Scapa loses asbestos damages case in US

Scapa Group, the adhesives company, came unstuck yesterday over asbestos liabilities within the group, as it was hit with a $537,500 bill to settle damages brought by former employees.

A US court handed down judgment on a long-running case involving workers in Scapa's former paper mill in Louisiana. The judge found against Scapa, awarding $25,000 each to seven plaintiffs, and $12,500 to another plaintiff. Interest and costs added another $350,000 to the bill.

Scapa has vigorously defended the claims and has so far been successful in throwing out a number of previous court cases against it. "In view of the procedural irregularities in this case and the strong track record Scapa has had defending claims, the board intends to appeal," a statement from the company said. It has had forensic tests conducted on its machinery, which it claims establishes that exposure to asbestos was extremely low. But yesterday's verdict follows another similar judgment in Baltimore, where Scapa was ordered to pay $3.5m.

Scapa no longer owns its paper business, but has retained all the liabilities arising from the division. A spokesman for the company said that all costs arising from the court cases were fully covered by its insurance. But this did little to appease investors, and shares fell nearly 9 per cent during the day, closing at 26.5p and giving the company a market capitalisation of £38.36m.

The US has seen a huge increase in litigation, after a number of courts began ruling that anyone exposed to asbestos could claim against their employer, regardless of whether they had any symptoms of the disease. Estimates put the entire asbestos bill at some $300bn. The cost is mainly borne by the insurers, and investors in Lloyd's of London were left crippled by asbestos losses in the 1990s. Equitas, the reinsurance scheme set up by Lloyd's to contain its liabilities, recently said that attempts to stem the litigation in the US were failing, and that the number of claims continues to rise.