Asbestos claims near peak but plenty more to come Clyde Global Legacy Claims Conference 2017

15 May 2017

UK asbestos claims will continue long into the future despite reaching a plateau on the bell curve. In the US asbestos plaintiff lawyers are moving on to talc and lung cancer claims while in the developing world asbestos use is still rife. Attendees at Clyde & Co's Legacy Claims Conference 2017 heard some familiar laments, chiefly that asbestos is still 'the new asbestos' but there was also some good news on advances in medical treatment.

Looking back over 20 years of UK asbestos claims experience, with the benefit of newly released figures from the asbestos working party, Toby Scott, partner, Clyde & Co, noted the huge growth in claimant numbers and insurance claims over that period, with insurance claims rising threefold since 1996. Asbestosis claims have levelled off with the decline of heavy industry but the number of mesothelioma claimants reached a new peak of 1554 in 2015.

Various models now show a similar bell curve of future mesothelioma deaths and claims. 'We approach the top of the bell curve but there are many claims to come. Without significant medical advances we face a long road,' said Scott. There are now more older claimants and survival times are getting longer.

Turning to the effect of the change in the discount rate on mesothelioma claims, Scott said the effect was muted compared to some other types of claim – for a typical claimant, 74 years old with £12,000 pension and below average life expectancy, there would be a £10,000 increase or 6 per cent, costing £62 million over ten years.

Claims are likely to plateau in 2020, said Scott, followed by a gradual reduction, but increased life expectancy in the general population, plus younger second and third wave claimants, perhaps from environmental exposure, will keep the numbers up. New medical treatments would bring additional costs, and raise questions as to who gets which treatment. If there is eventually a cure there will still be costs and claims ongoing.  

Dr John Moore-Gillon discussed medical advances in mesothelioma and lung cancer, the treatments available today and new treatments coming into view: 'The pace of developments in cancer treatment generally is dramatic.' Some of these general lessons were potentially applicable to mesothelioma but he stressed more research was needed, praising those insurers that had contributed to research funding so far and urging others to join them.

The subsequent panel discussion covered the possibilities of further funding from the insurance industry for clinical trails and the difficulties of securing market wide co-operation. Bob Howe, CEO, AXA LM, said there was little agreement in the market on research funding – 'some say it should be market-wide but with reorganisation of legacy books it seems less likely.'

IRLA chairman Paul Corver agreed there was an issue of insurance collaboration as legacy books migrate from live to legacy, but also noted the lack of any lawyers funding research. If insurers' costs could be reduced there would be more incentive for insurers to get involved.

Asked about the next wave of claims, the panel flagged up nanotechnology, where manufacturers did not appear to appreciate the risks, plus more asbestos claims from environmental exposure and from occupational exposure due to continued use in certain countries.

Commenting on recent US experience, Peter Dinunzio, senior counsel, New York, Clyde & Co, said many asbestos plaintiff lawyers were now turning to talc claims, with over 2500 pending in Missouri alone. Similar cases were also coming up in New Jersey, California and Washington DC. He also noted the plaintiff bar was focusing more on lung cancer, previously overlooked as it is harder to prove – but also more expensive to defend and with many more potential cases.

In asbestos claims, Dinunzio said plaintiffs were going for less obvious targets such as manufacturers of equipment with small asbestos components, now major producers had gone bankrupt. Mesothelioma still accounts for 90 per cent of claims payments and drives the litigation. Projections had suggested incidence would peak in 2005 but a recent study shows the number of deaths to be relatively flat, partly due to people living longer so surviving to contract mesothelioma later in life.

He also outlined how innovative funding was driving litigation in the US. Plaintiff lawyers needing capital for entry into mass tort dockets were being funded by wealthy investors, often established plaintiff lawyers themselves, lending capital in return for a return on the proceeds, sometimes also acting as a mentor.

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