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05/03/2002
H&W asbestos victims claim £190m from trade department
The Department of Enterprise, Trade and Investment has confirmed that it will pay millions of pounds in compensation to former employees of Harland and Wolff suffering from the effects of asbestos-related diseases.
Sir Reg Empey revealed in a speech to the assembly that analysts believe there may be as many as 3000 compensation claims for ill health eventually totalling over £190 million. However, while the majority of claims will be made over the next few years payments are expected to be made up to the year 2050.
The claims stem from the use of asbestos in shipbuilding in the 1970s and Sir Reg Empey stressed that the emphasis should be on the "extremely distressing and traumatic" situation for the victims and families. The former employees are suffering from a variety of serious diseases such as asbestosis, mesothelioma, diffuse pleural thickening, pleural plaques and lung cancer.
The department's liabilities run up to Harland and Wolff's privatisation in 1989, when the company was taken over in a management buy-out headed by Fred Olsen. After privatisation, the government retained the shell company Harland and Wolff Plc and it is now a separate legal entity to the shipbuilding business.
It was the insolvency of Harland and Wolff Plc employers' liability insurer Chester Street Insurance Holdings Ltd in January 2001 that triggered claims to government agencies and precipitated Sir Reg Empey's statement.
The trade department has agreed to underwrite the financial obligations of the company for it to remain solvent under company law. However, Harland and Wolff Plc is "rapidly running out of money" in the face of mounting pressures.
Sir Reg stated that the claims "will not effect the spending power of the executive" and he has set aside £500,000 this year and £10 million next year to cover the cost of claims. After 2003, the costs are set to be picked up by the Treasury department.
London-based acturary company William Mercer Ltd believes that, in the long term, the executive could recover £49 million of the £190 million through the Financial Services Compensation Scheme.
The collapse of Chester Street Insurance Holdings will significantly effect business in other parts of the UK as the insurer also performed the same function for the British Shipbuilders Corporation and British Steel – rebranded Corus after privatisation.
(GMcG)
Sir Reg Empey revealed in a speech to the assembly that analysts believe there may be as many as 3000 compensation claims for ill health eventually totalling over £190 million. However, while the majority of claims will be made over the next few years payments are expected to be made up to the year 2050.
The claims stem from the use of asbestos in shipbuilding in the 1970s and Sir Reg Empey stressed that the emphasis should be on the "extremely distressing and traumatic" situation for the victims and families. The former employees are suffering from a variety of serious diseases such as asbestosis, mesothelioma, diffuse pleural thickening, pleural plaques and lung cancer.
The department's liabilities run up to Harland and Wolff's privatisation in 1989, when the company was taken over in a management buy-out headed by Fred Olsen. After privatisation, the government retained the shell company Harland and Wolff Plc and it is now a separate legal entity to the shipbuilding business.
It was the insolvency of Harland and Wolff Plc employers' liability insurer Chester Street Insurance Holdings Ltd in January 2001 that triggered claims to government agencies and precipitated Sir Reg Empey's statement.
The trade department has agreed to underwrite the financial obligations of the company for it to remain solvent under company law. However, Harland and Wolff Plc is "rapidly running out of money" in the face of mounting pressures.
Sir Reg stated that the claims "will not effect the spending power of the executive" and he has set aside £500,000 this year and £10 million next year to cover the cost of claims. After 2003, the costs are set to be picked up by the Treasury department.
London-based acturary company William Mercer Ltd believes that, in the long term, the executive could recover £49 million of the £190 million through the Financial Services Compensation Scheme.
The collapse of Chester Street Insurance Holdings will significantly effect business in other parts of the UK as the insurer also performed the same function for the British Shipbuilders Corporation and British Steel – rebranded Corus after privatisation.
(GMcG)
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