attributable in no small measure to the support of the South African Government, national and provincial. In particular, the Premiers of the Northern cape and Northern Province and the Minister of Justice have spared no efforts to see justice done for the Claimants. The NUM has lent invaluable support to the affected workers. In the UK ACTSA, successors to the Anti-Apartheid Movement, have campaigned vigorously on the Claimants’ behalf. Support has also been provided by a number of UK politicians, in particular Ann Clwyd MP, Kevin McNamara MP and Michael Clapham MP. In addition, Amnesty International and the Transport and General Workers Union have campaigned on behalf of the Claimants. Credit is also due to the newly appointed Chairman of Cape, Paul Sellars, without whose intervention, this case would probably have continued on a downwards spiral for all concerned. We are grateful, furthermore, for the support of the Legal Services Commission for England and Wales, at times through some difficult negotiations. Without their support the claimants suffering from asbestos-related disease would never have had access to justice.

Wider principle

The Claimants have come along way since this case began. In process many setbacks have been suffered: the deaths of 300 claimants; two Court of Appeal and 2 House of Lords decisions. The case was fought bitterly as there was much at stake for both sides. At various stages of the case, the Claimants prospects have been written off but they have persevered and succeeded. Central to the claimants’ case is the principle that multinational companies undertaking hazardous operations overseas in breach of domestic health and safety regulations should be legally responsible for resultant injuries. The settlement is a salutary warning to multinationals generally against “double standards”.

The case follows in the footsteps of successful compensation claims we have brought in the UK in 1997 and 2000 by Richard Meeran of Leigh Day on behalf of workers suffering from mercury poisoning while employed in South Africa by UK-based Thor Chemicals.

Richard Meeran

21 December 2001