US court rules on Lloyd's claims

Click to follow
A FEDERAL court ruling in the United States may result in savings of hundreds of millions of pounds for the beleaguered Lloyd's insurance market.

The ruling, dealing with a dollars 1.3b ( pounds 830m) settlement of around 100,000 claims from people suffering from asbestos-related illnesses, is the first to limit compensation in an attempt to end expensive and time- consuming litigation.

Under the ruling handed down by Federal Court Judge Lowell A Reed in Philadelphia, sufferers of mesothelioma, a disease of the lung-lining, will be awarded sums ranging from dollars 20,000 ( pounds 12,500) to dollars 200,000 ( pounds 125,000), with an average payout of between dollars 37,000 and dollars 60,000. Sufferers of lung cancer will receive average payments of between dollars 19,000 and dollars 30,000 to a maximum of dollars 86,000, while victims of other cancers will receive awards of up to dollars 30,000.

Extraordinary claims from around 3 per cent of severe sufferers will range up to dollars 300,000.

The ruling was handed down after a deal was struck by lawyers representing victims and the Center for Claims Resolution (CCR), an asbestos industry conciliation body representing 20 firms, including T&N, formerly Turner and Newell, Britain's largest producer of the material.

Although Lloyd's exposure from T&N claims was described by the market last night as 'minimal', the ruling could be significant because it sets a precedent for the capping of claims. Tom Benyon, director of the Society of Names, described it as good news and said it meant Lloyd's could finally 'get lucky' in other cases.

In his judgment, handed down on Tuesday, Judge Reed said: 'This court has concluded that the settlement . . . is fair and goes a long way toward meeting the goals sought to be achieved. The inadequate tort system has demonstrated that the lawyers are well paid for their services but the victims are not receiving speedy and reasonable inexpensive resolution of the claims . . . the plan which this court approves today will correct that unfair result . . . '

Some lawyers are already planning to appeal against the capping of awards and Lloyd's itself was viewing the deal cautiously. A spokesman said exposure to T&N losses was not thought to be significant, but he added: 'It is a helpful and welcome development in terms of creating a benchmark for other claims for victims.'