RSA 'wriggled out' of asbestos liability

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The Independent Online

Royal & SunAlliance, the UK's second-biggest general insurer, was accused in court yesterday of trying to "wriggle out of its liability" to pay compensation to potentially thousands of victims of asbestos-related diseases.

Royal & SunAlliance, the UK's second-biggest general insurer, was accused in court yesterday of trying to "wriggle out of its liability" to pay compensation to potentially thousands of victims of asbestos-related diseases.

A High Court judge in London was told that RSA and a Lloyd's of London syndicate were relying on an exclusion clause to avoid having to pay millions of pounds to former employees of the asbestos manufacturing group Turner & Newall (T&N), which is now in administration.

Colin Edelman QC, representing T&N's administrators as well as the interests of the asbestos victims and their families, saidthe defence which RSA had the "temerity" to put forward was "just ridiculous".

The insurers argued that a policy clause which excluded cover for pneumoconiosis ­ known as asbestosis when caused by asbestos ­ also excluded other asbestos-related lung and gut diseases such as mesothelioma and cancer.

In a hearing that is expected to last 10 to 12 days, the judge is being asked to decide the strict legal effect of the insurance policies. RSA provided employers' liability cover for T&N between 1969 and 1977.

Separately, RSA yesterday revealed a management shake-up at its Australasian business that will see its managing director in Australia, Michael Wilkins, also take charge as the chief executive of its New Zealand business.

The insurer, which in November revealed a £650m capital shortfall, is planning a A$1.8m (£650m) flotation of its Australasian business later this year. The company has already cut its dividend and axed 12,000 jobs worldwide as part of its attempt to shore up its reserves and amass a £750m surplus.

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