Asbestosis ruling poses new setback for T&N
Tuesday 14 May 1996
The ruling, coming just after the appeal court in London extended T&N's liabilities on this side of the Atlantic, represents the second setback in six weeks for the group, which as Turner & Newall was once one of the world's largest asbestos groups.
The shares plunged 13p to 162p yesterday, wiping nearly pounds 70m from the group's market value.
T&N has already paid out over pounds 350m in asbestos claims over the past 11 years, of which over pounds 300m has gone to individual victims in the US. The latest ruling threatens the so-called Georgine settlement reached by the Center for Claims Resolution, a co-operative involving 20 asbestos groups of which T&N is a member, which had attempted to cap those liabilities by creating a judicially approved framework for settling out of court the tens of thousands of claims for asbestos-related diseases coming forward every year in the United States.
Last Friday's successful appeal on procedural matters threatens to bring claims back into the courts by lifting the injunction that requires all claimants to use the settlement procedures. T&N has yet to decide what to do next. It has 21 days to mount an appeal against the ruling and it is understood that a high-level representative of the company has flown to New York to meet other members of the CCR to discuss their next move.
A source at the company said yesterday that their legal advice was that there were good grounds for challenging the judgment. But he admitted that the ruling was a setback.
"The main idea was to stop lawyers making a lot of money and for people to get paid more quickly." The latest judgment meant that future claims would be more costly than under Georgine and there would be more of them, he said.
"I think what you will see is a greater number because there will be a number of scurrilous claims and the legal cost will be higher because we will have to eliminate those."
Sandy Morris, engineering analyst at NatWest Markets, said the decision meant "a lot of good effort and hard work had been undone ... the sums may not rise materially, but what poor old T&N needed was an end to uncertainty."
He said the one glimmer of hope was that the ruling had not relied on constitutional ground of a denial of human rights. However, the latest news along with worries about the car markets into which it sells many of its products were likely to cause him to downgrade his profits forecast for this year from pounds 135m to between pounds 125m and pounds 130m.
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